Feeds

HP narrows focus for mega services deals

Is it 'transformational'?

  • alert
  • submit to reddit

Protecting users from Firesheep and other Sidejacking attacks with SSL

ComputerWire: IT Industry Intelligence

Hewlett Packard Co is seeking to strike more $1bn-plus services contracts but has said it is increasingly prepared to walk away from some deals,

writes Joe Fay

.

The company is prepared to pass up on some of the industry's largest transactions even as the number of such mega services contracts begins to shrink, and the average size of services agreements overall decreases.

Ann Livermore, executive vice president for HP Services, told its analyst conference in San Francisco yesterday that its managed services unit was upping its focus on $1bn-plus contracts but only wanted to engage in such deals if it was able to do "something transformational" for the client. "We've got to do more than just reduce costs," she said.

Speaking to ComputerWire at the conference, Livermore said that in any given year, perhaps 25 such deals presented themselves. "We'll pursue five to ten."

Livermore described the bidding process for major services deals as akin to due diligence during a company merger. Presumably this works both ways. Electronic Data Systems' recent problems following the financial troubles of key clients and high startup costs with its US Navy contract have no doubt made other providers more cautious about what contracts they take on.

Despite HP's focus on a smaller number of the biggest deals, Livermore said the average size of services deals overall had shrunk. She said companies may outsource a particular application, or operations in a particular geography. HP would still aggressively chase such business, she said. Such deals will often act as a gateway to more business with customers.

Hewlett Packard's efforts to expand its services business were also receiving a boost from the amount of talent on the market as rival players trim their ranks, she said. The company was also going after talent in rival services outfits, said Livermore, and was getting an 80% acceptance rate to offers it was making.

Such workers were tempted by the ability to "build up a business" she said. At the same time, the shedding of staff by rivals could result in increased competition, she said, "When there's over-supply [of consultants] it doesn't just go away. It becomes independent consultants."

Even as the company sucks up talent from rivals, Livermore said it was looking to aggressively drive down its costs by "moving everything we can offshore."

Livermore also said the company was making a conscious decision to decrease the amount of third party product it sold. However, this did not mean it would push HP product where third party products were more appropriate. Rather, she said, the company would not resell third party products itself, as passing such sales through its books obscured the performance of its own services operation.

While HP's Enterprise and Personal Systems business are still clawing their way back to profitability, its services business, along its printing and imaging business, is generating profits. In the fourth quarter HP Services made operating profit of $381m on sales of $3.1bn.

© ComputerWire

Website security in corporate America

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Israeli spies rebel over mass-snooping on innocent Palestinians
'Disciplinary treatment will be sharp and clear' vow spy-chiefs
Apple CEO Tim Cook: TV is TERRIBLE and stuck in the 1970s
The iKing thinks telly is far too fiddly and ugly – basically, iTunes
Huawei ditches new Windows Phone mobe plans, blames poor sales
Giganto mobe firm slams door shut on Microsoft. OH DEAR
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Found inside ISIS terror chap's laptop: CELINE DION tunes
REPORT: Stash of terrorist material found in Syria Dell box
OECD lashes out at tax avoiding globocorps' location-flipping antics
You hear that, Amazon, Google, Microsoft et al?
Show us your Five-Eyes SECRETS says Privacy International
Refusal to disclose GCHQ canteen menus and prices triggers Euro Human Rights Court action
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
Security and trust: The backbone of doing business over the internet
Explores the current state of website security and the contributions Symantec is making to help organizations protect critical data and build trust with customers.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.