HP Is Reinventing The Server Business

New Update

HP globally is in a transition. Having bifurcated into two independent entities aimed at a distinct focus on software and hardware, HP also believes this will have greater market traction. While it is to be seen how far this new strategy of HP will pump up its revenues, but beyond the bottomline mandate, HP's huge arsenal of software and hardware makes it a powerful entity in the mission critical enterprise computing space. One of the vital elements of enterprise computing is server hardware and here HP's leadership by and large is undisputed, Its been topping the x86 charts  and still holding firm in non-x86 Unix ( despite challenges)  space with its HP-UX / Itanium play.


In an exclusive freewheeling discussion with DATAQUEST  HP's key server spokes people: Alain Andreoli,Senior Vice President and General Manager, HP Servers,   Susan Blocher, Vice President of Marketing, HP Servers  and Vikram K, Director, Servers, HP India walks through the multi-pronged competencies HP has on servers and how it is influencing the industry with class leading server technologies and innovations. Excerpts.

Can you give a ringside perspective on HP’s server play?



Alain: We had a very strong year. We continue to increase our market share in the worldwide basis. We now have 30% market share in X86 servers. We just increased our market share by almost a point this quarter, and this has really come from the fact that we have recognized, a few years back, that one size does not fit all any longer when it comes to computing. There are new businesses that are powered by IT that require their own specialized, optimized computing. So, we continue to lead the market with generic computing, with ProLiant product line, racks, blades and towers, which are going very well. And, we have had great success with our Generation 9, which is the one we launched three quarters ago which is doing very well. But, we have done a huge amount of work to build dedicated, specialized server product lines for specific new markets such as mission critical, big data, cloud service providers, HPC, and next generation workloads.

Given this huge product depth how are you taking to market your server assets?

Alain: So the first stone in our strategy was to build this very wide product line that basically takes a brand for each segment of the market. And then we decided to put together each of these product lines with a key market segment. For instance, service providers, which are a big, big development in India, we have Cloudline as the forefront of our market development which we did as a joint venture with FoxConn, Moonshot for next generation workloads and IoT, Apollo for HPC and for Big Data, and SuperDomeX and NonStopX, (X stands for x86), for the new wave of Linux based mission critical and we are also planning whole lot architecture innovations down the line. For next generation, we have Moonshot, for HPC, we have Apollo, for Mission Critical we have Integrity, for the classic enterprise and SMB, we have ProLiant.


Can you elaborate more on your SMB mandate?

Alain: SMB is a very important market. We know that some customers, may have a tendency, or temptation to go to the cloud, to the public cloud, in the future and so we are also looking at some dedicated forms of computing appliances in the future for the market segment. We have a very broad infrastructure offering for each segment of the market to continue current leadership and on top of it we have a great stack of software.  ILO, which is embedded management which works with redfish APIs. Then we have our converged management tool called HP One View, then we have our cloud management tool called HP Helion. On top of it we have our whole ecosystem with Microsoft, VMware, SAP and so on, which really allows a unique differentiation for HP Servers.

Now that HP is divided into two, if we focus on HP Enterprise per say, how are things going to change if you look at the servers? What is going to be the new focus that is being ushered in?


The focus of HP Enterprise is going to be around transformation areas and I will have Susan, the VP of marketing comment on this :

Susan Blocher 22

Susan: HP enterprise will be focused on four transformation areas. The first is going to be on Hybrid Infrastructure and that’s going to be about helping customers move from an on premise cloud infrastructure and seamlessly be able to migrate applications between on premise cloud and off premise or public cloud. The second area will be around security and protecting digital enterprises, and I think that one is particularly important as we look here in India. The third area is around big data and high performance computing, so this is about empowering a data driven organization. In fact, HP Servers is at the heart of some specialized solutions that Alain mentioned. They are around high performance computing, supercomputing, and big data and analytics solutions. So that’s another key area that we see as a great opportunity here in the India market as well. Last but not the least it’s going to be around mobility and empowering or enabling work force productivity, so you will see a lot of work innovating with VMWare, Citrix and other ISVs in the market around mobility.


