As a result of a three-year IT transformation effort, HP has reduced its IT operating costs by approximately half; provided more reliable information for executives to make better business decisions; and, established a more simplified and dependable IT infrastructure that provides improved business continuity and supports the company's future growth. Starting in fiscal year 2009, the transformation will lower IT costs by more than $1 billion per year from fiscal year 2005 levels. Over this period, HP added more than $25 billion in revenue.
HP said its IT transformation focused on five major initiatives: next-generation global data centers, portfolio management, workforce effectiveness, building a world-class technology organization and a true enterprise data warehouse.
Some key points of the IT transformation project:
- Reduce spending on internal IT from approximately 4 percent of revenue in 2005 to less than 2 percent in 2009;
- Consolidate more than 85 internal IT legacy data centers globally to six next-generation data centers in three geographic locations equipped with new, standardized and automated technology. These data centers have 342,000 square feet of computing "white space" -- expandable to more than double that amount -- to accommodate growth, including acquisitions such as EDS;
- Consolidate more than 6,000 applications running the business to approximately 1,500 standardized applications;
- Reduce annual energy consumption in its data centers by 60 percent;
- Decrease the number of servers by 40 percent while increasing processing power by 250 percent, by utilizing HP virtualization and energy-efficiency technologies;
- Reduce networking costs by 50 percent while tripling bandwidth;
- Eliminate more than 700 data marts and create one enterprise data warehouse where employees are accessing consistent data to make business decisions.
