HP To Consolidate Former EDS Data Centers

In 2006, HP undertook an ambitious data center consolidation, migrating apps and equipments from more than 85 company-owned data centers into six newly-built facilities in Austin, Atlanta and Houston. Today the company announced another major data center consolidation, this time affecting HP Enterprise Services (formerly EDS), which it acquired in 2008.

Ann Livermore, Executive Vice President of Hewlett-Packard Enterprise Business, said the company expects to consolidate about 100 former EDS data centers into about 50 facilities, spending $1 billion and eliminating 9,000 jobs in the process. HP's announcement indicates that most of that $1 billion will be for severance, but some will go for infrastructure.

"Fully Automated" Data Centers
"HP will invest in fully automated, standardized, state-of-the-art commercial data centers built on its Converged Infrastructure and operated by its industry-leading management software," HP says in its announcement. "Leveraging its experience from its own IT transformation, HP will enable clients to migrate their applications to these modernized infrastructure platforms, allowing them to run their businesses faster and more efficiently."

Will HP build brand new, highly efficient facilities for the consolidation, as it did with its in-house effort? "HP will be consolidating data centers into existing facilities where applicable," said HP spokesperson Jane McMillian. "We have no additional details on the $1 billion in charges at this time."

With HP planning to offer end-to-end converged infrastructure, new facilities might work better than retrofits. But that's not simple with the former EDS clients, as Livermore indicated.

"You won't ever see the same order of magnitude as we're able to do inside HP because in some instances with our clients we have data centers that are dedicated to them that they want dedicated to them," she said. "We have certain clients who have geographic requirements for us for where they want data centers. And so you'll not see in a services business like we have with HP Enterprise Services the same opportunity to reduce to the same number we did internally for HP. But still this is a substantial opportunity for us and something that we think is a good opportunity for our clients as well as HP."