GCN INTERVIEW

Ann Livermore | HP looks to take its place in the cloud

Executive vice president also discusses NMCI, Oracle and HP-UX

Last year, Hewlett-Packard acquired systems integrator EDS for $13.9 billion. As part of the package, it also acquired the management duties of the world's largest outsourced intranet, the Navy Marine Corp Intranet.

The job of standing up and managing the network, awarded in 2000, has proved to be challenging for both parties, and the Navy Department chose not to renew the contract when it expires in 2010, opting for more in-house control. Ann Livermore is executive vice president of HP’s Technology Solutions Group, which oversees EDS and HP's storage, servers, software and services. We spoke with her about lessons about NMCI and Oracle's recent purchase of HP competitor Sun Microsystems.

GCN: What should government agencies take away from the EDS NMCI contract?

Ann Livermore: Any time you have a very large outsourcing relationship and any time you have a customer where you have a very, very broad set of things you are doing for [that customer], there are a handful of things that are really important [to keep in mind]. They apply to NMCI, as well as other relationships.

One is how important it is to anticipate and accommodate change. You can assume when you are in a long-term relationship, what you learn four or five years into it is quite different from what you knew at the start.

The second lesson is the need to balance security and the operations. You have to ensure that you can have the flexibility in your operations and yet ensure you have the very tight security that you need.

I'd say a third thing to keep in mind is that in a long relationship like this, you can never let up. You always have to be pushing for performance improvement and a relentless pursuit of perfection. You have to be pushing on those enhancements and improvements. One of the things we do with NMCI is always evaluate new technologies.

GCN: When Oracle announced it was purchasing Sun Microsystems earlier this year, IBM responded with discounts for existing Sun customers to switch over to IBM gear. How will HP react to the acquisition? Will federal customers see any similar deals?

Livermore: Oracle has certainly been one of HP's largest partners, and we will continue to partner with the company. It has a large number of very important software products, databases, middleware and application servers. It all can run on top of HP servers. At the same time, there will be aspects of their portfolio we'll compete with, just like today we compete with Sun.

Over time, we've done a lot of migrations off of Solaris to Linux-based environments with HP. In particular, HP has had the market-leading position from the Linux perspective. We've led the Linux market for 11 consecutive years, ever since people have been keeping track of the Linux marketplace. We also support Sun products. In EDS, we are supporting a lot of clients in their Sun environments. So we'll we continue to partner tightly with Oracle, but there will still be spaces where we compete with them. So it's not any different than it has been with us.

GCN: We haven’t heard much from HP about cloud computing, and this seems right up the company's alley. Could you talk a bit about HP’s cloud strategy?

Livermore: As we look at our strategy around cloud computing, we believe that this will be a very important trend. It is the next chapter of the Internet. It is about being able to procure services over the Internet, in a way that is much more cost-effective.

You will see us work with the cloud providers themselves. All of our hardware products, our servers and our storage, are already powering cloud providers. So we certainly see all of the service providers as customers we want to sell things to. We'll also host some of the cloud providers’ services inside EDS, particularly some of the smaller cloud services. We think there will be thousands and thousands of these companies. [A small business] may choose to manage [its services] out of a HP data center.

And then you will also see us offer some services. We already have some consumer services, like HP SnapFish, which is a service for digital photographs. And we also have services where we can provide computing on-demand.

One big win with us was with the Defense Information Systems Agency. We are providing the agency secure computing on-demand as a Web-based service. Instead of buying a bunch of servers upfront, what it does is order computer services. The department can turn capacity on and off, like a light switch. And the provision can take place immediately, rather than [requiring a request] weeks in advance.

GCN: The federal government has experienced some woes with counterfeit equipment. The FBI just investigated how the military was sold fake Cisco routers. Could you talk about how HP combats this problem?

Livermore: It is a problem. For us, our biggest issue around counterfeiting has to do with supplies, such as the supplies for printers. We've been a pioneer around anti-counterfeiting practices. What we've been able to do over the past three years is that we have removed from the marketplace just about $800 million worth of counterfeit supplies. In that period, we've doubled the investigative actions we've taken, from about 500 actions in 2005 to more than 1,000 last year. So this is something we invest in to protect the intellectual property of HP and to protect the value of the products that our customers are purchasing.

GCN: What is HP-UX’s future in light of the growing popularity of Linux on the server side?

Livermore: HP-UX is a very important operating environment for us. It is a key component of our product portfolio, powering some of the most mission-critical systems running around the world. HP-UX is typically used for higher-end systems and very mission-critical environments. It is the heart of many communications systems, air traffic control systems and many of the systems in the federal government. It is a very critical environment for us.

You will see us continue to aggressively sell and support it. One out of every three servers in the world is an HP server. We ship a server every three seconds. The Unix-based servers are an important part of that portfolio. Our Linux environment has 39.7 percent market share. Of all the Linux servers that are sold, almost 40 percent are from HP. We are the biggest provider of Linux servers, and at the same time, we are the biggest provider of Microsoft Windows servers.

GCN: What should federal users expect from the HP acquisition of EDS?

Livermore: HP is very focused on serving our government customers. We're thrilled to have added EDS and HP together because now we think we have both the best technology and products in the world and also from a services perspective, tremendous depth and expertise. We're hoping our government customers will look at this as the best of both worlds, with great services as well as great technologies.

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