February 21, 2013
HP ends red ink overall, but BCS tumbles
HP is likely to remain intact for a long time, based on the comments from its CEO Meg Whitman at the latest quarterly report briefing. "The patient shows signs of improvement," she told an audience of analysts and the press. "We did better than we expected we would, and I think we should be encouraged by that."
Even though the company halted its quarters of red ink at two — Q1 delivered a profit of $1.2 billion, compared to the loss of $8 billion in the previous quarter — the top management delivered a dire report on business server enterprises at HP. Sales dropped company-wide by 6 percent to $28.4 billion. Its Enterprise Group sales fell $245 million, led by the continuing troubles at the Business Critical Systems unit.
"Our server business has a particularly strong market position in EMEA," said CFO Cathy Lesjak, "and the economic backdrop of that [region] is still dismal. The Itanium challenges within BCS are also still with us. There are key challenges still out there."
Lesjak said the news from the PC group — which HP said it has no plans to spin off — couldn't even meet HP's hopes. "Frankly, the business deterioration we are seeing in Personal Systems — particularly in EMEA and with notebooks — is worse than we expected."
One analyst on the call noted that the profit margins for the Enterprise Group have dropped for nine straight quarters. He wanted to know why, and Whitman laid the first pile of blame upon Business Critical Systems, the unit where HP sold 3000s until it dropped the server 10 years ago.
"The negative factor is the decline of BCS," Whitman said. "It was a big and profitable business, and you see that it's declined by 24 percent year over year. The good news is that we've got the best product lineup we've had in a long time in [the Enterprise Group.]" Whitman went on to note that HP is making investments behind the Enterprise lineup.
"R&D is the lifeblood of this business," she said of HP's enterprise products such as HP-UX servers and storage. Whitman believes that the enterprise customers will bring along Technical Services business to improve HP profits overall.
So how did the company turn a profit for the period? It didn't have to write off the value of Autonomy this time around, or subtract the valuation (through a goodwill writedown) of its Enterprise Services Group. Those were multi-billion-dollar hits in the last two quarters, including $8.8 billion in the previous quarter alone.
Even though Whitman called 2013 "a fix and rebuild year," the company still expects to be delivering $3.40 a share in fiscal year profits. That amounts to $6.6 billion HP believes it will earn using non-Generally Accepted Accounting Practices. These non-GAAP numbers are usually twice as high as accepted numbers. It still adds up to billions in profits for a year where HP says it's going to remain a single company.
"We have no plans to break up the company," Whitman said. "I feel quite strongly that we are better and stronger together." She believes that the past 10 years of business has built "the most valuable franchise in IT, particularly as we look forward to the most significant change in how IT is bought, paid for and consumed. We have a terrific set of assets, and we're going to drive that to really great business performance."
Even though HP's PC business contributes only 10 percent of the company's total profit, Whitman managed to spin that number into a positive. HP thinks pricing for PCs is going to be a problem, so it's glad that PCs only contribute a minimal share of earnings. The CEO thinks there's a better road ahead for an HP that remains intact.
"Customers want this company to be together," she stressed. "We heard that loud and clear on August 18, 2011." That was the day when HP released a quarterly report that it was studying a PC-Enterprise breakup. Shareholders sold down the stock that week on the news, along with the damage of dumping CEO Mark Hurd.
The return to black ink on HP's reports is a good sign about the company's futures, Whitman said. "The turnaround is on track. We have three more quarters to go in this year. We feel very confident about delivering the full year results. But we have to deliver, and we have to execute as an organization."
HP executed 3,500 employee departures in the first quarter, and it reduced its headcount by 11,800 in the fiscal year that ended in October. "We've now asked 15,300 people to leave the company," Whitman said. "We can actually see savings from that, and see a more streamlined and focused organization. This is the financial capacity we will need to hit our numbers. And it's the financial capacity we will need to invest."
Get e-mail notice when the NewsWire blog gets a new entry. Just say "Blog Me" in a message to email@example.com.
February 19, 2013
HP aims at Enterprise ally uptick for 2013
Hewlett-Packard will be reporting about its past in a couple of days, briefing analysts at 5 PM EST Feb. 21 about the quarter just ended in January. But the company will be looking ahead at its fiscal quarters to come starting tomorrow, when it briefs HP allies at its 2013 Global Partner Conference.
Issues and opportunities for customers who are migrating, or have already moved, will dominate the conference. That almost goes without saying; HP's closed off all other 3000-related business including support. But HP is also going to share information that could be just as useful for those analysts, being briefed in the same week. HP's going to talk about its Oracle alliance at the meeting in Las Vegas (see the detail at left). The story might be the same for partners as analysts and the business press. Sales ally presentations will have an optimistic slant in Vegas. Eveyone wants to be hopeful in that town, at least when they arrive.
