HP completes Three Year cost cutting plan
HP has completed its three-year IT shake up, and has saved around $1 billion in costs, thanks to the skills of Randy Mott, Hewlett Packard’s chief information officer. Mott jumped ship from computer manufacturer Dell back in July 2005, just prior to announcing 14,500 job cuts to balance the books. In a bizarre coincidence, IBM also laid-off 14,500 staff to do exactly the same.
An ex-CIO for retail chain, Walmart, Mott certainly knew how to run the IT operations of a large business. Mott was given a $15.3 million compensation package to encourage him to join them and give their IT departments a damn good seeing too – you’ve got to spend some money to make some money, right? As the past shows us, IT vendors are generally rubbish at using IT equipment cost-effectively, as they buy for themselves to uses, it at little or no cost, that doesn’t pay the bills.
In 2005 when Mott took over as HP’s CIO, they ran 85 data centres. Since his reign began, he had consolidated these down to a “six pack” of three redundant, highly virtualised data centres. Motts aim was to cut the 25,000 servers within those 85 data centres to just 14,000 machines within the three mirrored data centres. HP has also cut back on its application portfolio, removing 6,000 of them. The company wanted to cut them down to 1,500 applications, and maybe even as low as 1,100, but didn’t quite manage it when the re-shuffle came to a close.
As part of the tightening of belts, HP have started using a SAP ERP system more, which HP chief executive officer Mark Hurd spoke about last week during the company’s report on the fourth quarter financial figures.
The company has not provided an answer yet n the exact amount of servers its cut back on, but claimed today that it has cut down its servers by an impressive 40 percent, while boosting its processing power by an staggering 250 percent. The company boasted that it has reduced the costs of its networking by 50 percent over the last three years, while managing to triple its bandwidth. Impressive.
With the world going a bit ga-ga over everybody’s green credentials, earth lovers will be pleased to hear that HP has reduced its power consumption by 60 percent since 2005. This is all very impressive. That a company can shed that amount of costs in just three years through part-virtualization amongst other things is a great advertisement for how other companies should be running their data centres.
HP projects $128 billion in revenue in 2009.
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