HP bets on software for growth in '05

PHUKET ISLAND: "The time is ripe for HP, which has an extensive software product suite to go to the market and make a huge business." Stating this, HP Asia Pacific customer solutions group software global business unit VP and GM Steve Au-Yeung added that the stage is set for a big show for HP in software business and driving it would be the channels who will take us to the next level in business.

Yeung was addressing the gathering of channel partners and media at HP Software Sales Olympics 2004 in Phuket Island, Thailand.

HP software business, which recently started maintaining a separate profit and loss account (two quarters back) for strategic reasons, has registered revenue of close to $ one billion in the last fiscal (ending October 2004). The software business unit comprises of two major product suites -HP OpenView and HP OpenCall. "Our product suite is complete and ready to deliver end-to-end management services, along with business intelligence through cross-functional solutions, for our customers, in line with our vision of Adaptive Enterprise, to be the success leaders in changing business environment," said HP software global business unit VP (MSO Marketing), David Gee.

The company has made eight acquisitions in the last 12 months, with two critical deals coming in security, change and configuration management, enabling it to offer an extensive solution with end-to-end services. "HP's software business is ready to take-off and we will grow manifold in the coming years, making more business, more revenue and more profits. Channels will play a big role worldwide in achieving it," Gee said. In Q4 last fiscal, the company registered a record business of $277 million and closed the year with total revenue of $922 million, registering over 25 percent growth year-on-year. However, HP software business did not record any operational profit since the company invested a huge amount in acquisitions, last year.

While HP OpenView contributed 62 percent (it grew by 30 percent year-on-year) to the turnover, the remaining 38 percent came from HP OpenCall (growing 17 percent). "Channels contributed about 50 percent of business, while direct marketing brought in the rest and we want to maintain the same 50:50 ratio at least for the next three years. However, channel partners will play a major role in expanding our business and delivery of services across the world, including taking it to newer geographies," said HP Worldwide Software Sales Organization software business partner & global alliances director, Michael Bueckle. The company's channel revenue for APAC region grew by 30 percent in the last fiscal.

HP is quite upbeat about the current market trends and its solution offering, hoping to cash-in on the opportunities. "2005 will be an execution period for HP in software business deploying more solutions this year," said Gee.

"We offer solutions which not only automates and manages, but provides insight and business intelligence by synchronizing IT and businesses to help customers deliver best results in business. In a nutshell, it provides better service with fewer resources, lower cost and higher value to business," said Au-Yeung.

HP has recently launched HP OpenView Automation Manager in Madrid, which is an automation and insight provider.

Talking about the challenges faced by CIOs in today's business, Gee said, "Currently, resources are focused on IT services than innovation. More than 80 percent of the IT spend goes in maintenance, while only 20 percent is spent on innovation. Business and IT has to be synchronized to provide intelligence and organizations have to integrate people, processes and technology to run IT as a service delivery."

On the mobile front, HP OpenCall business unit worldwide marketing director Steven Dietch said, "In 2005, video mail would be popular and big business. However, the APAC region will lead in innovation of services (like video mail), before it moves into Europe and finally to the US. Worldwide, Korea is a model in mobile service innovation."

HP is aggressively involved in pushing IMS (IP Multi-media Sub-system) complaint solutions and services among its partners, as it is the standard on which operators will build solution regardless of the preference of services.

In channel business growth, India is leading in APAC region registering 300 percent growth last fiscal. Taiwan is in the second position with 200 percent growth. According to the company, it is planning to involve more channel partners in deployment services, more than solution selling. It is also focusing on managed service providers (third-party players) whose base is increasing with more number of companies preferring to outsource their services.

"We see a huge opportunity for our solutions in the market and would request our channel partners to gear themselves up to address it. HP would provide all support to take them to the next-level in business, and it is a win-win situation for both HP and its channel partners," added Bueckle. The company has also identified high growth areas for channel partners in business such as Network Windows in Infrastructure Management, IT Services Management, Change & Configuration Management in Cross-functional Solutions, Application Management and Business Management.

HP recently tied up with Cisco to sell its solutions along with Cisco service package from February 2005 and according to HP APAC software global business unit channel and alliance manager Cindy Wong, this will again open an opportunity for HP's partners to provide solutions for Cisco customers.

The Software Sales Olympics champions for 2004 were also announced at the event. They include Wipro (India), BOCO (China), Kimax (Taiwan), Yeiji Information Technology Co Ltd (Korea), Singapore Computer Systems Ltd (Singapore), HPD (Malaysia), Thai Value Systems Co Ltd (Thailand) and TUCS Computer Systems (Australia).

The other award categories for partners include Regional Best Growth Award, Regional Best Sales Consultant, Regional Best Technical Consultant and Best HP OpenCall Partner Award and Best Innovation Award. Apart from Wipro (Software Sales Olympics champion), the other winner from India is Xius, which won award under Best HP OpenCall Partner title.

The correspondent traveled to the tourist island in Thailand at the invitation of HP.