What HP sketches at this sales meeting -- the year's largest partner conference -- will shape what these partners say to customers about Oracle. The database vendor has been forced by the courts to keep working with HP on Itanium server technology. Nobody knows what that enforced alliance will yield yet. The court ruling and Oracle's capitulation only happened in September. Partners have fielded too many questions about the FUD that Oracle spread, and HP's said in previous quarterly reports that FUD choked off Enterprise business.
However, it's an article of faith: applications determine where a customer will go when they leave the 3000. But an application off the shelf always needs a database, and Oracle is underneath a lot of them, especially on HP-UX. If a migrating customer can ask an HP partner, "What's the database feeding that application?" then the answer -- leavened with this week's Oracle alliance message -- can shape a migration decision. You'd want to know if you were entering the Oracle enterprise airspace by migrating onto an app in Itanium, wouldn't you? Especially with a court order driving Oracle development.Application suppliers will sometimes overlook this kind of tech detail as they present to a customer's higher management. This is the sort of question that an IT manager, or a system architect, would be first to ask. For example, if you're moving your 3000 asset application for higher-ed to Banner on a Unix box, you won't see much reference to Oracle on the Banner webpages.
A migrating manager would have to go into the product roadmap pages at the website of Ellucian, the company that owns Banner after buying up Sungard. Sure enough, there in the PDF presentation for Banner is a twin track -- using Microsoft databases and using Oracle's.
Those columns represent Windows vs. Unix choices. You could probably assume if you're picking HP-UX for any application it'll be running Oracle. That's the same setup for the Ecometry Open migration solution for retailers.
Oracle still has a lot of clout in driving the migration choices for 3000 sites. Some want Windows for staffing reasons and lower hardware/support costs. They might also be choosing a path were the HP alliance with the database vendor isn't something that requires a briefing at a Partner Conference.
February 13, 2013
Where they've gone: TV George, on from HP
For awhile in the 1990s, George Stachnik was the equivalent of Ed McMahon for the HP 3000 world. He hosted the first set of telecasts, via satellite feed to HP offices, directed at improving the HP 3000 customer experience. You were likely to see him at Interex user group events. And then he had a reprise as HP's voice of migration advice in a series of Webinars, back when that was still a new medium.
This year Stachnik has made his exit from HP, after more than 29 years of service. He has joined the staff at Porter Consulting in the Bay Area. The company develops marketing programs, collateral material such as articles and white papers, enterprise marketing management, and content delivery via websites and mobile channels.
In summary, it's the same kind of work Stachnik did for HP for the past two decades and more. He made a transition from HP support engineer to marketing in 1991 and never looked back. After the era of educating customers via satellite and videotape ended, he trained customers for HP's NetServer Division. These were Windows enterprise servers. To the last of his HP days, Stachnik was an enterprising face in the 3000's cast. One of his wilder moments involved destroying an HP 3000. Or attempting to do so.To be fair, it wasn't Stachnik who pushed an HP 3000 off a two-story building's roof during the 1990s. But he narrated the stunt that the marketing group had designed to prove the system's durability.
It's part of HP 3000 lore, and a simple 7 MB download that opens in the world's tiniest web video player window (as a Quicktime file). We scooped it up when the Web was a lot newer and that 7 MB seemed like a big file. His audio, however, is bigger than the movie looks.
Stachnik was also a prolific writer, penning a series of more than 30 articles for Interact magazine that educated the novice IT pro on using the HP 3000. The articles first appeared in 1997, at the 25th anniversary of the system. The full extent of that series is available at Chris Bartram's 3k.com website, in the papers section.
We say congratulations to him for landing in a new spot after taking leave from HP. He was one of the last lights from the 1990s 3000 group who'd remained at the company, at least in a very public job. Some engineers remain, working in other divisions. But nobody who could narrate a Parachute Event for the HP 3000 Games is wearing an HP badge anymore.
January 17, 2013
Battleship HP clears the $17 waterline
Hewlett-Packard's share price opened and remained above $17 per share today for the first time in more than three-and-a-half months. The last $17 day was October 2, when CEO Meg Whitman delivered a devastating report to investors and analysts about profits and sales for HP's year to come.
HP shares fell 13 percent on that day, one marked by the admission that Hewlett-Packard's profits would sink by 10 percent in fiscal 2013. Rock bottom for the darkest quarter in HP history came about six weeks later, when the news of fiscal shenaigans by the acquisition of Autonomy drove shares below $12.
