COMPUTER BUSINESS REVIEW

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Issue Date: June 2004 (es)

Return on investment the number one IT driver

1 June 2004
Graeme Bell

eStrategy recently conducted a number of interviews with some of Hewlett-Packard's (HP) (ProCurve Networking Business) key technology and business strategists. Every one of them indicated that 'return on investment' (ROI) was the number one issue facing every IT professional.
Wenceslao Lada, HP ProCurve EMEA manager
Wenceslao Lada, HP ProCurve EMEA manager
Wenceslao Lada, Europe Middle East and Africa (EMEA) manager, described the number one IT issue in European companies as being `costs/budget pressures'. "Results of Gartner's Chief Information Office (CIO) Survey 2003, showed that for the third year in a row, return on investment is the number one issue affecting the IT department in all businesses, no matter their size," he elaborated. "The breakdown is best shown in the following list:
* Large corporations.
* Return on IT investment is key for them.
* Security, mobility, and lower budgets are their main issue.
* Starting to deploy Voice-over-Internet Protocol (VoIP) replacing actual PBX infrastructures.
* They need long term relationship and directions.
* Medium accounts.
* Return on IT investment, and price/performance are key for them.
* Security is their main issue.
* They rely on their VAR to design, implement and maintain their IT infrastructure.
* Small accounts.
* Price/performance is the key driver for them.
* Internet access, their business and basic office applications such as e-mail are their main issues.
* They rely on their VAR or reseller IT infrastructure.
Lada continued: "A recent IDC (Western Europe) statistical analysis of the EMEA IT market reveals the following interesting statistics:
* Over 32 million companies.

* Average company size is below three employees.

* 18 million PCs purchased per year.

* 10 million printers purchased per year.

* Between US$3000 and $5000 IT spending per company per year."
John McHugh, HP vice president and general manager, emphasised the importance of continued research and development (R&D) as a means to enabling greater ROI. "In an environment that has seen many technology providers, including our major competitors, cutting R&D; budgets, we increased our R&D; spending by 25%. Our confidence in our products is born out by the fact that we have one of the lowest rate of returns on hardware, despite the unconditional 5-year warranty on all our HP ProCurve products, including moving parts such as fans, and typically high-risk components such as power supplies."
John McHugh, HP ProCurve vice president and general manager
John McHugh, HP ProCurve vice president and general manager
Worldwide director of strategy and business planning of the HP Networking Business, Brice Clark, had the following to say about the network of the future from a technological perspective, "There is little doubt that the future of networking will be a single network, with a single network fabric, Ethernet. Furthermore, the user's connection to the network will increasingly become location independent, and our long-term goal is for networking of the future to also be media-independent ie, wireless/cable etc.
Brice Clark, director of strategy and business planning, HP ProCurve Networking Business
Brice Clark, director of strategy and business planning, HP ProCurve Networking Business
We asked Clark whether he thought Moore's Law would cease to be relevant in the future and whether this belief was affecting ProCurve's strategic planning.
"As we see technology at the moment, Moore's Law will cease to be relevant. The physical size of silicon molecules has become an issue as we design semiconductor products and our biggest current hurdle is still that of power dissipation. However, no doubt there will be new discoveries that will allow Moore's Law to continue to be relevant into the future. Therefore HP ProCurve will continue to design and develop our products for an open-ended future."
"However, what is fundamental to HP's long-term strategy is that we afford users increasingly improved returns on investment (ROI), or what we like to call 'Return on IT'," he concluded. "It is HP's goal to make our products as future-proof as possible. We plan for our hardware products to have an operational life of more than five years and we will do this through continuing to offer free software/firmware upgrades to all our products."
For more information about the HP ProCurve range of products, contact Louis Helmbold on 011 785 1000 or louis.helmbold@hp.com, or visit www.hp.com/go/hpprocurve


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