Here's Gartner's take on HWP's storage initiatives. This was part of a June 2001 in-depth analysis of HWP.
Storage
Although HP has a wide range of HP-engineered storage products in the tape, optical and JBjust-a-bunch-of-disks (JBOD) area, its disk-array business (the fastest-growing part of the storage device market) is primarily through OEM technology. The midrange F60 disk array is from LSI Logic and its XP arrays and related software are from Hitachi. The relationship with Hitachi began in May 1999 when HP terminated its reselling relationship with EMC. The change hit just as HP was going through massive organizational changes and the multiple storage groups experienced management turnover and long periods of acting management coverage. Denzel joined HP in August 2000 and was charged with bringing the multiple storage groups under a single organization, the Network Storage Solution Organization. Her focus is also to bring a more solutions vs. box focus to the offering as the company looks to protect the HP base from other vendors selling networked storage. Eventually HP would like to increase its storage business outside of the HP base.
HP wants a piece of the fast-growing storage market but is late to the game. The company has made progress under Denzel and its FSAM launch in February signaled the company's commitment to staying in the game and adding value. All storage software is now under Denzel's control, though there is a tight working relationship with the OpenView group. And the recently announced Virtual Array 7100 offers the promise that HP will not need to rely on OEMs to provide disk-array technology forever. With the engineering efforts now focused, HP needs to construct a more aggressive go-to-market strategy. Compaq, Hitachi/HDS, and IBM are also coming out of a period of re-engineering and strategy development and 2001 will see more than EMC in HP accounts. With so much reinventing at HP, the progress for storage will be steady but probably somewhat bounded by its ability to capture corporate cycles for storage issues. HP has to strengthen its direct and indirect sales model before it can spend time focusing on storage as a separate business opportunity. HP will win when it can leverage its server and services sales forces to include storage in the account plan. The good news is that when it does, the offering from a hardware, software and solutions perspective will be competitive and better understood by HP sales and services folks than it was last year, resulting in a higher win rate..........
Gartner Dataquest Perspective
HP is trying to project an image of reinvention and revitalization. Certainly many of the long-tenured executives speaking at the analyst event vouched that this is the most exciting time for their career at HP. No wonder — this year is a critical time for HP and Fiorina to restore shareholder confidence. To get there, HP has a number of solid initiatives to help cohesion among its vast organization. It is up to management to execute on the beautifully spelled out strategy which, up to now, has been somewhat short on real impact and results. Although the current strategy has been discussed for a while, we are only now seeing evidence of cohesive tactics to implement it. Direction needs to come from the top, not from bottom-up, thus execution should improve with new strategy and technology councils that provide common direction across business groups.
The organization faces a legacy of bureaucracy and turf wars. It has taken too long for HP to mobilize on a common direction and eliminate redundancies. Going forward, management has to be empowered and willing to break remaining barriers faster. New high-level management from outside and layoffs of 3,000 middle managers should promote agility. To press the gas pedal further, HP needs to create internal mechanisms, such as employee incentives, and common supply chain and pricing processes. These will help foster integrated solutions, instead of point-solutions, to meet real client needs. Products such as E-Utilica (bundled solution of servers, storage, networking and software for application service providers) may be paving the way for better cross-platform collaboration.
HP's server business is a good example of an area needing cohesive vision. Here, HP clearly needs to improve its focus. There still appear to be many fragmented initiatives that conflict. HP needs to articulate what products make the best solutions under which circumstances. This will help to clarify what sales people and partners should sell and what customers should buy and when. To succeed in the server market, an aggressive and focused marketing plan is a must. Translating customer experience and partnerships into sales takes solid marketing execution. The challenge of doing this will be twofold. First, these experiences must be translated directly into customer benefits to generate sales. Cost savings and competitive advantages for end clients are two types of customer benefits that HP should articulate. Second, the effective marketing of these benefits will be part of the necessary execution of the strategy. In the past, HP has not proven itself to be highly effective at aggressive marketing. For the sake of its server market share, now is the time to change that perception.
HP also needs to articulate a more cohesive software vision, though it has made some good first steps. Its portfolio still consists of many point products that form a confusing whole. Various pieces of software seem to reside in multiple organizational units. And although the analyst meeting saw strong focus on OpenView and Netaction, HP-UX and the company's clustering technology were barely mentioned. Perhaps what is needed is a matrix software organization or a special software subgroup within the technology council.....
Copyright 2001 Gartner Group Inc.
More recently, this is what Carly Fiorina had to say about their storage business:
.....The company's data storage business was holding up better than its other businesses, Fiorina said. "Storage is a source of relative strength," she said in response to a question by a Wall Street analyst.
"I would emphasize the word relative," she added, noting that corporate storage spending had come down from previously lofty levels.........
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