For readers of the business pages, it’s been hard in recent days to avoid news of former HP CEO Mark Hurd. For obvious reasons, I didn’t expect to get a new insight on that particular topic but even with that elephant residing on the virtual table, I caught up by phone with the company’s UK MD Nick Wilson to talk about other newsworthy items.
So let’s start with a different elephant on the table for anybody discussing business today: the macro economy and how it’s affecting IT procurement.
Wilson says it has been “a year of two halves. To May we cert had some healthy growth compared to the market. There was pent-up demand and a lot of people were looking for outsourcing… then the election hit.”
The age of ConDem austerity has led to a general slowness in the UK IT sector and Wilson sees a quiet-ish second half, although there are glimmers of activity with the financial services sector “having a look” at its IT options, for example.
The conundrum here, I argue, is that if the state is seeking a sea change in the cost of operations, the most obvious way to get there is through automation. So in theory at least, rigorous cost control could create a mini boom in IT spending. Wilson agrees but remains cautious. He was among those key suppliers summoned by Cabinet Secretary Francis Maude to crack the code on what would work best in terms of procurement practices but says that “the government one is really tricky. I can see them making the right efforts but we all have to wait and see.”
He is stirred by a state of affairs that means some government departments still cannot send consistent emails to each other because of differences in formats, security settings and so on, and calls for a more centralised strategy to introduce consistency.
One plank the coalition inherited from the previous administration is, of course, the G-cloud project to provide a set of shared-access datacentres for government and public-sector agencies, and which appears to be going ahead. Wilson is optimistic that this will also be good for HP because moving the government’s estate of over 100 different datacentres down to a small fraction of that number will be a job for the big boys of IT services. He says he is sympathetic to calls to be inclusive in supplier rosters “but, with the best respect to SMEs, they can’t do that.”
Just over half of HP UK revenue is now derived from services, following the acquisition of EDS. That deal provided an opportunity, he agrees, to go head to head with IBM as a full-service IT provider. HP still lacks the heft of Big Blue in middleware, but other deals – the purchases of 3Com and Palm – have extended its roles in networking and mobility. Sometimes, breadth of offering in IT can be counter-productive with customers left confused and sales teams forced into competition with each other, but Wilson says post-merger integration has proceeded apace and that today’s local HP is “superbly set up, a very slick engine” with “end-to-end account managers compensated on everything sold” and offering a one-stop shop for CIOs.
Opportunities remain, including going into battle with Cisco to win big networking deals while protecting its server business against the same partner/rival.
Returning to the first elephant waiting patiently at the table, Wilson says he is sorry that Hurd, “a good guy” is gone “but life goes on”. The mission remains to be “mind-blowingly consistent” and, of course, you feel like adding, after years of shadowing IBM, to be more broadly the number-one IT all-rounder company in the world.