If you look at the last 3 years, HP has been evangelizing this ‘new style of IT’ and if you look at the new style of IT and the server portfolio - can you talk about the key innovations addressing the new computing models?

Alain: I would like to look at these for each of the market segments that we have been addressing. If you look at the SMB, we have been attacking the very low end of the market with our ML10 and other product line DL20’s and 40’s, we are as competitive as anyone in the lowest end of the market. That’s one area for the SMB.

For mission critical, we have launched only 6 months ago SuperDome X and NonStop X, and the number of installations, we have successfully made is already in the 100’s.


For HPC and big Data, we have launched the Apollo line and in 2015, we won the most ‘Innovative Product’ in Vegas for the Apollo 8000 product, a top of the line product that has water cooling-which has a unique technology called ‘Dry Disconnect’ which allows to reduce with the power efficiency by  unique cooling capability without the risk of leak. And then we have cascaded the whole family of Apollos which now making HP by far the market leader in that domain. In object storage which is server based storage, we have launched the Apollo 4000 family, which now scales up to almost 100 drives per 4U server format, which is the highest density on the market that we sell to larger service providers in the world.

In HPC also we have innovated in announcing a unique alliance with  Intel. So Intel and HP has created 2 centers of expertise, we are building a showcase of the full Intel suite that will be available for our Gen10 in HPC. The whole  innovation of the 2 companies together will be showcased and make us formally the world leader in HPC.

And finally we have innovated with our business model on the cloud being the ones which offer the best of the OEM and the ODMS with our joint venture with Foxconn, which is developing successfully and allows us to have the service and the global reach of HP, together with the cost structure and the supply chain capability of a Foxconn.


If you look at the business critical systems portfolio, couple of years ago HP launched project Odyssey which created some kind of a bridge between x86 and HP-UX (UNIX) – and now if you look at Itanium there have been a lot of negative comments towards this. So what is HP’s strategy towards Itanium?

Alain: Well, what I gather from key people from HP's Mission Critical business and what they are saying to me is that if  you look at the customers who are running UNIX environments today, many of them rely on these applications, they want the resilience, they want the manageability capability and the scale that UNIX brings and they don’t have any great urgency to move those somewhere else.

They have other priorities in their organisations, they have security, global applications, new cloud things that they are doing. So, in many cases they look at UNIX system and they want to be able to add to it, to grow its capacity as needed and make sure that it’s managed in a holistic fashion and allows it to drive the business. So those customers are going to be very happy for a long period of time. That’s a decade long kind of model for those customers. There are other customers who have a business imperative to move those applications quickly into a Linux environment whether that’s for flexibility or a new function or they believe there is cost savings for standardization we have seen customers do that as well. It is a dual pronged strategy, if the business wants the reliability and stability that they have got and has other IT priorities we are going to sustain that for a long period of time versus other customers who want to move more quickly, so it’s really a customer choice.

Coming to India,  what are some of the trends that you are seeing? Are we transitioning to new technologies in the high density servers? What are your thoughts on this?


Vikram: The first big trend is that, this year has been a significant one from HP perspective. There has been significant growth and in terms of market revenue we have grown consistently and over the last 3 quarters we have averaged 39-40% and this quarter it is 41.25% to be precise, in the Q2 of FY’15. If I relate back to what has happened, I think the market is getting a little finer, they are looking at more optimised compute platforms across a variety of workloads. The workload spectrums are getting defined some of them like VTI, like high performance computing, ultra-dense compute and to the point that Alain mentioned earlier about ultra-dense computing with savings and different method of cooling, we see a little more adoption of software defined servers. These are some of things happening. The other areas like e-commerce, service providers, and if you look at the market, if you and me had checked about a year back we would have talked a lot more about OLTP but today it’s a lot about the New Style of IT.

