Transcript of a BriefingsDirect podcast with HP's Bill Veghte on changes in IT as the focus shifts to virtualization and the cloud from software conference in Washington, DC.

1. HP's Bill Veghte on Managing IT Complexity through
Converging Inflection Points
Transcript of a BriefingsDirect podcast with HP's Bill Veghte on changes in IT as the focus shifts
to virtualization and the cloud from software conference in Washington, DC.
Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Sponsor:
HP.
Dana Gardner: Hello, and welcome to a special BriefingsDirect podcast series, coming to you
from the HP Software Universe 2010 Conference in Washington D.C. We're here
the week of June 14, 2010, to explore some major enterprise software and
solutions trends and innovations making news across HP’s ecosystem of
customers, partners, and developers.
I'm Dana Gardner, Principal Analyst at Interarbor Solutions and I'll be your host
throughout this series of HP sponsored Software Universe Live discussions.
Please join me now in welcoming Bill Veghte. He is the Executive Vice President of HP
Software & Solutions Group. Welcome to BriefingsDirect, Bill.
Bill Veghte: Great. Thanks, Dana.
Gardner: You know, we've heard a lot here, Bill, about how tough things are. We're used to
hearing tough economy stories, but now we're hearing about tough management and complexity
stories. We're used to hearing about inflection points. Maybe you could describe for me what you
see right now in the IT business, as an inflection point or points, and how that relates or
compares to some of the past game-changing times in the history of IT.
Veghte: Dana, I spend a lot of time out there with CIOs and IT professionals, and we're at two
remarkable inflection points in our industry.
The first is in terms of how businesses are delivering IT, and that's on three dimensions. The first
is virtualization. There's a lot of not only conversation, but moving workloads of
application services to a virtualized environment. Look at the numbers. People
say that over 25 percent of x86 server workloads are now virtualized, and that
number looks like it's going to accelerate over the next couple of years.
Correspondingly, there's a heck of a lot of conversation around cloud. People
wrap a lot up in that word, but many of the customers tell me they think of it as
just another way of delivering experiences to their end customers. And, in cloud there's platform,
applications, and private versus public, but it's another choice point for CIOs and IT folks.

2. The final piece in terms of IT delivery is that there are a heck of a lot of mobile devices, over a
billion mobile devices, accessing the Internet. With the advent of smartphones, a very rich
viewing and consuming medium, people expect to have that information.
Those things are incredible tools and opportunities, whether you characterize it in a balance
sheet, and moving from capital expenditure to operating expense, or whether you characterize it
in anytime/anywhere information on your mobile device. But with that, it does bring more choice
points and more complexity.
Breadth and depth
The other inflection point that I'd highlight, Dana, is the breadth and depth of data that’s being
generated. You and I both know that digital information is doubling globally
every 12-18 months. In the midst of all the digital photos or whatever, sometimes
people lose track of the fact that 85 percent of that data resides in businesses. And
the fastest growing part of that is in unstructured data.
Now, the most precious resource is your ability to take that data and translate it
into actionable information. The companies and businesses that are able to do that have a real
competitive advantage.
You can put that in the context of a specific business operation. If you're a pharmaceutical, how
quickly can you bring a drug to market? You can characterize that in a financial services
organization. Do you have better, quicker data and market movements?
You can characterize it in an IT . There's an enormous amount of IT information and data, but
how do I parse it out to the things that are going to represent a service desk ticket, and can I
automate that so I am not putting people in the middle.
When I think about it in a historic context, I'd highlight a couple of things. One is that we're
going through the biggest change in IT delivery since client-server, because of the three delivery
vehicle changes that I highlighted. That, in turn, is going to generate a very significant refresh in
applications and services.
You don't have the time deadline in the same way that we did with Y2K, but the CIOs and IT and
apps folks that I know, as the economy is recovering, are looking at their application and service
portfolios and saying, "How am I going to refresh this to take advantage of these new and
different delivery vehicles?"
Gardner: How does that relate to HP? You're relatively new to HP. You had a long and
distinguished career at Microsoft, and you've been here for a little over a month or so. How do
these inflection points and the opportunity that you perceive for HP come together? Perhaps you
could fill in on what attracted you to HP.

3. Veghte: Sure, Dana. As I looked across the marketplace and at this inflection point, there are a
couple of things that attracted me to HP. One, I think HP is uniquely positioned in the
marketplace, because it has a great portfolio as a company, across not only services, but also
hardware and software.
On the software side, there is a remarkable portfolio of assets within HP, across application
development and quality to the operation side. Yet, given the complexity that I just characterized,
there's a real opportunity to bring more of a portfolio approach to delivering those solutions to
customers.
Doing remarkable things
The final piece that I would highlight is that I worked for many years with HP as a partner.
Whether it be Todd Bradley, who I worked with around the Windows business, or Mark, as the
executive sponsor for the HP Partnership, when I was on the Microsoft side, they're a great group
of people doing some remarkable things.
If you look at what that executive leadership team has done over the last couple of years with and
for HP customers, it’s exciting to think what we can do over the next five or six years.
Gardner: Speaking of HP customers, who are here at Software Universe. There are thousands of
what we can call hardcore HP folks. What are they telling you? What have you learned? What
has surprised you in your interactions in the last few days?
Veghte: It's been a great Software Universe for us. Compared with years past, there is a degree
of energy and optimism in customers that's very invigorating. I've been in back to back to back
meetings. You walk in, and they are excited about the innovations that we're bringing into
market.
We've had a variety of very exciting announcements, such as Business Service Management 9.0.
Some of the announcements were around the ability to automate how you take a production
environment and apply it into a text script.
The areas that customers are highlighting are: "You've got a great portfolio. You're heading in the
right direction. Keep that pedal down. Take advantage of the fact that you've got not only
fantastic best of breed capabilities in individual areas, but that you've got this breadth of
offerings. I'm going to evaluate you against my entire solution set."
It starts with the strategy. In fact, there was a great customer meeting this morning. The customer
said, "Look, I use you in a bunch of different ways, and I think you've got a great product. Now,
what I need you to do is step up and make sure that from strategy, to application, to operation
you're delivering that cohesion for me. I see good steps, but I want to see you keep doing it."
I think that they're constructively challenging us to make sure that we have a set of tools that are
effectively scaling into the most complex operating environments in IT in the world, and making

