“E-services will be the next generation of internet business.”

—Ron Eckhardt, General Manager,
E-business Solution Division,
Hewlett-Packard.

Ron Eckhardt, General Manager, E-business Solution Division,Ron Eckhardt has played out several roles—from being a teacher in Africa to
a real-time programmer, to an operations person. Currently, he is playing out the role of
General Manager, E-business Solutions Division in Hewlett-Packard. The division is a part
of HP’s Internet Business Unit that was formed to enhance HP’s position in the
e-biz arena and to lead its e-services strategy. On a whistle-stop tour of HP’s
software centers in South East Asia, Eckhardt took time off to talk to DATAQUEST at
HP’s ISO office in Bangalore. Excerpts from the interview:

What made you launch an e-services
strategy?

Software business in internet is critical for HP. We had a lot of customer pull to put
their businesses in that internet business space. So we created the Internet Business Unit
(IBU). E-services is part of the IBU and it provides infrastructure to enable e-business
solutions and e-services, including the software environment that extends from servers to
clients to appliances. These are services that would allow you to do business in the
e-biz, e-com world without too much expense by paying on transaction basis. In our
opinion, e-services is the next generation of internet business. We are spending a $100
million on talking about HP’s offerings on e-services.

What makes you say that it is the next
generation of internet business?

Companies who want to do business on the net want proven software products and solutions
to build their online infrastructure and they want someone to come and do that. For
instance, set up web sites, store fronts, payment strategy. Not all of them want to build
and these all by themselves. They do not have to set up a Yahoo!-like web site. Now, they
can pay service providers.

Are we talking of another shift in time
dimension? Are we going to see things happening faster and faster?

People want to get into it faster and will not wait for 12 months for project development.
It’s an exciting new paradigm where we will see time changing its pace once again.
Earlier, building a new operating system took several years, now we need to keep pace more
quickly. We need to provide tools and services on a pay basis. Here, HP will play as an
integrator as well as a service provider.

Will HP help set up a la Amazon.com?
What will be the company’s role as a service provider? Where will your revenues come
from?

One of the approaches may be that we may choose to share revenue with the start-up. It is
one of the exciting things about helping start a business and sharing it. By sharing the
growth with them, we will be giving confidence to the start-up company as well. Or we may
start by charging a usage fee.

Who will be HP’s main competitors
in this space? And is it poised to address this market?

IBM and big integrators like EDS, Andersen, Cap Gemini and, of course, new companies who
crop up. As mentioned earlier, HP is setting up a focused large organization to go after
the market. We are looking at spending $100 million on advertising HP’s e-services
offerings.

What will be HP’s strength in this
market space?

HP is ideally poised because we have hardware, operating systems and security. These are
important for infrastructure. As far as solutions are concerned, we have combined turnkey
solutions’ business and e-solutions business. So, we are now able to leverage our
software capabilities. We can offer a full portfolio of services. We recently entered into
a joint venture with Marubeni and Hitachi Software, with HP holding majority stake, for
providing e-services type of services in Japan where we need the capabilities. They have
the same problems there too. Our combination with India gives us a very strong position.
We provide solutions from India to the US, Canada and Europe. Now we will add Japan to it.

Where do you expect the biggest growth
to come from?

In the telecom and financial services sector—they are the hottest industries. Not
that the others aren’t, except that these two industries face incredible pressure to
use internet and e-commerce solutions. From just being in the backroom, we have seen IT
become an offensive weapon. It is no longer just a defensive weapon.

Can you estimate the size of the market?
It is difficult to estimate the size of the market. HP has some figures, but I don’t
have them. But, I guess, it would follow the size of the companies. The bigger
companies—they will invariably have to be and will be global—have no choice but
adopt internet and e-commerce solutions. Clearly, the market is huge.

You mentioned financial services as a
big growth sector. What kind of changes will banks undergo?

With security getting better, banking will change. Internet banking is becoming popular.
In fact, one of the banks recently announced that their e-banking customers were more
loyal than those doing traditional banking with them. People thought it would be the
opposite, because people could shift accounts easily on the web. It is catching up fast
and we keep getting requests from banks to help them set up internet and electronic
banking. We are seeing a demand in Asia, Americas and Europe. We have sold our solution to
Credit Union Bank and that will be our showcase for HP’s e-banking solution.

Any estimate of the banking market?
No, but banking is where IT expenditure is growing fast.

Which countries in your opinion are
likely to adopt internet banking faster?

Perhaps, the northern part of Europe, Australia, Japan has a lot of pressure, and, of
course, the US.

What about India?
We will be setting up a demonstration center for e-banking solutions alongwith Tata
Consultancy Services, which is into e-banking solutions. This will be set up shortly. If
nothing else, that in itself is an-endorsement of growth in India. Besides, India has a
base of high-technology qualified people, given the number of people associated with the
IT industry. So, I would think there is a good demand in India as well.

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