{"id":853,"date":"2016-06-19T14:17:00","date_gmt":"2016-06-19T14:17:00","guid":{"rendered":"http:\/\/localhost\/projects\/horsesforsources\/hpe-csc-digital-underbelly_061816\/"},"modified":"2016-06-19T14:17:00","modified_gmt":"2016-06-19T14:17:00","slug":"hpe-csc-digital-underbelly_061816","status":"publish","type":"post","link":"https:\/\/www.horsesforsources.com\/hpe-csc-digital-underbelly_061816\/","title":{"rendered":"Can HPE + CSC dominate the digital underbelly, or has that ship sailed?"},"content":{"rendered":"
\"Digital<\/a><\/p>\n

Just stare at that digital underbelly… there’s a lot of work needed down there!<\/p>\n<\/div>\n

When the news broke last month about the second largest IT services merger of all time (after the 2008 HP-EDS whopper), the reaction among the services cognoscenti was – and has continued to be – one of confusion. \u00a0Big services mergers have just not done very well over the years. HP\/EDS was a culture clash of immense proportions – and occurred right before the great recession, while other mergers, like Dell’s acquisition of Perot, has resulted in the old Perot business being flipped over to NTT Data at a significant loss, and the Xerox\/ACS merger has been shaken up and spun off\u00a0and needs a major reinvention under new CEO Ashok Vemuri to get the company back on track. \u00a0Meanwhile, Capgemini and IGATE are still figuring out the best pieces of each other to mesh together, while not taking their eye off the ball, during the services industries’ most cut-throat transition phase.<\/p>\n

We heard HPE CEO, Meg Whitman, excitedly address the firm\u2019s key clients and industry analysts at HP\u2019s recent Discover event in Las Vegas, with an obsessive focus on \u201cdigital transformation\u201d and the impending impact of \u201cdigital disruption\u201d. \u00a0However, the real opportunity for HPE isn\u2019t really in the design<\/em> of digital business models for clients, it\u2019s the enablement<\/em> of them \u2013 it\u2019s the provision of the agile \u201cdigital underbelly\u201d to make digital change really happen for enterprises.<\/p>\n

It’s easy to be cynical about legacy IT services, but there’s an awful lot of it to scrap over as enterprises are forced to fix their plumbing<\/span><\/p>\n

Digesting the merger of these two struggling services giants has resulted in more rumination than most, considering the timing, sheer scale, transitional uncertain market and motivation. This is not a time when most traditional service providers are looking to add more global delivery scale to already large foundations \u2013 most are trying to slim down their delivery armies and sales forces, choosing to focus on new and emerging areas for growth and getting more services delivered for less FTEs by taking better advantage of automation technologies, standard SaaS platforms and more affordable cloud provision.<\/p>\n

However, when you consider only $15 Billion is being spent on public cloud services (IaaS) this year and $ 1 trillion being spent on services tied to traditional services delivery, there is a huge amount of “legacy” IT and BPO business in play – for another decade and beyond – to enable the enterprise digital experience. Hence, the opportunity HfS sees for Newco, is to attack the IT and operations plumbing necessary to enable the fast-emerging Digital enterprise, and take on the likes of IBM, NTT\/Dell, Atos, Capgemini and the Indian-heritage majors.<\/p>\n

Why the Digital underbelly poses a massive opportunity for cost-effective agile IT infrastructure providers, such as the HPE+CSC Newco<\/span><\/p>\n

The onset of digital and emerging automation solutions, coupled with the dire need to access meaningful data in real-time, is forcing the back and middle to support the customer experience needs of the front. Our new study on achieving Intelligent Operations (see link<\/a>), which canvassed 371 major buyside enterprises, reveals two key dynamics that are unifying the front, middle and back offices:<\/p>\n