HP ProFile: Frank Barker, VP, HP Solutions
A Q&A with Frank Barker, GM of Utility Computing Services Division and VP of HP Solutions
When HP first announced its e-services strategy in May of 1999, it identified three linchpins of the e-services marketplace: apps on tap, portals and dynamically brokered e-services. Since then, HP has announced a number of initiatives to drive apps on tap, or its Internet utility computing model. HP Professional decided to explore those initiatives by talking to Frank Barker, General Manager of HP’s Utility Services Computing Division. Barker, we found, is not only responsible for apps on tap but was recently given additional duties. HP’s chief of the Utility Services Computing Division is now also serving as one of the general managers of HP Operations, the new organization formed from the consolidation of HP’s separate outsourcing services groups.
HP Pro: Perhaps you would start off by explaining what HP means by utility computing.
Barker: The new utility computing model is based on a big shift taking place in the marketplace. Today, people are buying their applications and having them delivered over a network, whereas in the old model, applications typically sat in the IT shop, somewhere in the organization. We believe this new model for how you get your computing is a fundamental shift in the whole of the computing marketplace. HP has marketed this as the rise of apps-on-tap – applications delivered over a network.
What’s happening is that utility computing is becoming possible because of the standardization the Internet brings. If you go to any Internet data center today, you’ll typically find the operating systems are standardized around UNIX, Linux and NT. The database is typically standardized around Oracle. The network and system management is typically standardized around OpenView. And, the protocols around the IP networks are very standardized. So, the standardization is taking place anyway.
We’re basically taking the standardization that’s starting to occur de facto and ratcheting it up to the next level for our customers. It’s typically happening box by box or infrastructure by infrastructure for each customer, and what we’re doing is saying, "Well, rather than have it be done one by one, why don’t we design an infrastructure that takes advantage of all this standardization and sell it to multiple customers."
HP Pro: So you’re selling a series of services based on standardization?
Barker: Exactly. And we’re offering an infrastructure that is pre-defined and already there, so service providers can get to market quicker. They don’t have to worry about filling out the infrastructure. And they don’t have to worry about the scalability issues that come with growing their infrastructure. We take care of all that for them.
The big thing for most customers, when you talk with them, is it’s kind of a hidden treasure for them. They’re able to take some of their key people and have them focus on the front end of their business, adding value on the front end for their customers, rather than on the back end, building out their IT.
HP Pro: Your target market is service providers?
Barker: Definitely. By helping service providers take e-services out to market, we can drive the growth of the ASP and service provider model. That’s our key strategic focus.
Because service providers pay only on a usage basis, the costs fit very much with their business models – their revenue is typically based on usage, and cost of infrastructure is based on usage.
HP Pro: This is a relatively new area for HP. How did the company – and you personally – get into it?
Barker: Prior to moving to the United States, I was based in Europe, running the consulting business for HP in Europe. And Tom Ashburn [Senior Vice President of HP’s Customer Service and Support Group] felt there was a business to be made out of utility computing. He asked me to come over here, to check it out, and build a business, if it could be done. So, I moved here in May of last year, basically with nothing, to look at this opportunity. And what we’ve done over the last 14 plus months is put together a business plan, get it finalized, and hire a management team and people to go to market with Internet utility computing. We formally announced we existed in September of last year. That’s when we kind of came out of the closet and said, "Hello, we exist." At that time, we laid out a roadmap of services that we would introducing over the next 12 months. We’ve been announcing those services, typically, every couple of months.
HP Pro: What are some of those services, or offerings?
Barker: I’ll present them chronologically. In November, we announced Messaging-on-Tap, and then in December, we announced E-Learning-on-Tap. In February of this year, we announced IT Billing-on-Tap, and in March of this year, we announced Infrastructure-on-Tap.
HP Pro: Let’s discuss the first offering, Messaging-on-Tap.
Barker: We went out with Messaging-on-Tap first, because we thought taking Microsoft Exchange into enterprises as a utility service was one way to open up the enterprise to this new model of how you get your computing. For Messaging-on-Tap, we’re going directly to enterprises to open up the enterprise to the service providers. Then, we expect the service providers to come in selling their services. So Messaging-on-Tap is all about opening up the enterprise to this new model and putting HP’s weight behind it.
The fees are based on usage, so if enterprises have a number of users on the system – 10,000 users, 20,000 users – they pay for that at the end of the month.