That rugged news now behind HP still must be balanced by the company's Q1 performance. Sales close in two weeks, HP's first full quarter without the FUD of Oracle's pullout from the Itanium server line. Stronger sales in the Business Critical Server unit will signal a better investment target for migrating customers -- at least the ones who want to choose HP-UX for the systems to replace HP 3000s.
The HP quarterly Earnings Conference Call will take place on February 21. HP hasn't released any signal that it will spin out its enterprise business from PC operations, a move which investors are calling for.
January 11, 2013
What If: Fault lay not in the 3000, but in HP?
In the early years of my HP reporting career, the company tried to sell PCs against IBM. It had innovative technology in touchscreen HP 150s with strong links to enterprise office software via those PCs. HP's ad slogan began with an invitation to a customer to imagine something more connected to the customer than IBM: "What If?"
It's a good question today, nearly 30 years later, especially when used to evaluate HP 3000s. HP lopped off its futures with the server in 2001, less than a year before it attacked the PC market by purchasing Compaq. Some products had to go, if HP hoped to convince institutional shareholders that a $25 billion acquisition was good business.
So the 3000 was derided and deprecated by HP. The server had a failing ecosystem. Customers wanted other HP products, like PCs for businesses, running Windows. Over a few more years, HP acquired even more love of outside products. It changed itself as a company, while it fled from the challenge of asking customers what if about its unique technology like the HP 150. Now there are calls for HP to return to the company that it was before it became a consumer-obsessed, low-touch customer service juggernaut that's careened into a financial ditch.
What if the fault lay not in the HP 3000's starry design, but in HP's leaders themselves? When Steve Jobs takes a walk through the neighborhood of Palo Alto to counsel an ousted CEO of HP, you can be pretty sure that a great deal had changed for HP, and none of it for the better. And that walk took place more than two years ago. Jobs believed that Mark Hurd should've never left HP.
That's how completely Hewlett-Packard had faulted from its enterprise line. A leader who slashed R&D, and rubber-stamped even more pell-mell pursuit of the consumerist strategy, was now the bulwark. Proof enough HP had changed completely, and offered in a story this week from the Apple community.If the HP 3000 were a sound product -- and it has been HP that's grown unsound since that 2001 Fall of the Compaq and MPE disasters -- perhaps we can hear a "What If" about the indelible value in the 3000 concept. A computer whose intellectual property, from silicon to software, is controlled by its creator. A system built on the use-it-forever designs of PA-RISC, rather than the churn of commodity systems.
Today I interviewed a former 3000 manager at Dayton T. Brown, the largest and most thoroughly equipped independent engineering and testing laboratory in the U.S. They purchased a Series 917 and a Series 937 in 1994. They stopped using them completely in 2007. That's 13 years at a major US business running on servers built to last. By way of contrast, that was a typical kind of enterprise product. When Dayton T. Brown bought their 9x7 systems in the early 1990s, only HP's printers were commodity items driving enterprise IT.
In the Apple world, this lifespan is the equivalent of desktops from 2003 still running the largest printer and mailing house in Austin. iMacs from a decade ago are still on the job in shipping, planning, even design at Touchpoint. Apple controls all of that intellectual property in those Macs, just as HP once did with the 3000.
The story circling in the 3000 community this week about Steve Jobs has him imploring Mark Hurd to return to HP. Hewlett-Packard was an essential part of the Silicon Valley ecosystem. Losing another CEO -- Carly Fiorina had left five years earlier -- was going to be bad for HP. MacRumors reports that Bloomberg Businessweek is telling this story about that fear of HP's faults.
Three days after he’d resigned as CEO under pressure from the company’s board of directors, Hurd received an e-mail from Steve Jobs. The Apple founder wanted to know if Hurd needed someone to talk to.
Hurd met Jobs at his home in Palo Alto, according to people who know both men but did not wish to be identified, compromising a personal confidence. The pair spent more than two hours together, Jobs taking Hurd on his customary walk around the tree-lined neighborhood. At numerous points during their conversation, Jobs pleaded with Hurd to do whatever it took to set things right with the board so that Hurd could return. Jobs even offered to write a letter to HP’s directors and to call them up one by one.
The BusinessWeek article takes a look at how HP fell from its dominating position in tech. and if new CEO Meg Whitman can pull it out of the ditch. She's hearing many analysts say a split of HP -- into what it once was in the 3000 days, and another part of what it became afterward -- is the only way.
What if Hewlett-Packard wasn't right for the HP 3000 anymore, by 2001? The company had let its board fall under the spell of consumerist forces which made printers the primary profit engine. PCs were a natural product to follow a printer, and Compaq owned a dominant part of that market. That's why HP bought them -- to become number one and overtake Dell.
