LAS VEGAS Hewlett-Packard (HP) today unveiled its new HP Financial Planning and Analysis (FP&A) solutions, aimed at recession-beleaguered IT executives who need to cut costs, prepare for a service-based future, and run their departments like a business all at the same time.

FP&A is part of HP's expanding IT Financial Management (ITFM) portfolio designed to help chief information officers (CIOs) and IT managers create comprehensive financial transparency, optimize costs deeply but prudently, and newly demonstrate the business value of IT services.

In a related announcement here at the HP Software Universe conference this week, HP unveiled enhancements to its project and portfolio management (PPM) solution for planning and organizing IT investments.

HP also opened its related Tech Forum conference here this week. For the second year in a row, BriefingsDirect will cover the HP Software Universe 2009 conference through a series of podcasts, blogs, transcripts and Twitter entries. [Disclosure: HP is sponsor of BriefingsDirect podcasts.]

Follow the HP Software Universe 2009 conference on Twitter by searching on #HPSU09.

HP Project and Portfolio Management (PPM) Center 8.0 arrives as a key component in ITFM, providing integrated capabilities for IT portfolio investment management, global resource efficiencies and IT financial transparency.

PPM popularity is on the rise as organizations align planned business investments with IT project portfolios, said Daniel Stang, principal research analyst at Gartner, in a release.

Analysts in addition to myself are hearing consistently from IT executives that cost-optimization, cost-containment, and cost-reduction initiatives are the top priorities being driven from the business side onto IT.

The business leaders are demanding a clear understanding of all IT costs and benefits as the global recession lingers, if no longer still steeply deepening. HP's enhanced IT planning and analysis solutions are designed to help IT executives reduce costs without jeopardizing IT's ability to support future growth when it's called for.

The recession therefore accelerates the need to reduce total IT cost through identification and elimination of wasteful operations and practices. But at the same time, IT departments need to better define and implement streamlined processes for operations and to show the near and far business value of any new projects.

As part of the opening keynote address here today, Andy Isherwood, Vice President and General Manager of HP Software and Solutions, said the recession compels better management of IT. CIOs need to reduce costs, yes, but they should do so without jeopardizing future growth.

Consolidating IT cut costs and saves energy by focusing on the operational inefficiencies up front. It's about getting down and dirty, not pie in the sky solutions, said Isherwood.

Along with consolidation, IT leaders can increasingly automate and virtualize infrastructure and data centers. Combined with greater financial management, IT performance analytics, and IT resources optimization, enterprises can cut their IT operations bills while setting the stage for the new phases of advancement.

And those new benefits, said Isherwood, include using flexible sourcing, from on-house premises data centers to outsourcers like HP's EDS, as well as clouds, both on or via off premises partners like Amazon Web Services. As Ann Livermore of HP said yesterday: Everything as a service.

HP is already preparing to better manage and govern the cloud transitions with its Cloud Assure, which joins IT financial management, IT performance analytics, resource management as next major focuses for the HP Software and Solutions group.

To sum up, Isherwood said that HP's major solutions drives are around IT Management Software, Information Management Software, BI Solutions, and Communications and Media Solutions.

HP expects that after a 12-month period of operational optimization initiatives that CIOs will also seek more transformative IT functional delivery improvements, including such next-generation data center bulwarks as consolidation, automation, and virtualization.

Today's pressing IT management and architecture decisions, then, need to gain from better financial management tools, proffer IT performance analytics, and exploit IT resources optimization techniques for both near- and long-term benefits.

These financial performance indicator insights and disciplines for IT will also place CIOs in a better position to look at and pursue future flexible and cost-reducing sourcing options. Those are sure to include modernizing in-house legacy deployments, outsourcing to providers such as HP's EDS, and exploring a variety of burgeoning third-party cloud offerings (on premises, off premises, or managed hybrids).

