Now that you’ve settled into your latest position as the head of Hewlett-Packard, we wish to make a request of you. That request is, “Please take HP back to the greatness it once represented.” The culture once known as “The HP Way” has gone astray and the people have suffered as a result. Those people are of course the vast collection of incredible HP employees, but also its even vaster collection of customers. They (ahem, we) once believed in the venerable enterprise that Bill Hewlett and David Packard conceived and built through the latter half of the 20th century.
HP became renowned for its innovation and the quality of its products. While they tended to be pricey, we bought HP products because we knew they would perform well and perform long. We could count on HP to not only sell us technology, but to guide us in our journey to use this technology for the betterment of our own lives. We yearn for the old HP that inspired Steve Jobs to change the world – and he did!
We need not remind you of what transpired over the past decade or so, but we do have some suggestions for what you should address to restore the luster of HP’s golden age:
Commit to a mission. HP needs an audacious mission that articulates a purpose for every employee, from you and the HP board all the way down to the lowest levels. Borrow a page from IBM’s Smarter Planet mission. While it sometimes seems over the top, that’s the whole point. It is over the top and speaks to a bold mission to create a new world. Slowly but surely, IBM is making the planet smarter. Steve Jobs got Apple to convince us to Think Different, and we did. What is HP’s mission?
Emerging ARM server Calxeda has been hinting for some time that they had a significant partnership announcement in the works, and while we didn’t necessarily not believe them, we hear a lot of claims from startups telling us to “stay tuned” for something big. Sometimes they pan out, sometimes they simply go away. But this morning Calxeda surpassed our expectations by unveiling just one major systems partner – but it just happens to be Hewlett Packard, which dominates the WW market for x86 servers.
At its core (unintended but not bad pun), the HP Hyperscale business unit Project Moonshot and Calxeda’s server technology are about improving the efficiency of web and cloud workloads, and promises improvements in excess of 90% in power efficiency and similar improvements in physical density compared with current x86 solutions. As I noted in my first post on ARM servers and other documents, even if these estimates turn out to be exaggerated, there is still a generous window within which to do much, much, better than current technologies. And workloads (such as memcache, Hadoop, static web servers) will be selected for their fit to this new platform, so the workloads that run on these new platforms will potentially come close to the cases quoted by HP and Calxeda.
HP made the right decision today to keep the Personal Systems Group. Beyond the reasons cited, supply chain and sales synergy and expense of spinning out, it's also crucial for HP to remain in the market for personal devices, which is entering a period of radical transformation and opportunity. The innovations spawned first by RIM with the BlackBerry, followed by the transformative effects of Apple's iPhone and iPad are beginning to ripple into the PC market. Apple's MacBook Air and Lion operating system, combined with Microsoft's Metro interface for Windows 8 herald the beginning of a transformation of personal computing devices. By keeping PSG, HP has the opportunity to innovate and differentiate in the PC market that will move away from commodity patterns.
For vendor strategists at vendors of all sizes, one of the lessons of HP's decision is that consumer businesses are becoming more relevant to succeeding in commercial products for end users. During the announcement call today, CEO Meg Whitman talked about the importance of "consumerization" in winning business from enterprises. I heartily endorse that view and look forward to sharing a report soon on how consumerization is changing commercial product development.
Do you think consumerization was a part of why HP kept PCs?
What effect do you think consumerization will have in IT markets?
There has been a lot of ill-considered press coverage about the “death” of UNIX and coverage of the wholesale migration of UNIX workloads to LINUX, some of which (the latter, not the former) I have contributed to. But to set the record straight, the extinction of UNIX is not going to happen in our lifetime.
While UNIX revenues are not growing at any major clip, it appears as if they have actually had a slight uptick over the past year, probably due to a surge by IBM, and seem to be nicely stuck around the $18 - 20B level annual range. But what is important is the “why,” not the exact dollar figure.
UNIX on proprietary RISC architectures will stay around for several reasons that primarily revolve around their being the only close alternative to mainframes in regards to specific high-end operational characteristics:
Performance – If you need the biggest single-system SMP OS image, UNIX is still the only realistic commercial alternative other than mainframes.
Isolated bulletproof partitionability – If you want to run workload on dynamically scalable and electrically isolated partitions with the option to move workloads between them while running, then UNIX is your answer.
Near-ultimate availability – If you are looking for the highest levels of reliability and availability ex mainframes and custom FT systems, UNIX is the answer. It still possesses slight availability advantages, especially if you factor in the more robust online maintenance capabilities of the leading UNIX OS variants.
I just spent several days at Dell World, and came away with the impression of a company that is really trying to change its image. Old Dell was boxes, discounts and low cost supply chain. New Dell is applications, solution, cloud (now there’s a surprise!) and investments in software and integration. OK, good image, but what’s the reality? All in all, I think they are telling the truth about their intentions, and their investments continue to be aligned with these intentions.
As I wrote about a year ago, Dell seems to be intent on climbing up the enterprise food chain. It’s investment in several major acquisitions, including Perot Systems for services and a string of advanced storage, network and virtual infrastructure solution providers has kept the momentum going, and the products have been following to market. At the same time I see solid signs of continued investment in underlying hardware, and their status as he #1 x86 server vendor in N. America and #2 World-Wide remains an indication of their ongoing success in their traditional niches. While Dell is not a household name in vertical solutions, they have competent offerings in health care, education and trading, and several of the initiatives I mentioned last year are definitely further along and more mature, including continued refinement of their VIS offerings and deep integration of their much-improved DRAC systems management software into mainstream management consoles from VMware and Microsoft.
