HP CEO Mark Hurd addressed the analysts this morning in his usual engaging way. He’s not messianic, just very intelligent and obviously practical. He may be the best CEO presenter in IT after Steve Jobs and, in a pleasant contrast to Steve Jobs, his theme to analysts is the dynamics of the HP business rather than some new product or other.

Apropos of which, Hurd mentioned that HP has had a comprehensive analysis of the HP brand carried out, which pointed out its strengths and weaknesses. HP is the 12th most respected brand in the world, whereas Apple is, of course, number one. Hurd remarked, amusingly, that “HP is the brand you want to marry, but Apple is the brand you want to date”.

HP in the Round

But let’s cut to the chase and highlight what Mark Hurd has to be proud of. He referred to quite a few things, of course, but that’s inevitable given that HP is actually the largest IT company in the world with revenues above one hundred billion - bigger than IBM by several billion. The problem with being a company that size - and it’s a problem IBM has struggled with for years, is that growing either revenues or profit is excruciatingly difficult. To grow revenues by 1% say in a year, you have to grow a $1billion business in a year - which is difficult to achieve by organic growth, especially if your portfolio of businesses includes some that are in decline.

So companies the size of HP tend to grow by acquisition, and HP has made several in the past year including PolyServe (storage), Neoware (thin clients) and Opsware (datacenter automation). The acquisition of Opsware was a coup, as it was rumored that VMware was about to pounce on the company and HP got there first. When coupled with the software assets HP acquired with Mercury, Opsware broadens the credibility of HP’s software portfolio considerably.

HP’s IT Makeover

A story that’s worth telling and which Mark Hurd is not at all shy about telling is that HP has been cutting its internal IT costs back in a dramatic way. You could call it consolidation, but actually it could be better described as strategic IT restructuring. It has involved the establishment of three very large data centers in Austin, Texas, Houston, Texas and Atlanta, Georgia providing bullet-proof disaster recovery, the best power management that HP can provide (and it claims to lead the field in this) and the consolidation of thousands of systems, including a complete redo of data warehouse capabilities, using HP’s own NeoView “instant data warehouse” technology (about which I’ll write a separate post - because I find it impressive).

The upshot is that the three year project has reduced the ratio of HP’s operating expense to revenue down by almost 2 percent. With a company the size 0f HP, that is no mean feat - in fact it is an extraordinary achievement - and it is also something that global companies of all kinds must envy.

Hence, it is the poster child for HP’s data center services.