Knowing the true costs and benefits of complex and often sprawling IT portfolios quickly helps improve the financial performance, while setting up the ability to meaningfully compare and contrast current with future IT deployment scenarios. Who knows if cloud computing will save money if we don't know the true costs of all-on-premises approaches?

Gaining real-time visibility into dynamic IT cost structures provides a powerful tool for reducing cost, while also maintaining and improving overall performance. Holistic visibility across an entire IT portfolio also develops the visual analytics that can help better probe for cost improvements and uncover waste.

This is where the HP planning, analysis and financial management solution comes to the rescue in terms of value, optimization priorities, and future planning comparisons.

The HP Financial Planning and Analysis product announced here today is designed to help organizations understand costs from a service-based perspective. It provides a common extract transform load (ETL) capability that can pull information from data sources, including HP PPM and asset management products as well as non-HP data sources.

Cost Explorer, a key component of FP&A, provides business intelligence (BI) capability for visualizing data that is applied to IT costs. Users are able to see data displays color-coded to help identify different dimensions and variants in costs.

HP FP&A can be run as a stand-alone or in conjunction with other HP software products such as HP Project Portfolio Management Center, HP Asset Manager and HP Configuration Management System as well as the newly enhanced version of HP Project Portfolio Management (PPM) Center 8.0.

Along with the software products, HP is also offering consulting services based on best practices, including:

• Strategy and Advisory Services to help synthesize organizational requirements, data, process and technical gaps for developing detailed implementation roadmaps.

• Implementation Services to provide BI services for strategic decision making including forecasting budgetary needs, quantifying the value of IT services delivered to the business, improving cost efficiency, and aligning IT resources with business needs.

• Process Consulting and Solution Implementation Services based on the HP Service Management Reference Model help in deploying HP ITFM and HP PPM to get improved business results.

• Best practices for Configuration Management Systems help accelerate deployment and provide a use model for customers to identify IT assets and relate them to the costs of the services delivered to the business.

Key enhancements to HP PPM Center 8.0 include:

• IT portfolio investment management for improved alignment between IT and business with cash flow analysis that supports business reviews with actionable, real-time information.

• HP PPM Center Mobility Access for governing IT expenditures through secure and automated checkpoints from mobile devices, which send email notifications and workflow actions to cell phones and PDAs.

• Global resource efficiencies for managing human resources with reports and notifications in the recipient's language.

• Additional IT financial transparency and controls for decision support with a comprehensive financial summary that aggregates IT investment data and related analyses.

• HP Universal Configuration Management Database (UCMDB) integration with HP PPM Center 8.0 provides advanced search capabilities for business and technical users.

• HP Service Manager integration offers a single IT services access point, so users can access services by creating an HP PPM Center proposal from an HP Service Manager catalog item via Web services.

What's more, HP PPM is now available in a Software-as-a-Service (SaaS)-delivered solution that offers accelerated deployment. Expect a lot more from me on this subject, via podcasts and interviews with the key leaders.

HP is also offering new Software Professional Services for HP PPM 8.0, including:

• Solution Consulting Services for PPM 8.0 providing design and implementation consulting to help customers reduce IT costs by automating enterprise-wide portfolio management via services.

• Fast Track Deployment and Upgrades to help speed deployment of the new software.

• Process Consulting Services to help customer make use of best practices guides for industry standards. HP delivers standardized processes based on HP and industry best practices such as Information Technology Infrastructure Library (ITIL) v3, COBIT and ISO

BriefingsDirect contributor Rich Seeley provided research and editorial assistance on this post. He can be reached at RichSeeley@aol.com.

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As big banks scramble to form rescue plans for bond insurers, a hedge fund manger is trying to send the ambulances away.

Bill Ackman, whose Pershing Square Capital Management has been betting on a collapse of the bond insurers for several years, has written to regulators, urging them not to support these efforts.

