news HP has confirmed its global chief executive Meg Whitman has landed in Australia for a brief visit, in a move that comes as fallout from a bungle at key HP customer the Commonwealth Bank of Australia continues to make itself felt.
On Thursday last week, according to sources, a patch was issued by a HP unit in New Zealand using Microsoft’s System Center Configuration Manager (SCCM) remote deployment tool. It appears as if the patch was intended to be distributed to a small number of desktop PCs at HP customer the Commonwealth Bank. However, it was mistakenly applied to a much wider swathe of the bank’s desktop and server fleet than was intended.
Late last week, sources said that some 9,000 desktop PCs, hundreds of mid-range Windows servers (sources said as high as 490) and even iPads had been rendered unusable due to software corruption issues associated with the patch, with HP and CommBank’s internal team scrambling to restore systems. Subsequently, it was revealed that the issue had also taken down CommBank’s key customer service platform CommSee.
In the wake of the disaster — one of the worst corporate IT outages on record in Australia — Delimiter readers had speculated about the future of the bank’s outsourcing relationship with HP. HP, through its acquisition of EDS several years ago, is the bank’s master IT services provider in a $573 million deal which was expected to last from 2006 through 2012. It is not known whether CommBank has yet renewed its wide-ranging contract with HP or whether it has been put out to competitive tender. Several of Australia’s other major banks, Westpac and NAB, have strong relationships with HP rival IBM, while ANZ has recently been outsourcing hundreds of staff to Capgemini.
“Word has it (from an extremely well placed source) that HP has flown its most senior executives, including CEO Meg Whitman in from the US for damage control,” wrote a Delimiter reader yesterday in comments under an article about CommBank’s outage. “One can only assume that CBA may be looking for blood … and that blood could be cancellation of the impending $700mill HP contract extension!”
This morning, a HP spokesperson confirmed that Whitman was “currently in Australia for a brief scheduled visit”, in order to attend meetings with HP’s Asia-Pacific and Japan board of advisors, “a range of HP customers” and HP employees. But they did not provide any further information about Whitman’s visit, and did not respond directly to the question of whether Whitman was in Australia to help rectify the situation with CommBank.
One stakeholder organisation, the Finance Sector Union, has publicly linked CommBank’s problems to the issue of outsourcing IT services, rather than maintaining them in-house. “It is unclear whether the problems would have been avoided if the work had remained in-house but the problem underpins the FSU criticism of outsourcing where the bank loses direct control over end to end processes,” the union wrote, pointing out that CBA had recently announced its IT help desk facilities at Sydney Olympic Park would be outsourced to HP, resulting in 50 CBA jobs being lost.
HP, is believed to have allocated additional resources in an emergency effort to re-image the servers and desktop PCs from scratch with the bank’s standard operating environment and other platforms where appropriate, with the bank lodging a ‘P1′ highest priority incident notice with the company. Internally, some staff at HP were told to throw every resource possible at the situation. CommBank’s own backup and restore teams were also believed to be throwing resources at the issue wholesale last week and over the past few days.
A former leader of eBay and a management consultant with Bain, Whitman was appointed chief executive of HP in September 2011. It is unusual for a new chief executive of a major international technology vendor such as HP to visit Australia in the first year after being appointed, with usual protocol holding that other larger markets such as Europe, China, the US and the broader Asian region would receive priority. This visit is the first which Whitman is known to have conducted in Australia.
Whitman’s visit Down Under also comes as HP announced in May that it expected its massive global job cuts — which are expected to see some 27,000 employees exit the company — to affect all of its regions across the world, with the implication that Australia will not be left off the list of locations to receive retrenchment targets. It is currently unclear how many jobs are expected to be lost in Australia as a result of the cull.
So has Meg Whitman flown into Australia specifically to meet with CommBank over last week’s disaster? Right now, we don’t know. HP isn’t saying, and my attempts to get any information from CommBank at all on the issue over the past week have been met with generic bland corporate statements. But will CommBank be one of those “range of customers” which Whitman is meeting with? Absolutely it will. In fact, I would be surprised if Whitman hadn’t made it one of her first priorities after stepping off the plane in Australia, to give CommBank chief information officer Michael Harte a call.
I suspect that Whitman had a trip planned to Australia and the rest of the Asia-Pacific region at some point anyway, and that the CommBank outage may have proven the stimulus to simply move the timing of that trip forward a little. It would make sense, after all: the bank is no doubt a major customer for HP globally, a major contract worth hundreds of millions of dollars is up for renewal, and Michael Harte is not known as the kind of executive who would cut HP slack for an issue like this. I am sure he will be taking a tough approach with the outsourcer.