Francesco Serafini, a 25-year HP veteran and now managing director for HP EMEA, said that on top of the good set of numbers it announced, the mood was generally positive internally because the revenue mix was well-balanced across all parts of the business.
Notably, HP software had sales of $330m, with OpenView systems management tool sales up 25%. Software growth was up 20% for the quarter, and the quarter was profitable, although we will continue to look for better bottom-line performance, he said. Operating profits for the software business were $3m, compared to a $2m operating loss a year ago.
In terms of the future development of the $1.3bn software business HP now has assembled, Serafini said that one area we like is ILM, because it is very complementary with our portfilio. We want to build a leadership position there, as we have in identity management.
The vendor will be considering whether it should continue to OEM the ILM technology it currently has as its disposal, build its own portfolio, or buy itself it into the sector. A couple of the most recent acquisitions for HP suggest it is the latter M&A approach that will prove to be the most likely for it in the ILM sector, much in the same way as the company has established itself in ID management.
HP’s decision to buy database archiving specialist OuterBay Technologies Inc in February was based on a belief that database volumes will soar over the next few years. OuterBay’s software prunes databases of infrequently accessed data, moving older data to lower storage tiers in order to maximize application performance and reduce tier-one capacity usage.
Likewise, when it closed its acquisition of AppIQ Inc late last year, HP declared its priorities for the development of AppIQ’s storage resource management software as being the management of virtualized storage, support for standards, integration with HP’s OpenView systems management tools, and extending support to cover HP’s Tru64 and OpenView platforms, tape and nearline devices, and iSCSI.
HP’s payback from such investments will come from the hardware sales that will be driven by the software, as much as it will be from the software itself.
Potential targets for HP according to market watchers could include the likes of continuous data protection (CDP) start-up Mendocino Software Inc, which last year signed an OEM deal with Hewlett-Packard and possibly Revivio, another CDP start-up, which market speculation suggests has already caught the attentions of IBM.
Serafini also pointed to the strong potential for business development in the emerging economies of eastern Europe, where he claimed HP stands as the largest IT vendor by far.
He noted that the company already had built IT practices in areas such as Bratislava, had established business process outsourcing centers in Poland and Romania, and a remote service desk and support operation had been set up in Bulgaria. He said PC and laptop demands throughout the territory is exceptionally strong, and the overall appetite for hardware and software across the eastern European regions is showing strong double-digit growth overall.
