Telecom Lead America: Amidst broad restructuring,
HP’s Communications, Media & Entertainment unit (CME) will focus on higher
margin solutions.
HP wrote down $8 billion in goodwill stemming from its
acquisition of Electronic Data Systems, which the company bought for $13.2
billion in 2008. The move indicates HP is de-emphasizing its low margin
technology outsourcing services as it attempts to boost company-wide margins.
The CME business will follow this path, focusing on high-margin consulting
services while pushing new communication service provider software and cloud
solutions.
HP CME will hone its focus on four areas where service
providers are increasing investment: cloud, data analytics, machine-to-machine
(M2M), and operations support systems (OSS). HP faces tough competition from
traditional telecom equipment vendors in each of these areas, though the focus
of Ericsson, NSN, and Alcatel-Lucent has recently centered on Customer
Experience Management, which includes aspects of OSS and analytics.
Customer Experience Management vendors will attempt to
differentiate from competitors by incorporating network and customer-centric
analytics into their Customer Experience Management solutions. HP has so far
implemented its Customer Experience Management solution with Hutchison 3G
Austria and an unnamed operator, though HP has found greater success in the
cloud space. Its HP Cloudsystem Service Provider solution is in use by eight
carriers, including recent wins at Turkcell and Swisscom in March 2012.
HP Networking bets on OpenFlow and partner ecosystem to
take market share from Cisco in the switching space
OpenFlow is a networking virtualization technology
standard that simplifies network management, also known as software defined
networking (SDN). HP currently supports OpenFlow in 16 switches, but by the end
of 2012, the company expects that nearly all of its managed switches will
support OpenFlow. HP was the first of the major networking vendors to support
OpenFlow on multiple products, but others have since followed suit, making it
necessary for HP to find other ways to differentiate, including on price.
HP will leverage its stable of partners to deliver more
comprehensive enterprise solutions, with a particular focus on the SMB market,
where the company is more likely to take share from Cisco. Partners will be
integral in areas where HP lacks a compelling solution, such as IP telephony,
unified communications, and WAN optimization. The most likely partner companies
are Microsoft, Avaya, Riverbed, and Citrix.
Michael Soper, Networking & Mobility Research
Analyst, Technology Business Research
editor@telecomlead.com