HP Pro: What is the typical size of businesses adopting Messaging-on-Tap?
Barker: Small and medium-size businesses have been buying this model for the last six to nine months, but large enterprises had not really bought it in any volume. Now that’s changed. A major bank, the Canadian Imperial Bank of Commerce, one of North America’s largest banks, recently adopted Messaging-on-Tap. The bank has 8 million banking and business customers, and 45,000 employees globally.
HP Pro: What prompted the bank to choose this service?
Barker: The bank had different messaging environments, based on geographic decisions or based on business decisions in different parts of the organization. They had to decide whether they’d build their own IT infrastructure for standardized messaging or whether they’d just outsource what they had and give it to someone else to manage. There was a third option, which was to have someone do it all for them – design the architecture and manage everything. In the end, they chose this third option.
We’re in the process of implementing it right now, connecting 42,000 users to Exchange over the next 12 months. HP is taking care of all the operations, the upgrades, the deployment, the security and some of the end user training. And we’ve made service level commitments on how this will be delivered and what the availability will be – just like a utility. For example, we guarantee that when a message is sent, it will get there. Also, that a message sent from one part of the world will be delivered to any other part of the world within five minutes.
HP Pro: How about your other offerings? Infrastructure-on-Tap, for example?
Barker: With Infrastructure-on-Tap, we’re targeting service providers directly. If you’re a company that’s setting up in business, say, a dot com offering some service, then rather than build out your computing department to take your service to market, you can just buy that service from HP. I think of HP’s Computing Utility Services Division more as the enabler of e-services, because what we do is help service providers get into business and grow. But when you think of Infrastructure-on-Tap, we’re actually offering infrastructure as an e-service that people buy on a usage basis.
Now, as companies start to adopt that business model and buy Infrastructure-on-Tap, they usually find they need a way to bill their customers. When you create a bill based on a computing service, it’s quite complicated. So, we offer IT Billing-on-Tap, a billing utility service where customers pay per bill per month to have their bills delivered to their customers.
We also offer E-Learning-on-Tap, and this is one we’ve done in conjunction with HP Education. What this offers is an Internet classroom capability so that companies can offer, say, training to their employees on a new product or a new service by setting up a virtual classroom. Registration and training can occur online, distributed over the Internet.
Also, our roadmap includes plans for an offering in the area of mobile e-services, and we wholly intend to do that, although I can’t say more about that today.
HP Pro: Who are your typical customers for Infrastructure-on-Tap?
Barker: The typical customer who finds Infrastructure-on-Tap attractive is a service provider who is looking to rapidly scale up their business. They’re looking to grow very rapidly, and they know they need a reliable, robust infrastructure to run their business. We’re typically targeting large organizations that need to provide a high level of service, like B2B hubs. When you create a B2B hub, you need a very big infrastructure. So do companies looking to sell their services in the enterprise space or in large companies.
Among the companies that spring to mind here is Lawson Software, which has a recruitment service, called ijob, that they sell to corporations. That service is paid for on a subscription basis. Lawson offers the service and we provide the infrastructure. With Infrastructure-on-Tap, billing is tied to the transaction, so HP charges according to the specific usage by each customer subscribed to the Lawson service.
Another company is IPNet, an ASP that provides software that helps people set up B2B hubs. And IPNet offers that software as an ISV. In other words, they sell the software license or they offer the software as a service. And when they offer it as a service in the ASP model, we provide the infrastructure.
HP Pro: HP seems to be investing heavily in apps-on-tap. What’s the size of the market?
Barker: The market’s a great question. We’ve discussed this a lot with industry analysts. In fact, I recently had the opportunity to present at a colleague industry analyst event in Chicago. And I presented this model as a new emerging market that HP was playing in. Over the next couple of years, this market will grow, we think, from a very small marketplace to about a $3 billion marketplace.
If you also look at the marketplace that it sits within, it is typically sitting within an outsourcing marketplace. It’s another form of outsourcing, and the outsourcing marketplace is expected to grow to about $160 billion by 2003. That includes mainframe outsourcing and legacy application outsourcing. So within the overall market, it’s relatively small, but in itself it’s still a big market, very focused. And it’s focused on the new e-economy rather than on traditional mainframe and legacy environments. u
– Jean Nattkemper
HP Professional Editor at Large