In a letter to Federal Reserve and Treasury officials obtained by Portfolio.com, Ackman criticizes the bank bailout efforts that have been prompted by regulators, saying that this strategy "appears to be aimed at propping up insolvent and falsely rated entities so that banks can defer judgment day to a time when they are better capitalized or their stock prices are higher."

The fear is that the bond insurers will not be able to meet their guarantees amid a wave of defaults. That could result in credit-rating downgrades or collapse, leaving the banks on the hook for tens of billions of dollars in losses on their holdings of collateralized debt obligations, or C.D.O.'s.

"While we understand that the banking industry counterparties to the bond insurers would prefer to avoid taking these C.D.O. risks back on balance sheetsparticularly at a time when their balance sheets are strained by subprime and other losses that have not been hedged, there are no such free lunches in the capital markets," Ackman writes in the February 5 letter.

Ackman says that banks and bond insurers should be forced to disclose their C.D.O. exposures in detail, and that federal regulators should work with state officials to ensure that bond insurers "preserve as much of their capital as possible for the benefit of policyholders and bank counterparties."

The Wall Street Journal reports that consortiums of banks are trying to find ways to unwind the credit-default swaps that they took out with the bond insurers as ways to guarantee the banks' C.D.O.'s.

Banks would receive stakes in the bond insurers, Financial Guaranty Insurance and Ambac Financial, in exchange, the Journal says.

Bankers are afraid that a collapse of bond insurers could have painful repercussions throughout global credit markets.

"It could be a tsunami-like event comparable to subprime," Josef Ackermann, the chief executive of Deutsch Bank, said in an interview with Bloomberg Television.

This post is not about the potential Microsoft/Yahoo merger.

Instead, let's just assume for the moment that Microsoft succeeds in its bid for Yahoo.

What would a Microsoft/Yahoo merger mean for startups in Silicon Valley?

Some smart people whom I respect a great deal believe that a Microsoft/Yahoo merger would be bad for Silicon Valley startups.

Says Bill Burnham, for example: "By swallowing up Yahoo, Microsoft will be removing one of the biggest and most active acquirors of start-ups in Silicon Valley... [making] M&A less competitive in general and [reducing] the # of potential exits... [which is] bad news for Internet [startups] and their VC backers anyway you look at it."

I respectfully disagree; I think that a Microsoft/Yahoo merger would have practically no impact on any high-quality Silicon Valley startup.

And here's why:

First, Yahoo has simply not been all that active in buying Silicon Valley Internet startups -- nor, for that matter, has Microsoft and Google -- contrary to popular perception.

Since Terry Semel's arrival as CEO, and continuing since his departure, Yahoo has become quite conservative when it comes to buying startups.

Yahoo only bought a relative handful of companies in 2007. The big ones were Right Media and Blue Lithium in the advertising space -- where Yahoo was highly motivated to make progress -- and Zimbra in the email space. The small number of other acquisitions (three in the US, I believe -- Mybloglog, Rivals, and Buzztracker) were tiny enough that Yahoo didn't even have to disclose the purchase prices.

Similarly, Microsoft bought surprisingly few companies in 2007. aQuantive was the big dog, and Microsoft was similarly motivated by a high degree of urgency to get on the advertising bus. Apart from that, you're looking at a very small number of very small deals, such as Screentronic and Jellyfish -- fine companies, I am sure, but tiny deals.

And even Google, which did more deals than Microsoft and Yahoo combined in 2007, only did a coule of sizeable ones -- Doubleclick (again that advertising thing), and Postini in email. And, Feedburner got a fine exit from Google given that it hadn't raised much equity funding. But most of the other companies Google bought largely to acquire engineers, and perhaps nascent products that hadn't yet shipped -- not doubles or triples or even necessarily singles from the perspective of venture-funded Valley startups.

Microsoft, Yahoo, and Google are only buying a relatively small number of smaller companies at all today -- so given that, taking Yahoo, or even Microsoft for that matter, out of the M&A races isn't going to reduce the number of deals going down each year by very much.

