Current datacentre numbers and infrastructures are unsustainable said HP, as it rolled out a range of services, hardware and software at its [email protected] conference in Barcelona.

It said it was building up its consultancy business in datacentre consolidation, virtualisation and systems management software in part based on last month's acquisition of facilities consultancy EYP.

The firm, which is cutting 86 datacentres of its own down to six, said it had brought in EYP to help design its consolidation efforts before deciding to buy the company and put it to work.

The current economic climate meant its hosted infrastructure efforts, it said, were addressing customer needs to move datacentre operations from a capital expenditure to an operational expenditure basis. HP is building at least two datacentres to offer standard hardware configurations hosting SAP and Exchange applications under the banner of Adaptive Infrastructure as a Service.

The firm said its strategy was backed by market research which found that CIOs thought their datacentres were inefficient, inflexible, would rapidly run out of capacity and only offered "short term solutions".

Francesco Serafini, vice president and MD of HP EMEA, said: "Sustainability in the long term is the only option for datacentre design."

While accepting that its customers would not be interested in wholesale decommissioning datacentres the firm claimed that everything from process automation to drive out downtime caused by human error to floor space to energy use were pressing matters. Customers would start by shifting non critical applications to either hosted or new architectures and it would use RFID to assess server sprawl before designing new datacentre set ups it said.

On the hardware front HP announced an eight socket 7U AMD quad core Opteron-based Proliant server, the DL785 G5, saying it was moving back into the eight-socket market.

The server is scheduled to ship in May and be compatible with virtualisation technology such as VMware ESX, Oracle VM and Microsoft Virtual Server, while supporting the Windows, Linux and Solaris operating systems.

HP splits the market along business critical and industry standard lines running AMD on its Proliants and Intel's Itanium on its higher end Integrity servers. Ruud Vrolijk, vice president of business critical system for HP EMEA, said: "Naturally, industry standard servers will move up the value chain and overlap with HP's Integrity server business - 80 percent of which is Itanium-based. There is a decline in HP9000 Alpha business, which will be phased out from the end of 2008, and we expect this will be taken up by the Integrity business."

Anne Livermore, executive vice president of the Technology Solutions Group said she did not expect HP's server sales to be adversely affected by the adoption of virtualisation because "it was not the only trend out there". The transition to blade servers was already happening, she said, and "the content explosion would drive server, storage and software investment".