The Cube is live from Las Vegas at this year’s HP Discover 2012. Dave Vellante sat down with Dave Donatelli, Executive Vice President and General Manager, Enterprise Group, Hewlett-Packard (full video below). HP created the new group about a month ago when it combined Enterprise Servers, Storage and Networking (ESSN) with Global Accounts Sales. According to Donatelli, HP’s leadership is really focused on making long-term decisions about the company’s organizational structure. The formation of the Enterprise Group was an effort to simplify interaction for customers and internally for decision-making.
Dave Vellante discussed Meg Whitman’s strong enterprise focus in her Tuesday keynote with Donatelli. The EVP agreed with Whitman, saying, “We’re just trying to get our message out.” He continued by explaining that HP’s current actions aren’t an effort to transform the company. They are an effort to focus on its competencies – the infrastructure business, computers and printers and software.
When questioned about HP’s ability to compete and differentiate itself, Donatelli said HP pioneered the term converged infrastructure and continues to lead the market. Donatelli mentioned HP’s ARM-based server initiatives Project Moonshoot and Project Odyssey, Gen8 and being the first major company to support Openflow and software define networking. He said that HP has made similar innovations in storage and servers, which allows them to move faster than competitors in the converged networking space.
Donatelli said HP is not going after market share at any cost. They are focused on offering a better value by technology, not just discounting prices. Vellante questioned the state of the converged infrastructure market pricing and why it seems that customers are not willing to pay a premium for the value it provides. Donatelli responded, he feels HP charges when they offer a unique benefit, but they don’t lock in customers to their platform to drive up cost. Donatelli said HP is very focused on adopting open standards and driving price via innovation, not lock-in. Lock-in is one of the main barriers to businesses adopting converged infrastructure.
Stu Miniman, Senior Wikibon Analyst, questioned why HP isn’t recognized as much in the converged infrastructure discussion. Donatelli said, you have to separate press from buying, and HP as significant revenue share in the market. HP’s offerings like Cloud System are more sophisticated, which sometimes makes it difficult to understand the company’s market position in the converged space.
Donatelli said he sees great growth and opportunity in the networking space. HP has fully integrated 3COM, which it acquired almost three years ago. According to Donatelli, the company’s next major area of focus is software defined networking, which is allowing networks to become virtualized, just like servers. HP has introduced several software defined networking offerings, which are receiving a positive response from customers.
Donatelli believes that the market trend is toward buying from fewer companies to reduce complexity. This will drive continued acquisitions in the market, but startups still play a vital innovation role in the industry. Vellante described the current state of the market is as almost an oligopoly, and HP is one of the giants. Donatelli said that vendors that make it to the top must have a broad and high quality portfolio, a global go to market engine and great products.