New HP telecom unit puts money where ambition is

HP this week said it created a new business unit – dubbed HP Communications and Media Solutions (CMS) – that pulls together all of its telecom and media solutions under a single banner.

The new HP CMS unit will be run by former Alcatel-Lucent exec Erwan Menard, who will serve as vice president and general manager, with full profit and loss accountability for the new unit. HP previously ran its telecom business as an “overlay unit,” with capabilities assembled under the HP Communications, Media and Entertainment (CME) banner but ultimate financial management flowing back to individual product units, said Joy King, director of marketing programs and communications for the new HP CMS.

In telecom, HP competes with an array of large players, probably most directly Oracle and IBM, while simultaneously competing and partnering with (and also supplying) traditional network equipment providers like Alcatel-Lucent, Ericsson or Nokia Siemens Networks.

While the new unit shares almost the same acronym (CMS vs. CME) and much of the same ambition, the focus on delivering cross-product solutions and the responsibility to deliver to the bottom line makes all the difference, said King.

“That which you measure is what you do,” said King. “Ultimate authority, decision-making and investment come in a business like HP when you have full ownership of profit and loss responsibility. HP, like most tech companies, has primarily been a product line company. But service providers don’t buy products today, they buy solutions.”

Indeed, HP is moving to this more solution-based business unit set up across the company – with telecom being the first unit to be established under this new model, King said.

The new business unit will focus on deliver market-based solutions that include products, consulting and integration services – including professional services from HP’s recently-acquired EDS unit. The initial solution focus is on four key areas: service delivery infrastructure and applications, including core network solutions, SOA/Web 2.0 architectures and services riding over such platforms; next-generation OSS, spanning the entire service fulfillment process; customer intelligence and billing, leveraging HP CentralView; and digital media, including distribution and storage.

In delivering those solutions, HP will pull together a wide array of software and hardware capabilities it has always sold to telecom customers, from blade and other server platforms for running NGN telephony applications to storage boxes for managing HLR, HSS and other subscriber databases.

The new business unit will have fully aligned sales, marketing and solutions creation and delivery teams. Unlike the past, it will not include country-based units, allowing innovations from any geography to flow back into the unit and benefit customers across the business, King said.

HP will not break out financials for the new business unit, but overall (across all product groups) the communications, media and entertainment sector is “north of a seven billion dollar business” for HP, making it one of the “crown jewels” of the tech giant’s revenue stream, King said.