The last few years the industry was rife with conversations on virtualisation, server consolidation and all these things. What kind of an impact does this is having now on IT Organizations which clearly wants to reduces the server sprawl. Do you think this will have an impact on volumes?

Vikram: Well, in parallel there is a sprawl of small and medium businesses as well and as Alain pointed out we have a series of lines that optimise for each size of customer, there is a density optimise line, there is a maximisation line, and then there are the blades that is always spoken about. So, coming back to how things have been panning out, the market size has remained the same , but because of some of these newer styles of IT adoption and even virtualization as you mentioned, consumption is growing, due to the fact that we have a heightened product innovation around each one of these products. For example - something like big data that would mean that apart from having the better set of algorithms that can work and reduce the CPU and IO optimiser better, it also gives better throughputs when using big data, in using analytical sense and a variety of such things. So the product set and the smarter innovations that we have had over a period of time, I must thank the WW product teams for such innovations. It’s helping us catalyse and lead the market. We have been in the driver’s seat due to these innovations.

Alain: To add on that, on the global basis this has been a phenomenal year of growth for the market itself. So to your point there could have been a fear that the customers consolidate their server farms, and the cloud providers consolidate real estate, what we are seeing is a market growing faster than expected by long shot. I think the final forecast for this year at this point in time is 7-8% growth in value for the server market. What you see is a bit of bifurcation there is a big row of low value servers that go into the cloud service providers you know like Google, Amazon, Microsoft are now consuming millions of servers at a low unit price; in parallel very steep increase in value of servers that go into more specialised type of computing, very heavy in terms of options and software and memory configurations for more and more storage on the server and we have seen at HPC deficient increase in unit value of each server even more than that in the number of servers.

What you see is that, Server is becoming more and more a vehicle as everything converged, and more and more a vehicle at the rack level, basically higher Dollar or Rupee value per sever and per rack. It’s an interesting situation, for us it’s like the last two years we see that server is back to be a gross business. In local currency, you know there has been big fluctuations of currencies this year right, in local currency our business in server has grown 13 % this year. So, you wouldn’t have bet on this 2-3 years ago when we were in big crisis post 2008 crisis. But, today we see the server business is on fire.

What is the update you can give on the Moonshot servers? What’s the traction you are seeing? 

Susan: Moonshot is one of the innovative technologies that really helped us to think about new ways to apply compute for the new style of business. So, it’s an element in our Converged system and in itself a hyper converged solution, it’s a green technology because it’s low energy consumption. What we envision with Moonshot is that we are starting to see more and more opportunities as we look towards the IOT to align some of the capabilities of Moonshot to new solutions around IOT. So, that sort of the future direction we are thinking over and above what we are doing with Moonshot around mobility, video transcoding and media processing.

 What will be your 2-3 key priorities that your energies will be focused on in 2015 and beyond?

Alain: Our first priority will be on the composite infrastructure, the conversions in that we believe will continue to be a big movement in the core enterprise. Second one is the gross in SMB market and make sure we learn new form factors that allow SMBs to optimise their IT between on premise and cloud. The third one is to really scale out scale up server. The specialised servers for HPC and mission critical like x86 and big data that are becoming the big gross in the server market. In fact, we are looking at way beyond the next 2 years and we are looking at the market in waves.

Susan: If you think about what our focus areas are, you can think about 3 horizons:

One is Infrastructure modernisation both from enterprise and how we help SMB establish and grow their business. The focus in this horizon is around work load optimisation and truly about building solutions from the applications down to the hardware. The second one is Cloud- Alain has talked about our focus on Cloud Service providers and helping customers move seamlessly between on premise cloud and off premise cloud. The third one is IOT- This is the future of compute opportunity. This is an opportunity to bring compute out of the Data Center and put compute where the data originates. The tier gets close and close to the sensors that are out in everything.

So, that’s how we see ourselves moving forward, continue establishing our dominance in the Data Center space in SMB and enterprise. Extend and expand our growth in the cloud space and ultimately be truly thought leaders and innovators in the IOT market.

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