The Doppler Quarterly Special Edition 2019 | Page 93

By conventional measures, the cloud-first transformation Hewlett Packard Enterprise
(HPE) executed would have to be labeled a success. After all, we shrunk our data center
footprint from nearly 500 to just four, took $2 billion in costs out of the business, and
migrated 90 percent of our apps to the cloud.
But, as Arianna Huffington once said, the path to success is “not a straight line.” She
described it as “much more of a dance, and being open to possibilities,” and we can
relate to that. We had to do our share of dancing to move past obstacles we inadver-
tently put in our own path. We of course were open to all possibilities as we moved
through the process. But we didn’t take advantage of all the best practices at our dis-
posal – such as the ones HPE and Cloud Technology Partners (CTP) deploy today: cre-
ating a Cloud Business Office (CBO), or following a plan that connects the impacts of
specific events in a more holistic way.
Here’s a rundown of how we executed our cloud-first transformation, and the valuable
lessons we learned along the way.
Embarking on a Journey
In the beginning, we focused our plan on cutting costs and improving agility. We had too
many data centers – 85 large properties and more than 400 small sites (under 10,000
square feet) in 29 countries. We also had about 7,000 applications in our portfolio,
including more than 100 instances of SAP.
This was the result of 35 years of inadequately integrating acquisitions. When we
acquired a company, at least one data center came along with the deal. To keep peace
with the acquired company, HPE management told IT to leave them alone for three
years, and then go in and integrate the systems. Three years would go by, and the will
and the funding would not be there, so many of the integrations just never got done.
We arrived at a point where we were spending just north of $4 billion a year on IT –
about 4 percent of the old HP’s $115 billion in annual revenues. For years, that seemed
like a reasonable percentage. Companies we saw as our peers – Google, Twitter, Face-
book (which we could see from our offices in Palo Alto) – hovered around the 4 percent
mark. But they were different. When Google spends 4 percent on IT, it is using its IT bud-
get to build products. We were an IT company, but we were spending 4 percent on IT
just to manage our business. We should have been comparing ourselves to engineering
and manufacturing companies like IBM, Cisco and GE, which spend about 2 percent of
revenue on IT. So we had to put together a program to get down to 2 percent.
We did just that, going through a grueling exercise of consolidation, virtualization and
automation. We shrank from 465 data centers to six, saving about $200 million. Fewer
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