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HP wheels out the Beijing pizzazz

What’s a tech company to do to create a bit of pizzazz in the midst of an otherwise numbing new product blitz? After all, even IT managers can have too much of a good thing.

It could bring on some entertainment or strike a deal with the entertainment industry, perhaps.

At HP World Tour in Beijing this week, Hewlett-Packard did both. It also trotted out chief executive Meg Whitman and operations chief Bill Veghte to add some heft to the long list of product announcements and to reassure customers the company is still sound.

The new hardware products ranged from laptop-tablet hybrids to a new storage system based on the same solid state memory that is familiar to mobile device users. In between were new printers, HP’s traditional cash cow, and PCs and servers, product lines whose sales have recently dived.

There were also additions to the US$119 billion company’s software and consulting service offerings.

It was all evidence of HP’s continuing emphasis on innovation, declared Whitman and Veghte.

The fact that a number of the touted advances – the 3PAR storage products, Autonomy tools for analysing big data and Extreme document management system, which includes a handy module for speeding insurance claims that might find some customers in Christchurch – were the fruits of acquisitions didn’t diminish the company’s innovation quotient , said Veghte.
HP 4320t - Front

He pointed out that 3PAR, for instance, had gone from being a US$100 million business to a US$1 billion earner since HP took over the company and extended its product range.

The Autonomy story is less happy: HP bought the UK company for US$10 billion in 2011 and then decided the price was inflated and wrote off half its value. US and UK regulators are investigating.

Throughout the two-day event, repeated mention was made of the company’s new Moonshot servers, a product name that could have been tailor-made for a Chinese business audience that would be justifiably proud of the country’s latest space mission.

HP has made Moonshot a mission-critical part of its own operations, Whitman said, hosting, which gets 300 million hits a day, on the energy-efficient and space-saving servers.

We are now powering the entire site on the equivalent of 12 60W light bulbs, she said.

Whitman, who has been 20 months in the top job at HP having previously headed eBay and after making an unsuccessful run under the Republican banner for the California governorship, was admiring of China’s economic oomph. The same can’t be said of HP’s recent record: a 6 per cent revenue drop in the 2012 year and a fall in net income of a third to US$1.08 billion in the second quarter this year compared to a year earlier.

As always I am deeply impressed by the energy, the determination and the accomplishments that are the hallmarks of China’s continued growth, said Whitman.

But customers shouldn’t be concerned about HP’s ability to turn its fortunes around, she said.

You have to have confidence that your partner will be around today and tomorrow and the day after that. Believe me, HP is here to stay.

Asked later how revenue pressures affected HP’s day-to-day activities, Veghte said the measure that mattered to the company was free cash flow, which reached US$5 billion in the first half of this year and was 44 per cent up in the second quarter year on year.

We have an ability to generate an enormous amount of free cash flow, he said.

Large tech companies typically had parts of their businesses that were in decline and next-generation parts that were accelerating.

The classic example is 3PAR, which is absolutely on fire, he said.

A theme of both executives was that IT is at a once-in-a-generation inflection point characterised by a shift to cloud computing – by 2016 75 per cent of IT environments are expected to be using cloud services; by security concerns; by a preoccupation with big data; and by mobility.

HP’s hardware, software and services offerings give it the breadth and depth to solve those issues for customers, Whitman said.

We are uniquely qualified because invention and innovation are heritage values for Hewlett-Packard – they’re in our very DNA – and today we’re spending more on R&D than ever before.

The entertainment aspect of the World Tour event was a series of skits, reminiscent of some staged by Microsoft at the launch of a now ancient version of Windows, that were intended to demonstrate the new products’ capabilities. The skits’ most striking feature was the stunningly realistic backdrops on high-definition 10m by 3m screens the maker of which wasn’t disclosed.

The entertainment industry input into the event came in the person of DreamWorks chief executive Jeffrey Katzenberg, who announced HP as technology partner for Oriental DreamWorks, a Chinese joint venture involving the animation studio.

HP continues to be a trusted partner that helps us produce an innovative product with compelling content that engages the world, he said.

DreamWorks’ next piece of innovation, for release in US cinemas in July, is Turbo, about a snail that can go fast. The movie’s impact on – not to mention usefulness to – the world is certain to be much more fleeting than HP’s latest crop of innovations.

But it’s also sure to get more people talking. You could forgive HP for wanting to bathe in a bit of reflected Hollywood glow.

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