Second, the spectrum of companies that are doing Internet M&A is surprisingly broad, and, drawing from lists of deals from just 2005-2007, includes names like:

• Akamai
• Amazon
• American Greetings
• AOL
• CBS
• Cisco
• CNet
• Comcast
• Digital River
• Disney
• eBay
• Expedia
• HP
• IAC
• Jupiter Media
• Liberty Media
• Marchex
• MercadoLibre
• Monster
• Motricity
• NBC Universal
• New York Times
• News Corp
• Omniture
• Priceline
• Publicis
• Real
• Sabre
• Scripps
• Shutterfly
• Sony
• Valueclick
• Viacom
• WPP

So the base of buyers for Internet startups is considerably more diversified than you might think.

Third, consider what's likely to happen next.

Many of the traditional media companies -- in the US and overseas -- are looking at their core businesses today and seeing either rapid or imminent deterioration. This is certainly true for television, radio, music, newspapers, and magazines, and quite possibly also true for movies (given the decline in ticket sales and the recent apparent stalling out of the DVD market). And this is also true -- or will be true -- for a pretty broad range of various other businesses that are getting touched by the Internet.

For historical reasons -- skepticism about the potential of the Internet, combined with the false hope presented to many traditional businesses by the dot com crash of 2000-2002 -- many of these traditional companies are not yet appropriately positioned for an Internet-dominated future.

And now, if the Microsoft/Yahoo deal does go through, those same companies in many cases will be looking down a very scary double-barreled shotgun of an ascendant Google and an armored-up Microsoft, aimed right at their lunch, if you know what I mean.

I'm pretty confident guessing that the level of concern and even panic among many traditional companies -- particularly media companies -- is only going to escalate from here, as traditional non-Internet businesses in various sectors deteriorate and consumers continue moving en masse to the Internet.

And from there, it's not hard to guess that Internet M&A is likely to heat up considerably over the next several years, compared to the last several years, across a very interesting and surprisingly diverse cross-section of buyers.

Fourth, new buyers appear on a regular basis.

It wasn't that long ago that Google would not have gone on anyone's list as a significant buyer of other companies.

In the meantime, Facebook has emerged as a company with considerable financial firepower and is already starting to do M&A.

If past is prologue, several new buyers of one form or another will pop up over the next five years, and one or two of them will probably be on the "top buyers" list in 2010 or 2012 -- when you'd be selling a company you start today -- even though we probably haven't even heard their names yet.

Think also about the telecom companies, the mobile carriers, the Japanese consumer electronics companies, the Korean conglomerates, the mobile handset makers -- Nokia is ramping up their Internet M&A efforts right now, European media companies... not to mention the Chinese Internet companies. Any of these could emerge as meaningful buyers of Silicon Valley Internet companies of various forms in the years ahead.

After all, in a world where Cisco is buying social networking startups, anything is possible.

Fifth, building your startup with a goal of getting acquired is foolishness anyway, in my opinion. Smart people disagree with me on this, but I'll make my case in two points:

• Big companies don't want to buy startups that want to get bought. Instead, big companies buy startups that have built something of value that they decide is important to them.
• You can't possibly guess what things of value big companies are going to want to own in one or two or three years. The world is changing too fast -- witness the Microsoft hostile bid for Yahoo itself! -- and besides, big companies are Moby Dick and you can't understand the reasoning behind their decisions anyway.

Combine those two points with the fact that no big company buys that many startups each year anyway, and it's easy to see that the odds of you successfully anticipating something that a big company is going to want in the future and then actually selling your company to them -- as your strategy -- is a very risky proposition that is highly prone to failure.

And in fact, in my experience, most startups that start with the goal of getting bought, fail.

The formula for success in startups is the same today as it's always been, and it will be the same post-Microsoft/Yahoo:

Build something of value -- something that people want, and something that will be profitable at the appropriate point -- and the world is yours.

