Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Sponsor: HP.
Dana Gardner: Hello, and welcome to a special BriefingsDirect podcast series, coming to you
from the HP Software Universe 2010 Conference in Washington D.C. We're here the week of June 14, 2010, to explore some major enterprise software and solutions trends and innovations making news across HP’s ecosystem of customers, partners, and developers.I'm Dana Gardner, Principal Analyst at Interarbor Solutions and I'll be your host throughout this series of HP sponsored Software Universe Live discussions.
We're now joined by Anand Eswaran, Vice President of Professional Services for HP Software & Solutions. Welcome back to BriefingsDirect.
Anand Eswaran: Lovely to be back here, Dana.
Gardner: We've heard a lot here at the conference about governance, management solutions, and new products. I'd like to hear a bit more about what you're bringing to the table from the Professional Services and solutions’ point of view.
Eswaran: I'll take the time to talk about what we're doing here, and then we can approach the
larger context of where we're going.This week, we announced the launch of a new portfolio element called Solution Management Services, and I'll refer to it as SMS through this conversation.
Very briefly, what it does is offer the ability for us to support the entire solution for the customer, which is different from the past, where software companies could only support the product. That’s the heart of what it means. But, it’s the first step in a very large industry transformation we are ushering in, and it would be great to have a chat about that.
Gardner: We've certainly heard a lot about hybrid computing and virtualization. We're expecting more mobile devices to come into play in the enterprise. This is creating a rather difficult transition period -- but with an awful lot of potential. Many people are looking at it as a way to increase their productivity and ultimately to cut costs.
So, the question is how to get there. Where do you see professional services fitting in to the hardware, software, and services combination?
Eswaran: Good question, Dana. Let me take a step back on this. If I look at the industry across two dimensions; the first dimension is the software industry in general, not just HP Software. You see organizations constructed in different ways. You have the support organization, which basically supports the product, and you have the consulting organization, which basically deploys the solution.
When a customer is thinking about a solution, they make a buying decision. The next step for them is to deploy the products they buy as a result of that solution, which they committed to from a roadmap standpoint. Once they finish that, they have to operate and maintain the solution they put in place.
The classic problem in the industry is that, when the customer has a problem, after they have deployed the solution, they call the support organization. The support organization, if they determine the problem is actually with the project and the customizations, cannot support it. Then, the customer will be punted back to the consulting organization, whoever they used. In some ways, the industry plays a little bit of ping-pong with the customer, which is a really bad place to be.
Simple and transparent
What we're trying to do is get to the heart of it and say that we cannot introduce our
organizational complexity to the customer. We want to make it simple. We want to make it transparent to them.The second thing is that everybody talks about business outcomes, but if there are multiple organizations responsible for the same business outcome for the customer, then, in my view, nobody is responsible for the business outcome for the customer. That’s the second thing at the heart of the problem we're trying to solve.
Where we're going with this is that we're looking at what we call the concept of services convergence, where we're trying to make sure that we support the full solution for the customer, remove internal organizational complexity, and truly commit to, and take accountability for, the business outcome for the customer.
Specifically what it means is that we've put up an 18-month roadmap to fuse the services and the support organizations into one entity. We basically take care of the customer across the full lifecycle of the solution, build the solution, deploy the solution, and maintain the solution, They they have one entity, one organization, one set of people to go to across the entire lifecycle. That’s what we're doing.
To put it back in the context of what I talked about at the new portfolio launch, SMS is the first step and a bridge to get to eventual services convergence. SMS is a new portfolio with which the consulting organization is offering the ability to support the solution, until we get to one entity as true services in front of the customer. That’s what SMS is. It’s a bridge to get to services convergence.
Our goal is to support the full solution, no matter what percentage of it is not HP Software products.
The cool part is that this is an industry-leading thing. You don’t see services convergence, that’s industry leading. The second is, when we talk about solutions, 5, 10, 15, or 20 percent of the solution may not be HP products. Our goal is to support the full solution, no matter what percentage of it is not HP Software products. So that takes the accountability for truly creating business outcomes for the customer.
Gardner: It strikes me too that we've been talking here at the conference about the evolving nature of IT. It's changing more to services brokering and procurement, using all of the available sourcing options, figuring out what the right mix should be for each particular organization, and then, of course, tracking that over time as to what makes sense.
Is there a relationship between this changing nature of IT that we are forecasting, and this new, simple approach to services that you're discussing?
Eswaran: Absolutely. Just as SMS is the first step toward services convergence, services convergence is the critical step to offering "Everything as a Service" for the customer. If you don’t have the organizations aligned internally, if you don’t have the ability to truly support the full lifecycle for the customer, you can never get to a point of offering Everything as a Service for the customer.
If you look at services as an industry, it hasn't evolved for the last 40 or 50 years. It’s the only industry in technology which has remained fairly static. Outside of a little bit of inflection on labor arbitrage, offshoring, and the entire BPO industry, which emerged in the 1990s, it's not changed.
