I was first briefed by Ann in 1995. As sales and marketing Manager in HP's services group, she came into my employer at the time, IDC, and talked to the analysts about her company's $4 billion services business, which in those years was almost entirely about customer support. This was back when HP was dyed-in-the-wool boring and proud of it. Stable, reliable, built on the HP Way. Ann laid out HP's support services strengths -- its rare ability to be able to support multiple vendors' products, its global coverage, its many support centers -- and answered our questions about how HP would compete with IBM and Digital, the other big services firms at the time. Then she closed the briefing and was on her way.
Fast-forward to 2005. Services at HP has become a big deal. Ann now leads HP's Technology Solutions Group and is being discussed as a possible CEO candidate to replace Carly Fiorina. Meanwhile HP has already expanded its services business many-fold by acquiring Compaq in 2002, just four years after Compaq acquired Digital Equipment Corp. (DEC) and DEC's massive services business. Before that, in 2000, Carly makes a bid for the Price-Waterhouse Coopers (PwC) consulting business, and is reportedly willing to part with $17 -- $18 billion for the unit, a price she is widely criticized for. But HP needs to find a way to get into professional services, beyond support. IBM winds up buying PwC consulting in 2002 for $3.9 billion. In 2008, under Mark Hurd, HP acquires outsourcing giant EDS for $13.9 billion. After the EDS and Compaq deals, HP Services looks vastly different than it did back in 1994.
Or maybe not. Really, the story of HP's services business has been about how it has never been able to move beyond its support business in any appreciable way. Granted, HP got so good at delivering support that its Support unit became reasonably profitable, through a combination of automation, efficient processes, and tons of experience. But at the same time, HP failed consistently, year after year, to grow its professional services business, despite bringing in talent and having a huge captive customer base to sell consulting to. The EDS acquisition has mostly resulted in more failed expectations, and with HP's services revenues now making up nearly 25% of the business, the services failures are too big to hide.
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David Scott, SVP & GM of HP StorageWorks - SNW 2011 - theCUBE
I was first briefed by Ann in 1995. As sales and marketing Manager in HP's services group, she came into my employer at the time, IDC, and talked to the analysts about her company's $4 billion services business, which in those years was almost entirely about customer support. This was back when HP was dyed-in-the-wool boring and proud of it. Stable, reliable, built on the HP Way. Ann laid out HP's support services strengths -- its rare ability to be able to support multiple vendors' products, its global coverage, its many support centers -- and answered our questions about how HP would compete with IBM and Digital, the other big services firms at the time. Then she closed the briefing and was on her way.
Fast-forward to 2005. Services at HP has become a big deal. Ann now leads HP's Technology Solutions Group and is being discussed as a possible CEO candidate to replace Carly Fiorina. Meanwhile HP has already expanded its services business many-fold by acquiring Compaq in 2002, just four years after Compaq acquired Digital Equipment Corp. (DEC) and DEC's massive services business. Before that, in 2000, Carly makes a bid for the Price-Waterhouse Coopers (PwC) consulting business, and is reportedly willing to part with $17 -- $18 billion for the unit, a price she is widely criticized for. But HP needs to find a way to get into professional services, beyond support. IBM winds up buying PwC consulting in 2002 for $3.9 billion. In 2008, under Mark Hurd, HP acquires outsourcing giant EDS for $13.9 billion. After the EDS and Compaq deals, HP Services looks vastly different than it did back in 1994.
Or maybe not. Really, the story of HP's services business has been about how it has never been able to move beyond its support business in any appreciable way. Granted, HP got so good at delivering support that its Support unit became reasonably profitable, through a combination of automation, efficient processes, and tons of experience. But at the same time, HP failed consistently, year after year, to grow its professional services business, despite bringing in talent and having a huge captive customer base to sell consulting to. The EDS acquisition has mostly resulted in more failed expectations, and with HP's services revenues now making up nearly 25% of the business, the services failures are too big to hide.