Successful companies -- companies that have built something of value -- have many options. They can stay private and throw off dividends. They can go public. They can get acquired by big companies who suddenly decide, hey, that looks really valuable, let's buy that. They can sell minority stakes to big investors or strategic partners at very high valuations. All options that are typically not open to the startup that started with the goal of getting bought and didn't build something of independent value.

Or, reduced to a phrase: the best way to get bought is to not be for sale.

Because of this, even if Microsoft, Yahoo, and Google stopped doing M&A completely, the strategy of any high-quality startup in the valley would not change one bit.

Sixth, I believe that a Microsoft/Yahoo merger would actually be a net positive for many high-quality Silicon Valley Internet startups, for a completely different reason.

Again, suppose the takeover bid succeeds. You're looking at probably a year of government approvals, followed by at least a year of integration.

You can't speed up the first part, because that's up to the government, and they don't react well when you scream "hurry up!" at them. And you don't want to speed up the second part, because integrating two companies of the scale and scope of Microsoft and Yahoo is an absolutely enormous undertaking and you want to make sure you do it right, or you're not going to get any of the benefits.

In practice, that will be two years in which both Microsoft and Yahoo will most likely be considerably less aggressive on rolling out new products and new initiatives -- because the key people at both companies will be consumed with the merger.

And, just think, if they are buying fewer companies as a consequence, that also means they're less likely to buy one of your competitors and come after you while you are building your thing of value.

I think this merger, if it happens, will help clear the field for a whole new generation of Silicon Valley Internet startups to create and scale the next set of killer consumer services that will go mainstream and be used by hundreds of millions of people worldwide.

Where does that leave us?

The Microsoft/Yahoo deal, if it happens, means very little for the entrepreneurial climate in Silicon Valley, or the opportunities available to you and your startup.

Your job is exactly the same as before: build something people want, scale it up, make sure it's defensible, and make sure you can make money with it.

Build a company you are proud of.

If you do those things, you'll do just fine; if you don't, neither Microsoft nor Yahoo nor any other big company were going to rescue you anyway.

Nobody ever said this was easy, but in a world moving this fast and this much in flux, it certainly is fun!

At least a dozen major wildfires threatened thousands of homes in Southern California, forcing the evacuation of 500,000 residents. Fears mounted that the infernos, which have already scorched almost 300,000 acres, could become the most expensive fire in California history.

"I think the insurance liability could exceed $2 billion when everything is said and done," said Robert Klein, Director of the Center for Risk Management and Insurance Research at Georgia State University. "This could be the biggest loss since Katrina."

Jason Kirchner, the chief spokesman for the U.S. government's response to the disaster concurred. In a telephone interview withe Portfolio.com, he said that if the damage is "anything like what we saw during the San Diego fires of 2003," then the potential insurance industry liability could be massive.

"We're talking in the billions of dollars," Kirchner said. "We have a vast amount of fire in Southern California."

Insurance companies facing potential settlements include Allstate, State Farm, American International Group, Chubb, and scores of smaller insurance and reinsurance companies. A.I.G. has sought to protect its wealthiest California clients by preemptively spraying fire retardant around their homes.

Because there are so many major blazes raging at once, authorities have instituted a "unified command" protocol reserved for only the most serious emergencies, Kirchner said, adding that the government's focus right now is on assessing fire conditions and deploying resources.

Industry experts warned that more destruction could be forthcoming.

"Over 900 properties have been destroyed and thousands more remain threatened," said Neena Saith, a catastrophe-response analyst at insurance consultancy Risk Management Solutions. "The Witch fire in San Diego County has caused the most destruction so far. But it is the Canyon fire that many insurers will be keeping a close eye on, because Malibu is a million-dollar area, and if the fires reach that area, there is the potential for major losses."

Malibu is home to many wealthy Hollywood figures. Mel Gibson and Kelsey Grammer were among those forced to flee from the flames.

