"Information: the currency of the digital age"
December 6, 2004
© Copyright 2004 Hewlett-Packard Development Company, L.P
All rights reserved. Do not use without written permission from HP.
Well, thank you Charles and good morning everyone. I am delighted to be with you on the opening day of Oracle OpenWorld, and to be part of the first event that combines the database and application sides of Oracle's business.
Two years ago, I had the pleasure of speaking at both Oracle AppsWorld and OracleWorld, and one of my themes at that time was that technology companies like HP and Oracle were no longer driving the technology agenda - that you, our customers, were in fact in charge.
And in fact, this was just the first wave of an even more transformational shift. Customers are still setting the technology agenda, but today, those customers are not just our customers - they are your customers as well. And the reason is that the agenda is not as much today about technology as it is about information.
Whether your customers are businesses, or consumers, or citizens, or all of the above, what more and more of them are telling you - just as ours are telling us - they're telling you what kind of information or service they want; they're telling you what kind of services they need or demand; and they're also telling you how and when they want those services or that information to be delivered to them.
It could be Wal-Mart telling its suppliers to begin using radio frequency ID tags on their products. It might be mobile phone users asking their service providers to offer richer digital content, or it might be decision makers seeking everywhere, all-the-time access to business intelligence, resources and data.
Whatever the circumstances may be, it's clear that more and more people want access to more and more information, and they don't want to be limited by technology, by location, by time of day. And in fact, that is just the beginning.
I think that everything we've lived through during the past 25 years, including the dot-com boom and the dot-com bust, including the Internet and wireless networks - all that has come before has been the warm-up act. We are now entering the main event of technology, and what I mean by the main event of technology is this is an era where technology will truly transform every aspect of business, of government, of society, of life.
It will not happen all at once, but simply stated, we are entering a world now where every process and all content are being transformed from physical and analog, to digital, mobile, virtual and personal. And by personal, I am not just talking about personalization of content and services, although of course I mean that as well, but what I'm really talking about in this context is the ability of individuals, consumers, citizens, business professionals - anyone - to control the services and the information they get as well as when and where and on what device they get them.
It is clearly happening in the enterprise market with supply chain, with customer relationship management, with sales force automation. It is happening in the public sector with e-Government and network-centric operations. It is happening in the consumer space with digital entertainment - digital music, digital photography.
Think about the impact that radio frequency ID will have as we effectively digitize supply chains and inventory management. Wal-Mart, the example I gave a few moments ago, is really just the beginning. RFID is going to transform business processes, speeding up supply chains while also making them more visible.
It will enable companies to make faster, smarter business decisions based on real-time information, and over time, the combination of RFID and sensor technology will provide that information at every stage of the supply chain - not just what items are in inventory and where they are, but what's happening to them during the shipping process, and all the hand-offs from suppliers, to manufacturers, to distributors, to customers. And this of course will add trillions of new devices to the network within the next few years, not to mention the huge volumes of information - data actually first - that must be stored and analyzed and managed and shared, because of course, the goal is to transform data into information and information into insight.
Now, these same transformations - physical and analog, to digital, mobile, virtual, personal - these same transformations are happening in every industry, as well as in government. It's happening in health care, in education, in entertainment, in telecommunications - you name it. And these transformations have very significant implications for how we store and manage information, how we distribute applications and services across the enterprise, as well as to customers, or partners, or suppliers, or employees, or citizens.
The issue is no longer where the information lives - what server, what application, what database, what data center. It's actually now all about putting information to work. It is about transforming data from passive to active, from static to dynamic - transforming data into insight.
Now, all of this demands a new approach to information technology from the approaches of the 80s or the 90s. It demands an approach, we believe, focused on linking business processes, applications and infrastructure in a seamless and transparent way to support the business strategy or the mission and to create greater value.
And that brings me to two other trends that we think are also fundamental in this era of technology. The first is that simplicity and manageability and adaptability are becoming the new technology imperatives.
The truth is that while technology is becoming more core to everything, and every process is being digitized, technology is still too complex; it is still too hard to manage. And often today, technology is a barrier to change and business agility. And this is why HP is investing so heavily in improving the simplicity, the manageability, the adaptability of our products and our systems so that they are easier to use, so they work seamlessly together, and so that they're simpler and more effective to manage.
Secondly - and this is really important, I think - value in this era of technology is delivered horizontally, not in vertical silos. The 80s and the 90s were the eras in which value was created with vertical organizations, and technology was implemented vertically - vertically by division, by department, by application, by process.
Content was connected to very specific devices, or infrastructures were connected to very specific applications. But stand-alone islands of automation and technology no longer drive sufficient value. And you can look in any industry, any part of government or society, and what everyone is talking about is the requirement for silos to begin to interact and interoperate. Silos can't interact and interoperate unless the technology does.
