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Sun 29 Jun 2008 04:00 AM

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Ten minutes with… Francesco Serafini

Francesco Serafini, senior vice president and general manager for HP's Technology Solutions Group in EMEA talks strategy.

Francesco Serafini, senior vice president and general manager for HP's Technology Solutions Group in EMEA talks strategy.

What are HP's plans to stay ahead in EMEA and the Middle East in particular - do you have an enterprise-specific strategy?

Francesco Serafini: In the Middle East, we made an acquisition ust a few months ago to expand our competency services, so now we are probably the biggest IT company in Saudi Arabia and the rest of the Middle East.

In terms of overall business we are also very large - so we will continue to invest and the reason for that is that we believe there is a lot of opportunity.

If you look, for example, at the standard type of industry which we focus on in other parts of the world like telecoms and banking, there is a lot of investment going on today - particularly in government infrastructure. More specifically in the Middle East, there has been tremendous development in two industry types.

One is logistics and transportation - there is a lot of this going on in Dubai with Dubai World, and it's also now starting to be very big in Saudi.

Then you look at the approach of what we can call the ‘new city' both in Saudi and the Emirates.

They have different objectives but if you think about it, the request for IT connected to that is tremendous - not only for datacentres but including PCs, appliances or how to manage the buildings and the environment. This is why we are very focused on this geographic area.

Will HP's new push for datacentre consolidation affect its Middle East strategy?

This is my personal view at the moment but when you talk about these new cities coming up and look at the development, what Saudi Arabia is trying to achieve is different from that of the Emirates.

If you look to Saudi development cities, they will need datacentres to manage a combination of enterprise development, their factories, logistics and so on. Take Dubai World - they have a huge need for datacentres.

You need to put this into perspective - it's not tomorrow morning. In the next two or three years, you will see a lot of development.

How much does the Middle East enterprise market contribute to HP's global bottom line?

We don't disclose the revenues so the bottom line will be more difficult. What I can say is that if you take EMEA and you position it in the emerging market geography, this area is strongly contributing to overall growth.

We give this data worldwide to be about 25% to 30%. What I expect is that the contribution coming from the Middle East in the coming years will be very large.

However, you need to understand this growth, which has been measured to be at least three or four times more than we have in Western Europe. If you continue to have this growth, the next step will be that the contribution to the total business will go up.

How are enterprises developing in the Middle East as opposed to Western markets - are they evolving on the same lines?

There are three dimensions. First, if you look at enterprises around the world, many are moving investment into emerging markets.

You see a lot of investment in the Middle East, Eastern Europe and Africa coming from Europe, the US or from Asia - China and India are very active in the southern part of the world such as Latin America, the Middle East and Africa.

The other dimension is that companies that work in this geography do two things. They invest in themselves to be competitive and attract investment, but I have also observed that they have started moving outside their geography and begun acquiring other companies or making business in a different geography.Another point is that much of the infrastructure has been built up in the last few years. You can find a lot of state-of-the-art environments in many industries and also in the government infrastructure.

Previously there was a lower percentage of private investment, but now there is a tremendous opportunity to attract investment.

What are some of the key challenges of emerging markets like the Middle East?

I will put forward one single point, which is a critical one - how do we develop skills and competence locally? Take the Middle East as an example - with the abundance of oil, I don't believe that investment is the issue. The key point is how you manage this development with the local people. I think development skills and local skills are critical elements.

How does HP plan to support the growth of skills and training in the region?

We have plans to work with several universities around EMEA and also specifically in the Middle East. I believe there is an opportunity for us to contribute to the development of skills.

For sure, there are also large government programs around that, but we can contribute in terms of the skills and capability which might be present in some of these universities for some specific area of training.

Another point is that we try to increase the hiring from the new graduates. This is in Europe, but also specific to the emerging market for two reasons - one, to bring people in to develop new management - and second, because this is also the next level when you have more business going on.

A number of vendors have established divisions dedicated to emerging markets - is HP looking at a similar approach?

We are structured around three regions - America, Asia and EMEA. If you look over this region, emerging markets are embedded in these regions. For America, Latin America is growing, in Europe it's Eastern Europe and the Middle East and Africa. If you look at Asia, it's China, India and south-east Asia.

Other companies have decided to organise all the emerging markets as a structure. We don't think in this way at the moment but what we are doing is looking at different dynamics to develop the country.

We don't expect the same type of investment in emerging markets as in maturing markets and we know that we need to reposition and move much more of our investment into this geography.

People in the market talk about BRIC - Brazil, Russia, India and China - we try to think: "What is the next BRIC?" We have started to think about what is the strategy for the next four to five years in this geography.

The Atos connectionHP completed the acquisition of Bahrain-based systems integrator Atos Origin Middle East (AOME) in November last year. The purchase of AOME augments HP's regional SAP deployment capabilities, as well as extending its reach into the lucrative oil and gas sector.

One of the largest systems integrators in the Middle East, AOME employs close to 500 people in the region in offices spanning Saudi Arabia, Bahrain, the UAE, Qatar and Libya.

The company operates primarily in the oil and gas, telecom and security sectors, with some of the biggest enterprises in the region in its portfolio, including Saudi Aramco, Qatar's e-government and Emirates Airlines.

Post-acquisition, HP intends to phase out the AOME brand as the company becomes further integrated into its Middle East service operations.

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