Nearly 1,000 homes, businesses, and other structures had been destroyed as of Tuesday, the Los Angeles Times reported, prompting fears that the cost of the disaster could reach several billion dollars, surpassing the deadly San Diego "Cedar" fire of 2003.

As the fires raged out of control Tuesday, insurance industry analysts struggled to estimate the potential losses.

"We don't have any numbers yet," Insurance Information Institute vice president Loretta Worters told Portfolio.com. "Homes are still burning. The biggest losses could come if the fires reach the McMansions in Malibu."

John Wood, a Smokejumper captain based in Redding, California, said that unusually strong winds had exacerbated the flames.

"The Santa Ana winds have come through and created a very dangerous situation," the 40-year-old firefighter said in a brief phone interview.

Initial reports from first responders battling the blaze were ominous.

"It was like Armageddon. It looked like the end of the world," Mitch Mendler, a San Diego firefighter, told the Associated Press as he and his crew refilled their fire truck with water from a hydrant near a local mall, before heading back into the fire.

The disaster will be a key test of state and federal disaster response two years after Hurricane Katrina.

According to the L.A. Times, the costliest fires in California history are the 1991 Oakland Hills fire ($2.5 billion), the 2003 San Diego fire ($1.1 billion), the 2003 San Bernardino "Old" fire ($1 billion), and the 1993 fires in Los Angeles and Oakland, which together cost $1 billion.

Bloomberg News reported that at least six homes were destroyed in Rancho Santa Fe, a residential community where the average sale price is $2.5 million. Last year, Forbes magazine ranked Rancho Santa Fe as the second priciest Zip code in the U.S.

But with no respite from the gale force Santa Ana winds expected until Tuesday eveningsome gusts reached 85 m.p.h. on Mondayfire crews appeared overwhelmed by the multiple infernos.

None of the biggest firesincluding Witch, Harris, Ranch, Canyon, Buckweed, and Magicwere reported to be more than 30 percent contained as of Tuesday. Several were reported to be expanding and merging.

The catastrophic Witch firewhich has burned 145,000 acres and destroyed at least 500 homes and 100 commercial establishmentswas completely uncontained on Tuesday afternoon, according to multiple reports.

Larry Himmel, a reporter for San Diego's Channel 8, provided an astonishing dispatch of the damage while standing in front of his house as it burned to the ground.

"This was a living hell coming over the hill, and this is what I come home to today," an emotional Himmel reported.

In an indication of the severity of the emergency, all San Diego schools were closed, Hewlett-Packard evacuated employees from its large office near Escondido, the San Diego Chargers moved practice to Arizona from Qualcomm Stadium, which is being used as an evacuation center, and the Navy asked only "essential personnel" to report to work, Bloomberg reported.

California Governor Arnold Schwarzenegger called the crisis "a tragic time for California," and declared a state of emergency in seven counties.

Late Monday, Schwarzenegger announced that federal help was on the way, in the form of six C-130 military transport aircraft capable of dropping up to 3,000 gallons of water or flame retardant at a time.

State officials implored citizens to avoid unnecessary cell phone and 911 calls and pleaded for assistance from fire departments in California's neighboring states.

Two Google Maps features depicted the scope of the emergency. Multiple Red Cross centers and other evacuation sites were reported to be at capacity, and sections of Interstate 5, Interstate 15, and the Pacific Coast Highway were reported closed.

Schwarzenegger called up 1,500 California National Guard troops to help battle the blaze, after earlier deploying soldiers from the Mexican borderwhere they were guarding against illegal immigrants. More than 20,000 California National Guard soldiers and airmen have been deployed to Afghanistan and Iraq since 9/11.

As fire crews battled the infernos, fewer than 100 firefighters were left to protect San Diego, a 400-square-mile city, said John Langford, a spokesman for San Diego Fire and Rescue.

More than 2,300 inmates from California state prisons were enlisted to aid state and local firefighters.