IT spend to focus on consolidation, says HP head

20 October 2010

HP Middle East says next year’s IT budgets flat on 2010

HP Middle East expects half of its enterprise business next year to be focused on companies consolidating their information technology (IT) systems to improve efficiencies and cut costs, with particular focus being put on how they run their internal data centres.

Although it expects IT budgets in 2011 to remain in line with 2010 levels, HP says there will be a big push towards virtualisation, as companies pull together disparate systems running on different servers.  The benefit for medium and large organisations is that if they have multiple data centres scattered across various locations or countries, these can be consolidated into one location, reducing the cost and complexity of managing their data and the amount of hardware they have to buy and maintain.

“Companies are starting to spend, and move on some projects that they had put on hold. The biggest spend [next year] will be on data centre consolidation and infrastructure conversions,” said Eyad Shihabi, Managing Director and Enterprise Business Lead HP Middle East.

This consolidation provides companies with the building blocks to move towards cloud computing – the idea of running systems over the network and adopting an Opex-style, pay as you go utility model to computing, where companies pay for the services they use.

The use of the cloud model is small currently, but Shihabi thinks there will be a small number of success stories in the coming 12 to 18 months, with broader uptake taking two to three years. 

‘What good is the cloud if you don’t know what to use it for? So in the next 12 -18 months, the focus will be on building application models such as software as a service. It will take three years before you see for instance [widespread] storage as a service.’ Industries expected to adopt cloud-based services first include telecoms, the financial sector and governments.

In 2009, HP’s turnover in Europe, Middle East and Africa was $53bn, with the Middle East accounting for a significant portion.

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