Article & Journal Resources

Dan Farber & Larry Dignan

December 11th, 2007

One of the big takeaways from Hewlett-Packard’s analyst meeting will be that the company’s information technology overhaul serves multiple purposes.

To wit:

* HP’s IT consolidation is designed to save money;
* The teams are that are carrying out the consolidation are being trailed by HP services soldiers to glean insight;
* CEO Mark Hurd said the IT overhaul hasn’t been entirely smooth;
* But if all goes well, HP can take its knowledge and sell customers on it.

“We’ve had issues shutting down data centers,” said Hurd. “At the end take we will take these lessons learned and give them to customers.”

Other technology giants such as IBM, Cisco and others have similar plans.

But there’s one big problem. These technology giants can use themselves as IT guinea pigs and then turn them into services. Cisco can transform its internal technology systems to embrace Web 2.0. You can’t.

Why? These big technology architecture overhauls require CEO participation and folks like Cisco CEO John Chambers are on board. The CEO also can’t blink when your SOA/consolidation/automation project doesn’t go well. That’s what makes HP’s overhaul a bit different. Hurd won’t blink–he’s obsessed with efficiency. What happens when another non-technology CEO blinks? The project stalls. Even worse the IT overhaul disappears and all those old apps keep chugging along. There’s a reason your company has thousands of old applications–somebody choked.

Hurd said all CIOs want to cut costs and simplify. It would be swell if everyone got on the virtualization, consolidation and efficiency bandwagons at the same time.

Then Hurd dropped a large “but.” “I don’t think the CIO in isolation makes the call,” said Hurd.

He added:

“From our experience this is a CEO decision executed by a team. If our team (CEO, CFO etc) doesn’t support the process it will fail. When you start transforming you will run into problems. As soon as CEO and CFO blink the transformation stops.”

Will your CEO or CFO blink when your data center consolidation doesn’t go well? Probably. Perhaps that’s why we’re all sitting on a rat’s nest of legacy applications.