And so today, it's about making a heterogeneous world work together and speak a common language. It's about connecting up what was not connected before. And this is not just about networking devices. It's about networking businesses and companies and employees and suppliers to customers, and getting those silos to talk to each other. It is now about horizontal value creation, not vertical.
Now each of these trends is powerful in its own right - digital, mobile, virtual, personal, simplicity, manageability, adaptability and horizontal value creation. Each of these trends is powerful in its own right, but when you put them together, they are truly transformational for all of us. It is no longer enough to manage costs or improve quality or mitigate risk - although all of those things are important. A digital, mobile, virtual, personal world demands that companies or departments also become more agile, more responsive to change, able to collect and act on all kinds of information in real time.
Incidentally, these three trends are why HP has made the portfolio choices we've made. It is why we play in the consumer market as well as the business and public sector markets, because in this era of technology, these markets interact. It is why we've invested so heavily in management software. It's why our leading positions in imaging and computing and services are important so that we can help transform and integrate the physical and the digital worlds.
But the challenge now for every IT organization is to build an IT environment that is more responsive to change - that is simpler, horizontally integrated, more manageable, more adaptive and more secure. It means having the tools. In this case, of course, I'm here to talk about the tools from HP and from Oracle to turn data into information, information into knowledge and insight, and knowledge into competitive advantage, and to do it in a matter of minutes or seconds, not days or weeks.
And most of all, it means turning IT into greater value. Now you can't do any of that if your vital information is trapped in organizational silos or in systems that can't communicate and interoperate with other platforms across the enterprise. Vertical silos have to give way to horizontal processes and information flows that support the entire business, rather than just discrete processes or departments. You have to be able to deliver the right information to the right people at the right time, in the right context. Grid technologies, web services, knowledge management, virtualization software now make it possible to share applications and business intelligence and IT resources across vast networks.
You have to increase the business value of IT by delivering it as a service to the enterprise, and that means you need to have a complete view of your whole IT environment - from business processes to applications to infrastructure, and the tools to manage and control the whole environment in real time.
Now, the way we see it at Hewlett Packard, the answer to these challenges is a service-oriented IT environment that is tightly and dynamically tied to business requirements, that is managed as a single, globally distributed resource that is powered by modular standards-based components, and that draws on virtualized systems that can scale up or down to meet shifting business demands.
Building on our own experience over the last several years, the needs of our customers and our partnerships with companies like Oracle, HP has developed a proven evolutionary approach that allows enterprises to meet these challenges and to use rapid change to their advantage. And we call this the Adaptive Enterprise; it is HP's vision and approach to building an organization in which business and IT are synchronized to capitalize on change.
Now, we think there are three benefits to this approach. The first is simplicity. Simplicity is all about reducing complexity, which is all about reducing IT cost, leading to lower business operations cost and greater integration to master change.
The second is agility - enabling you to adapt to business needs in real time and to accelerate time-to-market, time-to-decision, time-to-response.
And the third is value, which is focused on freeing up resources for innovation, increasing revenue and profitability, and building a competitive advantage.
Our goal is to tightly align HP and our partners around a model focused more on business value, or mission value, and customer experience - more on value and experience than on technology. Now obviously, the technology is still important because it is the enabling capability, but we think you are looking for services and solutions that make technology easier to deploy and support, that make information easier to manage and share, and that in essence allow you, enable you to do more with less.
Let me give you an example of what I'm talking about. One of our customers - I could have picked several, but this was an interesting example. There's a company called ArboNed, they are the fastest growing provider of occupational health and safety services that happen to be in the Netherlands. ArboNed wanted to expand its use of the Internet as a service delivery medium, but it was hampered by an aging, IBM-based, vertically oriented infrastructure. The company turned to HP and Oracle for a solution that would enable it to consolidate servers and accelerate its development as an e-business.
We deployed a cluster of two HP Superdome servers running HP-UX and Oracle 9i Real Application Clusters, which helped the company move from a distributed infrastructure with 40 separate data centers, each with its own equipment and management costs, to a single web-based environment. And with this consolidated infrastructure, ArboNed is far more agile and adaptable. They can conduct their entire data-intensive operation online and in real time. They can deploy new services more quickly and without adding costs, thereby increasing revenue and market share. And their customers have access to a growing data warehouse of business intelligence through the company's Internet portal.
Now we were able to help ArboNed build an adaptive enterprise because we've been through the same process ourselves. HP has the experience as well as the technologies, products, services, software and solutions to meet the unique needs of our customers. And I think I have said to this audience on other occasions, but we believe we can't offer something to customers unless we do it ourselves. And so everything that I'm talking about here - from the technologies, the tools and the partnerships to the approach - is how we have gone through a very complex transformation of our own company.
