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HP-OuterBay merger shows market nous

Packing the storage portfolio

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Comment From where I've been sitting, HP has never had the best track record in enterprise software. The next 'e' never was e-services, and HP has acquired many a product only to let it wither on the vine - Bluestone was a prime example. Meanwhile, the company has struggled to bring together its OpenView service management portfolio with Compaq's Insight Manager systems management tools, to present a coherent portfolio. Is it any wonder then that we've seen considerable erosion of HP's credibility as it tries to sell software into the enterprise.

All is not doom and gloom, however. Last year, HP started showing its roadmap to bring together its storage management portfolio, a roadmap which demonstrated both an understanding of enterprise customers' storage needs, and the wherewithal to do something about them. The keyword is "integration" - to provide tools that can do more than manage storage components, HP understands the need to see storage management from end to end, across the range of potential platforms, from the creation and referencing of information, through to its archiving and ultimate deletion.

While parts of HP may have "got" this in the past, it appears to now get it as a company, or at least across the storage division. The exact term applied to this view does not matter much to me; the term currently in vogue is Information Lifecycle Management, or ILM. HP has chosen to announce this week's acquisition of OuterBay under the ILM banner, albeit that OuterBay only meets a subset of the requirements of end to end storage management - that is, it only deals with structured information as used by databases. It also focuses mainly on archiving in a tiered storage environment, rather than any vision of truly dynamic data movement. The important thing from this perspective is that HP understands what it wants its storage management offering to look like, and it has plugged a gap.

To really add value, HP's task is now to integrate OuterBay's capabilities into its existing storage toolset. In this way the acquisition can succeed where others have failed - this time, it is not about capturing a tactical market (though that may have aided the decision). The press release states that HP's existing customers are asking for the database archiving capability, which I believe is a good indicator they are on the right track.

Open questions remain - notably the impact on EMC hardware customers that currently use OuterBay. HP hopes this situation can remain, and indeed, EMC has had to take an increasingly philosophical stance to partnering, following its own acquisitions of companies like Legato, VMware and Smarts. Ultimately, I expect both EMC and HP to plan to migrate their own customers to their own hardware and software portfolios, but it is in nobody's interest (least of all the customer) to rock the boat unnecessarily.

Second, HP needs to face the fact that ILM solutions should be less expensive than the traditional "pile-em-high" approach to storage. HP sales execs will have the choice of selling another bunch of disks, or offering a more cost-effective alternative based on software. When an expenses-paid trip to Bermuda (because they hit their sales targets) may ride on the decision, the stakes are pretty high. There are various statistics about the amount of spare storage capacity in enterprise environments. Is HP really willing to take the hardware hit, should it become successful in selling the software?

Finally, HP still needs to sort out its marketing at a strategic level. As an engineering company HP has never been very good at marketing, and somehow the integrated HP/Compaq managed to adopt the HP approach. HP may want us to think so, but in reality there's currently no such thing as an "adaptive enterprise", as anyone who works in a large organisation (think: every HP employee) should know. It would be wise for HP to bring its messaging a bit more down to earth. I believe a good place to start is with storage management and ILM, which is all about aligning resources with business needs. We might not be there yet, but get this right and HP may indeed bring the adaptive enterprise one step closer.

Copyright © 2006 Macehiter Ward-Dutton

This article was originally published at IT-Analysis.com

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