Moving the needle
Our goal is to move the needle to have the ability to offer Everything as a Service. Anything that is noncompetitive, anything that is not core to the business of an organization, should be a commodity and should be a service. Services convergence allows us to offer Everything as a Service to the customer. That’s where we are heading.
Gardner: As you come with this to the market, are there certain verticals that you're focused on first, or are there certain segments of the market? How do you yourselves manage the wide variety of potential applicability for this?
Eswaran: Great question. As we look at it, we see the biggest value in first treating it as a horizontal. Because this is going to be such an inflection point in how technology is consumed by the customers, we want to get the process, we want to get the outcomes, and we want to get what this means for the customer right the first time.
Once we get there, the obvious next step is to overlay that horizontal process of offering Everything as a Service.
For us, the first phase is a horizontal phase in making all of IT available as a service to the customer. Once we get there, the obvious next step is to overlay that horizontal process of offering Everything as a Service, with vertical and industry taxonomies.
We have a lot of expertise and experience in specific verticals, financial services, healthcare, government, and public sector, like patent and copyrights management. We have a lot of obvious competencies and taxonomies, which we will very quickly overlay into the concept of services convergence and Everything as a Service.
Gardner: We chatted briefly the other day about how the history of management in IT over the past 20 years or so, in many cases, has created islands of management. HP has been in a position of moving beyond those islands, perhaps sooner than the pack. Is that something that now comes as an advantage, now that we're at a more heterogeneous and hybrid form of computing? Is there a historical context that we can now look to to better understand what’s going to come next?
Eswaran: Absolutely. That’s a very insightful question. If you look at the last few years and at the roadmap which HP has built, whether it is software assets, like Mercury, Peregrine, Opsware, and all of it coming together, whether it is the consulting assets, like the acquisition of EDS, which is now called HP Enterprise Services (ES), there was a method to the madness.
A different approach
Let me give you an example to make this really simple. We're talking to a large organization, from a test automation standpoint, across the whole network. If you look at the past, the way services organizations would approach this is labor arbitrage -- 20 people, three years, $X million in cost, and this is what we do for you.
We want to approach it in a very different way. We want to tell the customer, "You have a 5 percent defect level across the entire stack, from databases and networks, all the way up to your application layer. And that’s causing you a spend of $200 million to offer true business outcomes to your customer, the business."
Instead of offering a project to help them mitigate the risk and cost, our offer is different. We are saying, "We'll take a 5 percent defect level and take it to 2.5 percent in 18 months. That will save you north of a $100 million of cost." Our pricing proposal at that point is a percentage of the money we save you. That’s truly getting to the gut of business outcomes for the customer.
It also does one really cool thing. It changes the pattern of approvals that anybody needs to get to go do a project, because we are talking about money and tangible outcomes, which we will bring about for you.
The last five years is the reason we're at the point that we are going to lead the industry in offering Everything as a Service.
That's not going to be possible without the assets we have consolidated from a software, hardware, or ES standpoint. We have thousands of testers as part of the ES acquisition. We have the thought leadership from a product standpoint, which we have consolidated using our software assets. We have the thought leadership from a services standpoint, within the professional services community. All of this comes together and that makes it possible.
So, the last five years is the reason we're at the point that we are going to lead the industry in offering Everything as a Service.
Gardner: I think that heads up the fact that the present course is just not sustainable when you add in these extra variables of outsourcing, about hybrid models, virtualization, mobility, and so forth.
Eswaran: Absolutely. When you talk about inflection points in the history of technology, the Internet probably was the biggest so far. We're probably at something that is going to be as big, in terms of how consumption happens for customers. Everything non-core, everything noncompetitive is a service, is a commodity.
There are many different mechanisms of consumption. Cloud is one of them. It’s going to take a little bit of maturity for customers to evolve to a private cloud, and then eventually consume anything non-core and noncompetitive as part of the public cloud.
We're getting geared, whether it’s infrastructure, data centers, software assets, automation software, or whether it is consulting expertise, to weave all of that together. We've geared up now to be able, as a best practice, to offer multi-source, hybrid delivery, depending on, one, the customer appetite, and two, where we want to lead the industry, not react to the industry.
Gardner: Well, great. Thank you so much. We have been joined by Anand Eswaran, Vice President of Professional Services for HP Software & Solutions.
Eswaran: Thank you, Dana.
Gardner: And thank you to our audience for joining this special BriefingsDirect podcast, coming to you from the HP Software Universe 2010 Conference in Washington D.C. Look for other podcasts from this HP event on the hp.com website, as well as via the BriefingsDirect Network.
I am Dana Gardner, Principal Analyst at Interarbor Solutions, your host for this series of Software Universe Live discussions. Thanks again for listening, and come back next time.
Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Sponsor: HP.
Transcript of a BriefingsDirect podcast with HP's Anand Eswaran on professional services and a new approach to offering customer support, from HP's latest software conference in Washington, DC. Copyright Interarbor Solutions, LLC, 2005-2010. All rights reserved.
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