In a surprising move, HP and Cisco announced that HP will be reselling a custom-developed Cisco Nexus switch, the “Cisco Nexus B22 Fabric Extender for HP,” commonly called a FEX in Cisco speak. What is surprising about this is that the FEX is a key component of Cisco’s Nexus switch technology as well as an integral component of Cisco’s UCS server product, the introduction of which has pitted the two companies in direct and bitter competition in the heart of HP’s previously sacrosanct server segment. Combined with HP’s increasing focus on networking, the companies have not been the best of buds for the past couple of years. Accordingly, this announcement really makes us sit up and take notice.
So what drove this seeming rapprochement? The coined word “coopetition” lacks the flavor of the German “Realpolitik,” but the essence is the same – both sides profit from accommodating a real demand from customers for Cisco network technology in HP BladeSystem servers. And like the best of deals, both sides walk away thinking that they got the best of the other. HP answers the demands of what is probably a sizable fraction of their customer base for better interoperability with Cisco Nexus-based networks, and in doing so expects to head off customer defections to Cisco UCS servers. Cisco gets both money (the B22 starts at around $10,000 per module and most HP BladeSystem customers who use it will probably buy at least two per enclosure, so making a rough guess at OEM pricing, Cisco is going to make as much as $8,000 to $10,000 per chassis from HP BladeSystems that use the B22) from the sale of the Cisco-branded modules as well as exposure of Cisco technology to HP customers, with the hope that they will consider UCS for future requirements.
OK, out of respect for your time, now that I’ve caught you with a title that promises some drama I’ll cut to the chase and tell you that I definitely lean toward the former. Having spent a couple of days here at Oracle Open World poking around the various flavors of Engineered Systems, including the established Exadata and Exalogic along with the new SPARC Super Cluster (all of a week old) and the newly announced Exalytic system for big data analytics, I am pretty convinced that they represent an intelligent and modular set of optimized platforms for specific workloads. In addition to being modular, they give me the strong impression of a “composable” architecture – the various elements of processing nodes, Oracle storage nodes, ZFS file nodes and other components can clearly be recombined over time as customer requirements dictate, either as standard products or as custom configurations.
In the good old days, computer industry trade shows were bigger than life events – booths with barkers and actors, ice cream and espresso bars and games in the booth, magic acts and surging crowds gawking at technology. In recent years, they have for the most part become sad shadows of their former selves. The great SHOWS are gone, replaced with button-down vertical and regional events where you are lucky to get a pen or a miniature candy bar for your troubles.
Enter Oracle OpenWorld. Mix 45,000 people, hundreds of exhibitors, one of the world’s largest software and systems company looking to make an impression, and you have the new generation of technology extravaganza. The scale is extravagant, taking up the entire Moscone Center complex (N, S and W) along with a couple of hotel venues, closing off a block of a major San Francisco street for a week, and throwing a little evening party for 20 or 30 thousand people.
But mixed with the hoopla, which included wheel of fortune giveaways that had hundreds of people snaking around the already crowded exhibition floor in serpentine lines, mini golf and whack-a-mole-games in the exhibit booths along with the aforementioned espresso and ice cream stands, there was genuine content and the public face of some significant trends. So far, after 24 hours, some major messages come through loud and clear:
Picture the scene in the HP boardroom when the board members decide the company needs (another) new CEO. They had trouble just last fall finding outside candidates and don’t seem satisfied with internal candidates. I can imagine a New Yorker cartoon–like scene, where they all agree to draw straws, and the board member drawing the short straw gets the CEO job!
But it was not like that. The board realized something that Forrester felt for some time — that HP needs better communications to customers, markets, and employees. Meg Whitman, former eBay CEO, is a not an obvious choice, especially given her primarily consumer and web business experience. But she brings strong Silicon Valley roots, something lacking in HP’s recent CEOs, which should help a lot with injecting new energy into HP. And she starts with a strong business reputation for growing eBay, being a good leader, and communicating well. Plus she’s got a nine-month head start as board member on understanding HP over any outside candidate.
As the new HP CEO, Whitman faces a difficult situation. HP has a strong set of products and customer brand that are being damaged by the uncertain directions of the board and the repeated CEO turmoil. Meanwhile, the Wall Street traders and technology press are overreacting, as they often do — HP has solid product and service offerings that are just as good as they were last week, before the latest leadership turmoil. So what should she do?
There seems to be a renewed interest in Africa. Is it that those who follow emerging markets have tired of China and India? Is it the recent events in North Africa that have sparked interest and hope for the region? Or could it be that, as McKinsey Global Institute put it, at least some African countries “have turned a corner and are now on the path to sustainable growth and poverty alleviation?”
From a technology perspective, it is also likely that finally with recent developments in both undersea cable and satellite links, the Internet has arrived in a way that makes Africa a viable market for ICT. And by that I mean not just for low-cost, bottom-of-the-pyramid solutions and not just South Africa, both of which have long been on the radar of some technology vendors for some time.
I’ve been studying Africa on-and-off for over 20 years now. In 1989 I took a one-way ticket to Bujumbura, Burundi (yes, I did have to look it up on a map first), traveled to Bukavu, Zaire (now Democratic Republic of the Congo), where I spent the summer, and eventually settled in Bossangoa, Central African Republic, where I was a high school math teacher for two years. At that time there were no telephones in my city although it was the largest in the region, and only limited lines into and out of Bangui, the capital. I spoke to my parents three times in two years, which is very hard to imagine in these days of Skype and Facebook. Needless to say much has changed in Africa as well.