Dealing with ChangeThe typical approach by most technology vendors approaching the market with new technology is to rip and replace. Particularly if the company doesnt have much of a services unit, the idea of first embracing what the client company has and then implementing a gradual and prudent amount of change has been elusive.
Outside of IBM, historically, because of comparatively slim services offerings from others, this approach was unusual. Since both HP and Dell have now brought on expansions in this they are both now more aggressively moving to embrace existing ecosystems.
This is far more palatable to most organizations, which simply cant afford to rip and replace existing systems and often lack the ability to do so even if they could afford the hardware and software. This is because many of these existing systems are both highly integrated into the existing business process and highly custom to the organization. This translates into the immovable object, and an initiative that recognizes this will likely resonate relatively well.
Also underneath this is the idea of a pay-as-you-go concept that has actually been a part of HPs message for a while now. And due to its success, this appears to be reemphasized and strengthened with this new program.
This allows the IT organization to better match the cost of new services, hardware, and software to the cost for the purchasing company itself. Line organizations increasingly own the P&L and fund these efforts. Having the costs more tightly tied to the benefits helps IT significantly to both help sell the underlying technology and to more easily tie the related costs to related financial benefits in post analysis. This increases the ability for IT to show the value of their efforts.
Finally, this is one of the first broad initiatives that embrace mobile devices, which are growing like weeds in most organizations. The details around this aspect, however, are not yet being made public. But HP has recently purchased Palm and the related platform is due to show up on future tablets, smartphones, and smart printers.
IT as a BrokerWhile it is the move toward the Cloud that has made technology vendors look at IT differently, as mentioned above, the ecosystem that surrounds IT has also changed dramatically over the last decade.
With P&L responsibilities being pushed down into line organizations and cloud services increasingly selling directly to those organizations, IT faces competition similar to what happened in the 1980s when the PC was used as a way to get around using IT services.
This trend is shifting more of the available technology spend away from IT. And thats not a good trend for any organization that wants to maintain staffing levels -- nor is it good for the IT vendors who havent yet learned how to sell directly to line organizations.
By creating the concept of IT as a broker and enabling that function with Cloud solutions and services, HP is attempting to strengthen the roll of IT and thus not only protecting those related jobs but their own position (and that of other similar vendors) in large organizations.
HP and IT are aligned in this, but the real challenge will be getting the message to the line organization because, while this plays well for IT, unless this concept is actively and successfully marketed to line managers it wont have the impact that HP or IT would like.
Product AlignmentHP lines, outside of Printing and Imaging, are a broad mass of products that have either been created or acquired over a long period of time. At an analyst meeting last week the most common comment surrounding HP was that these lines are now a confusing mess that most cant seem to wrap their arms around either inside or outside of the company.
HP is an engineering-based company, which means the poor marketing department has to wrap these diverse and conflicting lines with a marketing message. This is like having several people who dont know each other create a list of characters for a story and then trying to write a store around these characters. At best the result would be disjointed.
To make this effort meet its potential it should have an aspect of product rationalization behind it, where HP goes through and rethinks its own lines, naming conventions, and creates more cross company consistency and simplicity. That isnt part of this effort yet but I think it may eventually lead to this, particularly given the changes at the top of the company.
Wrapping Up: Strong on Concept but Devil in DetailsThe message that HP is sending should be well received. But the devil is always in the details and an engineering-driven company often runs into trouble when they have to dive down to specifics.
This is because the offerings and the message are on separate paths and forced to fit each other late in the process. This problem is particularly problematic with an umbrella corporation model like Hps, which is likely why HP is increasingly unique with regard to this model. (IBM, which drove this model initially, is shifting away from it, for instance).
Finally, this is too early in the cycle for it to have had much impact from HPs new executive leadership. But it could serve as a driver for where leadership now takes the company, due to its timing. It did happen after the appointment of the new executive team, which ties them to it, regardless of whether they had anything to do with the program. It likely force fits it into their own strategy. That either means it was blessed after the fact or someone is going to have an interesting meeting this month.
In any case, the message should resonate well with IT because it supports a powerful IT organization. And in a time period in which all organizations are at increasing risk, that has to be a good thing.