4. sure that, as the additional complexity in delivery vehicles that I just highlighted come online,
that we continue to make sure that we are scaling effectively to deliver for the customers.
For example, at Software Universe 2010, in the Service Manager case we announced, not only
will we be providing a near real-time dynamic view of IT, but we are doing it across virtualized
and cloud implementations. I just came from the session, where we were demoing to 3,500
people the ability to display that information on a smartphone across a variety of platforms --
from BlackBerry to iPhone to a Sprint device.
Gardner: So, it seems like complexity is the common foe here, when we talk about virtualized
workloads. We have a variety of sourcing options -- on premises, off premises cloud, private,
colo, hosting, and also complexity, as you point out, in the number of endpoints or different
devices.
Perhaps customers are wondering how to stay up with this accelerating pace of complexity. How
could we think about the role of IT? What does IT need to be thinking of itself? How should it
perceive of itself in the next few years, vis-à-vis this common sense of building complexity?
Continuing to evolve
Veghte: Well, Dana, the thing I'd go back to is those two inflection points that I highlighted,
because I think they're very important, when we think about the fact that the role of IT continues
to evolve.
First, as an IT organization, I have more choices in terms of how I am delivering my application
service for and with business. I increasingly become a service broker, because I'm looking across
my applications and services and deciding with the business what’s the most cost effective and
best way of delivering those experiences for the businesses.
Second is, and we've talked about this as an industry for a long time, the continuing blending of
business and IT. A customer from a Fortune 5 company was in a meeting with me earlier this
week. He's been in the industry for 25 years, a very sharp guy, in a deep partnership with HP.
He said that this year there are more people from business operations coming to Software
Universe than there are from IT operations. He said, the reality is that whether you talk about it
in the context of PPM or application and service requirements, those two functions are
intermingling. Given the software footprint and portfolio we have, it’s a wonderful opportunity,
but that continues to accelerate.
The final piece that I would highlight is not a change, but a continuity. Even as IT has a broader
set of choices, and the relationship with the businesses continue to intertwine more and more,
they're not off the hook, when it comes to security or compliance or the availability and
performance of the solutions that they are responsible for supporting and delivering for the
business. So, it’s important to factor that even as we look ahead.

5. Gardner: Seeing this relationship between business and IT shift and change, dealing with
complexity across variety of different levels, looking for that right analysis and information in
that sea of data, where do you think the management, the topic of management goes?
Are we talking about an expanded definition of management or the role of IT? If you can manage
IT, does that mean you can better manage the business? Is there a coming together of managing
IT and managing a business?
Veghte: This has been illustrated time and time again. The most successful businesses have
figured out how to constructively apply IT to run a business.
IT tools are at such a maturity and the experiences of IT with the customer experience are so
intermingled. The CIO at Delta Air Lines was talking yesterday about her utilization of HP
technologies and some of the remarkable projects that she's been through. You listen to that talk
and you realize that the reservation system, the way I check in, and my experience with Delta Air
Lines is commingled with what you and I would characterize as the IT experience.
It was a remarkable story about that interrelationship with the business, as they were not only
dealing with the broad adversity of the business climate, but also were trying to merge with
Northwest Airlines.
Gardner: Perhaps we could go as far as to say that for many business over time, IT is the
business.
Veghte: Dana, the trick in that is that IT means many different things to many people. The thing
I would highlight is that IT has the ability to continue to outsource a variety of baseline
capabilities. With that outsourcing capability, as an industry, IT providers, are going to be able to
provide more and more. And that gives IT the ability to move up the stack in terms of higher
value-add applications and services, and then the business runs through and with IT.
Gardner: So, maybe we could expand it to say, managing the services through IT is the business
or some combination of the service model.
Veghte: You're a smarter analyst than I am. All I know is that the intersection between the two
and the resulting customer experience continues to accelerate. We look forward, as part of HP
Software & Solutions, to playing a great role in helping customers deliver those solutions and
those experiences.
Gardner: Well, great. Thank you. I've been talking with Bill Veghte. He's the Executive Vice
President of HP Software & Solutions. Thank you so much, Bill.
Veghte: Great. Thank you, Dana.
Gardner: And, we want to thank our audience for joining us for this special BriefingsDirect
podcast, coming to you from the HP Software Universe 2010 Conference in Washington. Look

6. for other podcasts from this HP event on the hp.com website, as well as via the BriefingsDirect
Network.
I'm Dana Gardner, Principal Analyst at Interarbor Solutions, your host for this series of Software
Universe Live discussions. Thanks again for listening, and come back next time.
Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Sponsor:
HP.
Transcript of a BriefingsDirect podcast with HP's Bill Veghte on changes in IT as the focus shifts
to virtualization and the cloud from software conference in Washington, DC. Copyright
Interarbor Solutions, LLC, 2005-2010. All rights reserved.
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