But in addition to that experience, we think we have a very important other advantage as well, which is the partnerships that we bring to the table. Strong, strategic partnerships with world-class companies like Oracle across the worlds, not just of computing, but also of communications and consulting.
Now some of you have heard me say this before, but I want to repeat it because I think it's so fundamental to the way HP does business. We are a partner by strategy, by personality, by choice. It is part of our DNA as a company, and we think it's essential to the value and the experiences that we deliver to our customers in every market we serve, whether it is enterprise, or public sector, or small and medium business, or the consumer market.
Now, when we talk about strategic partnerships like the one we have with Oracle, we mean that we go to market together. We mean that we jointly develop products and solutions. We work closely in the field, and we look for ways to create customer value that's new and significant. And these relationships also help us shape where we take our own businesses, where we focus our innovation and where we leverage the innovation of our partners.
HP today is generating 11 patents a day. It is the fastest rate of innovation in our company's history, but we always focus our innovation where we can make a unique contribution and lead, and we leverage the innovation of our partners for the rest. And that kind of collaboration enables us to deliver more business value for our customers because we can optimize our systems, our services, our investments. That's why HP and Oracle consistently deliver leading performance and leading price performance on key industry benchmarks.
Just as an example, we together recently announced a new world record - a 10-terabyte data warehouse benchmark using Oracle database 10g, Oracle Real Application Clusters, HP-UX, two HP Integrity Superdome Servers. We outperformed IBM's best result using 20 percent fewer processors, while offering more than 33 percent better price performance.
Now, what's important about this performance though, is not just the speeds and the feeds. It's our ability demonstrated time and again over many years to deliver solutions that meet the most demanding requirements of our customers. And that's why more Oracle database customers use HP systems than any other vendor. It is why more than 70 percent of HP-UX customers run Oracle. Together we serve more than - it's actually 88,000 customers around the world - which is a base of experience that helps us create even more value for our customers.
Now, a big part of this value is helping you reduce your total cost of ownership and accelerate the return on investment on HP or Oracle solutions. A good example from another part of the market is Lansing Community College. Lansing Community College serves about 18,000 students in South Central Michigan, and until recently, they also were struggling to deliver services using an infrastructure that had disparate, disconnected applications and very high maintenance costs.
They consolidated on HP servers and storage running a full range of Oracle ERP applications, and by doing so, the college was able to increase productivity by giving users faster and more reliable access to data and applications. So, course enrollment statistics that used to take, for example, a week to compile, are now available in five minutes. Up time is virtually 100 percent, and the school is also saving about $600,000 a year in IT administration costs.
And we're not just doing this for enterprises and public sector institutions in government, education and healthcare. We are also bringing the benefits of the HP-Oracle partnership to mid-market customers as well.
So today, we are announcing an initiative to expand sales of Oracle E Business Suite Special Edition on HP's industry-standard ProLiant servers. This initiative is going to enable our reseller partners to deliver validated, pre-tested configurations for up to 50 users, and reduce the cost of deploying Oracle applications on the latest ProLiant servers. HP and Oracle partners will also offer implementation services, education and support to these mid-market companies.
Now, one of the things that I think makes the HP-Oracle partnership so powerful is that it builds on a common view of the challenges faced by our customers, as well as a shared commitment to innovation, to open standards and to delivering a superior customer experience. And I think nowhere is that more relevant than in the joint work that we're doing to help our mutual customers become more agile and more adaptable.
HP's vision of the Adaptive Enterprise is consistent with Oracle's vision for helping enterprises manage information. So in fact, if you put HP's Darwin Architecture for the Adaptive Enterprise - the Darwin Architecture is the pieces, process, applications, technologies - if you put the Darwin Architecture side by side with the Oracle Information Architecture, you will see just how close and aligned these visions are.
But of course from your point of view, it has to be about more than vision. It's also about giving you the tools and the solutions you need to synchronize business and IT today, and the expertise to help you apply them consistently across business processes, applications and the underlying enterprise infrastructure.
And so to that end, HP and Oracle are focusing on four key areas: reducing complexity through virtualization, improving resource utilization, automating management so that you can shift your IT budgets from maintenance to innovation, and building solutions using modular industry-standard building blocks.
It all comes together in what HP and Oracle call the Grid-Enabled Adaptive Enterprise, which I spoke about when I was here last year, which is based on resource virtualization and integrated management technologies provided by HP and Oracle on the Intel architecture.
The Grid-Enabled Adaptive Enterprise is deeply rooted in a long history of technology collaboration. You're probably aware, for example, that Intel and HP jointly developed the 64-bit Itanium architecture, the next generation of high performance computing technology. Oracle based its Grid Computing Clustering Solution on HP's groundbreaking TruClusters technology.
HP and Oracle have integrated management software to provide complete management capabilities at all levels of the stack. And Oracle and Intel have optimized Oracle 10g for the Intel environment.
