HP's Hurd: Industry Consolidation Will Continue
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Kevin McLaughlin
HP Chairman and CEO Mark Hurd predicts more industry consolidation and a continued migration by IT organizations toward next generation data center architecture.
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In a Monday keynote speech at Oracle OpenWorld in San Francisco, Hurd explored the contours of his company's strategy for downsizing IT sprawl and shared his views on a wide range of industry trends.

In a speech that ran about 10 minutes shorter than scheduled, Hurd fielded a series of random questions from conference attendees taped earlier in the day, a move he &#91;only half-jokingly&#93; described as 'a high risk maneuver.'

Hurd tiptoed around a conference attendee's query about which tech companies he anticipates being major players after the year 2010, saying only that he expects consolidation to continue in the IT industry.

"I think you'll see continued industry consolidation and more vertical integration, not less," Hurd said. "Only a few companies are well managed and have great people. In the end, math wins."

The ongoing push from IT for more standardization, fewer suppliers, and boosting integration in corporate environments are other factors influencing this trend, Hurd said. "I think &#91;consolidation&#93; will move at a pretty reasonable pace, but if the right combination of companies were to &#91;get involved&#93;, that could accelerate it," Hurd said.

With 140,000 common customers, and a considerable amount of joint engineering and R&D, HP and Oracle have a decidedly symbiotic relationship. Asked about HP and Oracle's efforts to develop business intelligence technologies, Hurd said the challenge of accessing data from legacy applications is a formidable one that will require continued investment from both vendors.

"I think the problem is going to get harder before it gets easier," said Hurd. "It's not instinctive as to why companies take so long to get specific answers to specific questions"

HP has been focusing its R&D efforts on developing the next generation data center, and is revamping its entire data center infrastructure from the ground up, Hurd said. HP has already reduced its number of data centers from 87 to 6, and internally has gone from using 6000 applications to 1500, he added.

"For us, that means virtualization, not only in servers, but also in storage. We're also eliminating redundant data at every turn," said Hurd.

HP's acquisition last year of management software vendor Mercury Interactive is part of a three-year internal IT alignment at HP, Hurd noted. "As you get to next generation data center, it's not just the data center but also the applications and how align that to running a business," he said.

Another conference attendee asked about HP's plans to increase its involvement in the software market, where it currently ranks as the industry's sixth largest vendor, according to Hurd.

Noting that HP is very focused on network, storage, and server management functions, Hurd said these fit into a new category of software that's similar to existing ones like ERP and database. "HP will not only focus its software efforts on the management stacks, but also on the integration between them," he said.

Hurd pointed to HP's pending $1.6 billion acquisition of Opsware, a developer of data center automation software, as further evidence of the vendor's commitment to this goal. Ironically, in September, research analysts from financial services firm Cowen and Co. said Oracle was also among the suitors in the running to acquire Opsware.

It wouldn't have been a proper keynote speech without someone mentioning Google, and Hurd answered a question about whether HP considers the search giant to be a friend or a foe.

Describing the search as "a huge infrastructure modernization opportunity for us," Hurd said the explosion of online content is a rising tide that raises all ships in the IT industry.

There were also several tongue-in-cheek questions, including one from a conference attendee who posed the question: "When it comes to buying a new PC, should I buy Dell or HP?"

Another attendee asked Hurd whether he lets Oracle CEO Larry Ellison win when the two industry giants get together for a game of tennis, to which Hurd replied: "I'm flattered that you would consider me benevolent enough to let someone else win."