HP Combines Server Businesses

Having helped pioneer the concept of converged systems, Hewlett-Packard is now eating its own dog food. HP announced the formation of a new Converged Systems business unit April 29. At the same time, it also merged its Business Critical Systems (BCS) and Industry-Standard Systems business into a single HP Servers unit.

HP’s Converged Systems group will link together a variety of properties, including Apache Hadoop, SAP HANA, the HP CloudSystem, and the Vertica database management software.

As an indicator the converged market’s growing significance, research firm IDC will begin tracking the converged systems market beginning in the second quarter. “Adoption of integrated systems has been growing quickly and is likely to drive more than $3 billion in annual sales this year, Eric Sheppard, research director of storage software, wrote in a statement.

Another IDC analyst, Jed Scaramella, seconded Sheppard’s statement: “Where the traditional infrastructure hardware markets are forecasted to grow at mid-single digits over the next five years; IDC expects integrated systems to increase at a CAGR of more than 50 [percent]. This emerging segment represents significant opportunity for technology vendors.”

Combining HP’s BCS and ISS groups will lump together two product lines with their own issues. HP’s BCS is where Intel’s troubled Itanium processor hides out (BCS business dipped 24 percent last year). While HP’s industry-standard servers include the ProLiant brand, which generated 32.1 percent of all X86 unit shipments during the fourth quarter of 2012, the company’s overall share of the server market is slipping (along with that of pretty much every other server vendor). Analysts have attributed the slowdown to budgetary constraints delaying purchases.

The combined business will include HP’s Moonshot server, designed for low-power workloads, along with the ProLiant brand and the HP Integrity platform. Will HP be able to use the new reorganization to boost its growth? That should become clearer in a quarter or two.

HP representatives did not return requests for comment.

 

Image: HP

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