So, as a result of that deep and rich history of collaboration, we are able to deliver integrated technologies and solutions that enable large and mid-sized companies to improve business agility by building flexible, efficient, optimized IT infrastructures to increase the quality of service by providing industry-leading performance and high availability, and to reduce costs through better utilization of resources.
And so with the Grid-Enabled Adaptive Enterprise, you can deploy clusters on virtually any HP server. You can identify and allocate and reallocate IT resources from servers, to storage, to network capacity so that you can adjust to rapid changes in workloads without any user interruptions.
You can rapidly deploy operating systems and applications, and you can monitor and manage service levels at all layers of the environment, including your Oracle environment in the overall IT infrastructure from a single management console.
And so, what all that means is that instead of building infrastructures to handle peak loads, you can build systems that distribute loads more evenly across your entire infrastructure with the built-in flexibility to easily re-provision workloads as needed during peak times. And so the result obviously is higher utilization, greater agility and lower IT management and administration costs.
And perhaps most importantly of all, we're helping you create an infrastructure that supports and embraces change by creating a dynamic link between business and IT, an infrastructure that allows you to deliver IT services that are tightly aligned with business strategies and processes.
So, how do you get there?
There are three, we think, fundamental steps in building a Grid-Enabled Adaptive Enterprise - and I would say as well that it has to be built; it's not just a single product you go buy - but there are three fundamental steps. First, standardize on affordable, high-density modular servers and storage based on technology from HP as well as on Enterprise Grid Software from Oracle.
This is not just about technology standards however. It is also about standards for managing your business processes, and standards for how you manage the underlying infrastructure. Standardization, whether it is standardization of business processes or applications or the rules governing the underlying infrastructure, standardization reduces the upfront and incremental cost of computing, lowers operations cost and help simplify your IT infrastructure.
Now of course, I am well aware that there are also lots of change management aspects involved in standardization. It is not easy for an organization to move from vertical specialization to horizontal integration and standardization, but it is fundamental to enabling an enterprise to be adaptive, and it is fundamental to increasing speed and decreasing costs.
After standardization, the second step is consolidation. Consolidate your systems into fewer data center environments - ideally, if you can, one data center. Many companies are already on this path. Gartner reports that nearly 70 percent of companies are consolidating their data centers, and 25 percent are considering it. This consolidation is not just about cost savings. It is also about optimizing and automating critical business processes to improve business performance.
Third, automate your systems to better manage scalability and efficiency as your systems and your organization grows. In a grid environment, you will probably need to manage a pretty large number of clustered servers, and so automation frees your IT staff to focus on what's critical to your business, or to your mission, rather than having them focus on the routine operations of the infrastructure. And that's why management is such an important element of the solutions offered by HP and Oracle.
Now, there's a lot more to this than I have time to cover today, but if you want to learn more, I would really encourage you to visit the HP booth or to attend the two breakout sessions that we are offering today. But I do want to point out that the Grid-Enabled Adaptive Enterprise is not simply a vision of how to become more agile or more efficient. All of the products and services needed to build a Grid-Enabled Adaptive Enterprise are available today, and of course, they're available from HP and Oracle.
Other vendors may be able to offer you some of the pieces, but no one else can offer you the integrated technologies - the leadership hardware, software and services - that make this such a powerful solution for the enterprise.
The Grid-Enabled Adaptive Enterprise is designed for a world where every process and all content is being transformed from physical and analog - and frequently more static than we would all like - to digital, mobile, virtual and personal.
Why did we design it that way? Because in the world we are now entering, the winners - the teams that accomplish their mission, the companies that will succeed - the winners will be those who can capitalize on unprecedented volumes of information, to deploy services faster, to create new revenue streams sooner and respond more quickly to customer demands for information or services that can be delivered when and where and how an individual wants.
The demands on information, the demands of customers are only going to grow. After all, information is the currency of this digital age. Information is now the most valuable of your strategic and intellectual assets, but its value is directly proportional to your ability to turn that information into insight and revenue generating products and services.
As I said earlier, it is no longer about where the information lives. It's about putting information to work. It's about transforming data from passive to active, from static to dynamic, data to insight. And that means having an IT infrastructure that is equally active and dynamic, one that gives you the flexibility and the adaptability to act on information in real time, one that allows you to turn information and technology into a superior experience for your customers and into a competitive advantage.
Together, HP and Oracle are helping our customers adapt to the growing demands of this digital age. We are putting our combined strengths - our products, our services, our innovation, our people - behind a simple, but very powerful idea. And that is to make your information work for you and your customers. That is our commitment to you.
It is my great pleasure to have been able to spend a few minutes with you this morning and open this up. I hope you very much enjoy the rest of your conference, and please do stop by our exhibit and attend our breakouts.
Thank you very much.