What’s happening with HP storage? Part 2

This is a continuation of my previous newsletter, which began a look into HP’s storage strategy for the coming year.

Mark Hurd, HP’s new CEO, wants to grow the storage business. From what I heard last week, while some of this growth is likely to come via acquisition, a major part is expected to come from HP’s traditional hardware lines, and from its new line of blade servers. Increasingly, it will also come from a steadily expanding set of information lifecycle management (ILM) and storage management software.

The result of this is that software continues to grow in importance at HP, and is expected to make increasing contributions to the bottom line over the next few years. It is unlikely any of this will turn out to be application software however; when it comes to software, HP prefers to play at the management level.

HP acquired ILM vendor OuterBay a few months ago, and SMI-S vendor AppIQ several months prior to that. The purpose of these acquisitions, like that of most of the company’s management software, is to provide a common set of processes and tools to enable centralized management across the enterprise. In connection with this, the ILM group at the company looks to be trying to converge many aspects of ILM with storage resource management (SRM), which would enable automating the discovery of most storage assets, and consequently, of many storage tasks.

All of this will be of great value at the enterprise level, but elimination of many of those tasks would also provide much value to smaller companies as well. It will be interesting to see if HP can do for small and midsize businesses, what it looks like it is now doing for enterprise storage shops.

Another point to ponder: OuterBay provides EMC with much of its ILM software. It will be interesting to see how long EMC continues to use the OuterBay software now that one of its chief rivals owns the company. Time will tell.

Finally, it is clear that one of HP’s goals is to have its hardware sales drag much more software revenue into each deal during the coming year, which typically means that HP’s reps will have added incentives to sell software. Thus, HP hardware customers should look for opportunities to strike more aggressive deals when the HP rep starts trying to roll software into the sale. The added incentive that the rep gets from the company for selling software may result in a bit more flexibility when it comes to software pricing. Maybe this will be the year when you will at last get a little more leverage when it is time to negotiate a software contract.