As the IT industry changes to keep pace with convergence and the rise of emerging markets, vendors like HP have to stay one step ahead of the curve to remain competitive. At HP, the job of directing that effort falls to Shane Robison, the company's executive vice president and chief strategy and technology officer, who is responsible for overseeing the company's annual US$3.5 billion research and development (R&D) budget.
Robison discusses how different trends, such as convergence and the rising importance of China and India, have affected HP's R&D strategy.
Q: How has the convergence between telecommunications and computing applications in recent years affected HP's R&D strategy? A: We've been involved in convergence for quite a while. If you look at the work we do with our open-call platform and managing calls, managing SMS infrastructure, and then as we bring that together with a lot of the new handheld devices that have the most sophisticated integrated communication capabilities, this is something that has been driving a lot of our R&D for some time. All of our platforms are IPv6 capable, everything from the handhelds and PCs to the servers. It's an exciting opportunity. It's an exploding growth area and we're right in the middle of it and have been for some time.
Q: Discussions about convergence usually seem to be framed with the consumer or end user in mind. How has enterprise technology evolved to support these applications? A: People tend to think of convergence from the perspective of the devices that they touch and feel. That's the point of reference that most people have. What they don't think about is all of the infrastructure on the back end that's supporting this experience that they're having using this device. There's a lot of sophisticated server technology, massive storage technology that's required to serve up a lot of these interactive services. You've got to have good interconnection capabilities, whether its wired or wireless. This is really a systems problem and not a device problem -- or opportunity.
It changes the way you think about it when you get into the implementation of these next-generation services. One of the things that we've been doing for the last couple of years is an end-to-end digital production pipeline called the Digital Media Platform, which we've worked on with the content providers -- the various studios like Warner Brothers, DreamWorks, Disney and Sony Pictures, they're all using these types of platforms for everything from ingestion to providing digital vault capabilities which allow people to do everything from film and media restoration to digital rights management to sizing and resizing, so that you can make content available on a wide variety of devices.
All of that is automation on the back end that the user doesn't see. They would know if it wasn't there, but hopefully they don't know it's there.
Q: IDGNS: With contract manufacturers in Taiwan and elsewhere doing more of their own R&D than ever before, how does this affect HP's own R&D efforts? Are their areas of R&D that you now leave in the hands of your manufacturing partners, while HP pushes up the value chain into more advanced technologies? A: Our R&D strategy has been pretty consistent for a while. You can describe it pretty much like you just did, but the way I like to describe it is we're developing our products and services using industry-standard building blocks, which allow us to take advantage of economies of scale and really leverage our procurement strength. What we're doing is focusing our R&D efforts for the most part on software and systems-level differentiation that gives us an advantage in the marketplace. If you look at the R&D spending across the company, most of our R&D is software. And I'm talking about software at all levels, not just the software business, but software in every part of our business. Software that makes our products easier to use, that makes our products easier to manage, and provides innovative and interesting new services, like our Snapfish service.
Where we differentiate is at the systems level of design. You mentioned the OEMs, they definitely do manufacturing for us and they help us with a lot of the engineering, but the design is still something that HP primarily does.
Q: What role are countries like China and India playing within HP's R&D organisation? A: First of all, how they fit into the business picture is that they are big growth opportunities. I just arrived from India, where we were at an internal technology conference in Bangalore. In June, I was in China for a couple of weeks, visiting our labs and our customers there. These are just really high-growth opportunities for us and in many cases they have newer and more sophisticated communications infrastructure, which allows us to really deliver the best experience to the user. Their capabilities are beyond what we have in many parts of the U.S.
People think of these countries and regions as emerging markets. To some extent that's true but we think of it more of a growth opportunity. For example, in India you have a lot of very sophisticated people and they want to use technology in every aspect of their lives. It's a big, open market for us.
Q: How does that affect HP's R&D strategy? A: Let me give you an example. India is so big and complicated, there is no one-size-fits-all answer here. We're going to take our latest and greatest products and deliver them into the market where the market is ready to receive them, in the big cities and the industrialised areas of the country. A lot of the very best stuff we have can be delivered into those markets. In other parts of the country, we're going to do design for the country in the country. We've done that in India. We've released PC products that were designed in Bangalore for the Indian markets to either hit price points or features and functionality that were required because of the unique nature of certain parts of that geography, the demographics there.
It does change our R&D strategy slightly, in that we'll have a broader set of product offerings, because we'll need to have product offerings that are very leading edge and we'll also need to have offerings that meet requirements of cost or other factors. Some of this is going to be R&D innovation and some of this is going to be business model innovation. One of the things we can do is give people access to PCs through other business models, such as pay-per-use, in situations where they can't afford to go out and buy a PC. We're going to do all of that.
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