On March 10th, HP announced a new venture into the world of energy and sustainability management. In partnership with software providers Hara and C3, HP will begin offering clients a suite of services aimed at increasing business value, optimizing costs, managing risk, reducing waste, and increasing visibility from the perspective of resource management, including water and energy. It's a good step forward, but I'd like to see more.
Managing Resources Across the Enterprise
HP Energy and Sustainability Management is a services-led engagement with an enterprise-wide focus on coordination and collaboration of stakeholders from information technology, supply chain, facilities, and workforce to maximize the benefits of energy and sustainability management. Despite the fact that HP can point to its own achievements from a sustainability perspective, this offering doesn't yet carry a strong, comprehensive message of what HP can help its clients achieve. At this point, HP has not provided a concise description of the solutions framework, and it is unclear what each partner will bring to the table, or exactly how these vendors will collaborate.
What is clear is that HP aims to enter a rapidly growing market of software offerings for energy and sustainability management. By promoting an enterprise-wide solution, HP seems to understand the inherent challenges clients face when integrating sustainability and energy management programs across business units. The particular economic and operational constraints within functional groups can put decision makers at odds when defining the road map to meeting corporate energy and sustainability management goals. HP’s enterprise-wide approach, however, may help bridge the gap between conflicting business unit objectives and provide a collaborative approach that aligns all stakeholders with overarching corporate sustainability and energy management goals.
Moving Toward Smart Buildings - Competitors and Partners
We do see increasing interest from manufacturers (and companies of all types) in new approaches to energy management systems, which IDC defines as Smart Building solutions for the commercial real estate segment. At this time, HP's primary focus is the optimization of resources within commercial buildings and general real estate, not manufacturing production facilities. (You'll find more research on Smart Buildings through our Energy Insights colleagues; in Manufacturing Insights, we'll remain focused on the unique energy management challenges in the plant.)
Vendors entering this market range include building automation vendors like Johnson Controls, start-ups and niche vendors like HP’s partner Hara, and to other enterprise ICT heavyweights such as IBM, SAP, and Oracle, though each with different starting points and areas of focus.
Hara has been active in the sustainability market, with environmental and energy management software, and recently announced a deal with U.S. Bank to provide energy management software for over 2,000 sites. I've also written about Hara's work with manufacturers Hasbro and Diebold. C3, on the other hand, has remained in stealth mode with little information about its business strategy. Despite the buzz caused by its original investment from Tom Siebel, I'm quite skeptical.
Asking HP for Another Step Forward
Just a couple weeks ago, in a draft document that profiles HP and several other vendors, I wrote this:
On the sustainability front, HP continues to make progress, but it's much more about HP's own environmental footprint and horizontal Green IT (green IT assets and data centers), rather than IT for Green - helping manufacturers green their products and processes with IT. I've long seen sustainability as an opportunity for HP to help its customers in more than just the data center, given HP's firsthand experience with this challenge in the supply chain, procurement, cradle-to-cradle product lifecycles, and more.
Almost two years ago, I wrote in a sustainability services report, where the focus was deliberately not on Green IT:
Analyzing HP was a challenge because of HP's own sustainability maturity, the majority of revenue outside of services, and the ongoing integration of EDS. HP itself has significant leadership in sustainability, but much of the work still appears to be green IT or focused internally on its own processes, including the supply chain. For our purposes in manufacturing, we consider HP's leadership in its own supply chain as a sufficient reference of business-level expertise in sustainability. From a customer-facing perspective, there is some sustainability strategy–level work, but it's a relatively small percentage, and some of that work starts as green IT, such as intelligent building management, print infrastructure, document automation, and managed print services, before being elevated to IT for green. This next level could involve taking HP's own best practices to help its customers, including HP's supply chain expertise and Design for Environment principles. Another interesting offering with green potential is the company's telepresence product — Halo. On the EDS side, EDS generally offers a wide variety of services, with its three main service lines in applications, IT outsourcing, and business process outsourcing. As the EDS business is more integrated and expands, we expect HP to develop its ability to compete against the other service providers for more business-focused sustainability projects.
And HP continues to demonstrate improvements to its own environmental footprint. Just this week, HP announced that the energy reduction goals made by the company in 2009 have been met or exceeded more than nine months ahead of schedule.
With those thoughts in mind, my impressions of this HP announcement are mixed – I'm happy to see HP take this first step, but overall, the program is clearly a work in progress and not yet as sophisticated as I'd like to see. HP has wisely targeted the commercial energy management field as an emerging and fast-growing market. However, the company needs to keep moving forward and taking the next step by doing the following:
- Presenting a clearer articulation of what it can bring to the market
- Explaining how resources across HP (software, services, and hardware) will come together,
- And finally, delineating its areas of expertise, past successes, and its goals.