HP at the "Crossroads" Between Telecom and Entertainment

May 31, 2006

HP is announcing new digital-content initiatives today (31 May 2006), positioning itself at the "crossroads" of the converging businesses of telecom and entertainment. The company is renaming its network and service provider business as HP Communications, Media & Entertainment (CME), increasing its "investment in solutions that address digital content management and distribution," hiring a new executive to head up the CME division, and increasing its sales coverage in connection with the new efforts.

Joy King, director of worldwide marketing for CME, tells TMCnet that HP sees telecommunications and entertainment turning into "a converged industry rather than two independent industries trying to work together." The explosion of digital content, she says, creates "the opportunity to deliver very personalized, very content-rich services to consumers and professionals (or 'prosumers'!) across a variety of networks -- fixed line and wireless, broadband, etc. -- to a huge variety of devices -- digital TVs for home entertainment, PCs and notebooks for office and web, cell phones and handhelds for mobile, and gaming devices, etc."

In today's announcement, HP says service providers are rapidly moving out of the voice business in a "fast-moving market" that requires them to "bring to market thousands of personalized services -- voice, data and multimedia -- to stay competitive." This has put service providers in search of content. From the entertainment side, digital technology is transforming the process of creating and distributing content and the way in which it is consumed.

HP says the two industries together make up about 10 percent of its revenue, or $9 billion, and that the company is in a unique position to serve telecom and entertainment as they converge.

Its telecom and IT experience give it the capability to deliver network infrastructure, service creation, delivery and management framework, migration to IMS (IP Multimedia Subsystem), and operations and billing systems. As an example, King points to HP's servers, which are "proven in the IT world" but have now been "enhanced to carrier-grade standard to meet the special needs of the telecom industry."

On the entertainment side, HP says it can provide server platforms for creating content, workflow environments for management and distribution of digital content, and media storage. "The HP Media Storage offering," King tells TMCnet, "is based on core HP storage arrays for IT data centers, but is significantly enhanced to meet the special needs of the media and entertainment industry -- i.e., rapid retrieval of enormous video files."

The telecom and entertainment roads converge at the devices consumers use to access content -- wireless portables, handhelds, TVs and projectors and other devices, and HP operates in this space as well.