Users Wary of HP Plan to Boost Software Business

HP hardware users say they want BI products from software vendors

Hewlett-Packard Co. last week added a new business unit in its HP Software division that will oversee the company’s business intelligence and information management offerings.

The BI arm of the new Business Information Optimization unit will sell internally developed data warehousing technology, said Ben Barnes, the newly appointed vice president and general manager of the BI group.

HP has yet to hire an executive to lead the unit’s information management operation, officials said.

Some HP users said they are dubious about buying key software products and services from a company that specializes in developing and supporting hardware products.

‘Not Their Forte’

Ashok Bakhshi, IT director at Schindler Elevator Corp. in Morristown, N.J., said that his company “would not normally go to HP for that type of support. It is not their forte.”

Over the next several years, Schindler plans to deploy an enterprise data warehouse from SAP AG, Bakhshi said. Schindler uses ERP software from SAP and hardware from HP, he said.

He added that any proposal from HP to use its data warehouse software “would have to be extremely compelling from a performance and business-value standpoint before we would make the switch out of SAP.”

Bill Kehoe, CIO of the Washington Department of Licensing, said that the state agency has a BI project under way that is based on Microsoft Corp.’s SQL Server database software. Although the department is a big user of HP server and desktop computers, it wouldn’t seriously evaluate the vendor’s software before taking the time to see how HP’s services compare with those of other vendors “who have more [BI or information management] experience,” he said.

HP began shipping one of the unit’s key products, the Neoview data warehousing offering, in October. Officials last week declined to name any companies other than HP itself that are using Neoview.

The technology includes an HP fault-tolerant server running the vendor’s storage and database software. HP said it is using Neoview internally as part of an ongoing effort to consolidate more than 700 data marts into an enterprise data warehouse.

Not only is Neoview a “large, very scalable, very high-performance data warehouse,” but its price tag is also comparable to the offerings of competing data warehouse appliance vendors, Barnes said.

Data warehouse appliances, which are available from several vendors, include combinations of high-performance hardware with database, storage and other software. The systems are generally preconfigured for specific tasks such as strategic analysis.

HPs BI Push

•  HP this month acquired Knightsbridge Solutions Holdings Corp., a BI and data warehouse services company.

•  HP Chairman and CEO Mark Hurd hailed from NCR Corp., which included data warehousing unit Teradata.•  HP CIO Randall Mott was CIO at Wal-Mart Stores Inc., which uses a massive data warehouse.•  HP hired Ben Barnes, former head of IBM’s BI solutions division and former general manager at Teradata, to lead its BI effort.

Barnes said that HP expects that better tapping the BI and information management market can boost its corporate revenue by expanding its business within existing accounts.

HP officials declined to provide details about the company’s BI and information management product plans.

Henry Morris, an analyst at market research firm IDC, said that HP has long been involved in the BI business, because it provides servers that IT operations use to build and run data warehouses.

Morris said he expects HP to rely on partners such as Cognos Inc., Business Objects SA, SAS Institute Inc. and Hyperion Solutions Corp. for the BI tools used for reporting and analysis, unless it moves to purchase such a vendor.

“In terms of the overall solution for BI, there is much more to be gained in terms of overall revenue from services,” said Morris. “Generally speaking, for every BI project, services are the most expensive [part], because expertise is in short supply.”

Copyright © 2007 IDG Communications, Inc.

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