By now, the advice that's become rampant among investors -- the same audience that cheered HP into buying Compaq -- is that enterprise systems like the 3000, or Integrity, will continue to fail when paired with PCs.
And at Dayton T. Brown, no more HP servers run the largest labs in the US. Dell's servers, running Microsoft's Windows, have replaced the Hewlett-Packard products from the old HP Way. If HP wasn't right for the 3000 anymore -- instead of the other way around -- there's hope in a future where the gleaming heart of the system, MPE, can live beyond anything that HP might become over the coming year. As Shakespeare might have told the HP board and braintrust, "The fault, dear Brutus, lies not in the stars, but in ourselves."
January 08, 2013
How to Make HP's Diagnostics Free on MPE
More than two years ago when HP officially closed its formal HP 3000 support, the vendor left its diagnostics software open for use by anybody who ran a 3000. Throughout the years HP sold 3000 support, CSTM needed a password only HP's engineers could supply. But the CSTM diagnostics tools started to run on January 1, 2011 without any HP support-supplied password.
However, managers need a binary patch to free up the diagnostics. Support providers who've taken over for HP know how to enable CSTM. The community has a former Hewlett-Packard engineer to thank, Gary Robillard, for keeping the door to the diagnostics open. Robillard says he is "the engineer who, last worked on CSTM for MPE/iX when I was still a contractor at HP back in 2008."
A 3000 site must request a patch to get these expert tools working. HP arranged for 3000 sites to get such patches for free at the end of 2010. We tracked the procedure in a Newswire story, just in case that HP link above goes dark.
One such patched version of CSTM needs a binary patch. This month Robillard was revisiting his binary patch fix, which can be a part of using these diagnostics, with the HP patch ODINX19A noted below.
Versions of CSTM [patched] with ODINX19A or ODINX25A allow the expert tools with no licensing, but you still have to issue the HLIC command.
If you install ODINX25A/B/C (6.5,7.0,7.5) you won't need to do anything except issue the hlic command with any password. The HLIC command might say it was not accepted, but the license is activated anyway.
At the end of 2010, Robillard said his patch corrects the problem with ODINX19A -- and gives 3000 managers access to these system diagnostics -- for servers running the 6.5, 7.0 or 7.5 versions of CSTM.
If you have installed ODINX19A, you need to do the following:
Logon as MANAGER.SYS. It's safest to create an input file to sompatch.
1. Run editor.pub.sys
2. Add the following three lines EXACTLY. The sompatch will only work if the instruction at offset 268 matches 86a020c2. The message "Error: Old value does not match" is displayed and no changes are made)
Here are the contents of BINPCHIN file (You will want to copy and paste these);
~~~~~The 3 lines are below~~~~~~~
; Fix problem in DIAGMOND after 12/19/2010
modify ms_init_manage_sys + 268,1 86a020c2|08000240
~~~~The 3 lines are above~~~~~~~~
• Make sure DIAGMOND is not running (run STMSHUT.DIAG.SYS)
• copy /usr/sbin/stm/uut/bin/sys/diagmond,DIAGMOND
• run sompatch.pub.sys;stdin=BINPCHIN;INFO='DIAGMOND'
• copy DIAGMOND,/usr/sbin/stm/uut/bin/sys/diagmond;YES
• Restart DIAGMOND (run STMSTART.DIAG.SYS)
After a few minutes, a "SHOWPROC 1;TREE;SYSTEM" should show the DIAGMOND process, and either the mapping processes, or memlogd, diaglogd and maybe cclogd (on A/N Class 3000s only).
December 27, 2012
2012 top losses: Itanium's future, HPQ value
By Ron Seybold
Second in a series
During 2012 the recent legacy of Hewlett-Packard pulled down the company's futures and values openly for the first time. The company's 73 years of business had devolved in full. A lawsuit exposed completely the new wart of borrowing R&D dollars, over a full decade, to boost HP revenues via mergers and buy-ups. The future of competition was mortaged for commodity computing. The same lack of R&D appetite that'd left the HP 3000 out in the cold after acquiring Compaq business computing now showed HP was bereft of enterprise intellectual property. Nowhere did the cupboard look more bare than the tech choice that had dumped its MPE/iX futures: Itanium.
It became plain that the VP of the BCS Unix-Itanium unit, Martin Fink, pushed a plan that might have grown HP-UX stronger just as 3000 sites were getting serious about investing in Unix. The decline of HP 3000 support contracts was even noted in a 2010 document, one that tried to prove that moving Unix to x86 would benefit HP -- by way of sparking new Integrity sales and stronger support revenues for the last OS developed by Hewlett-Packard, HP-UX. One that remained utterly tied to a single chip, Itanium -- until the HP Odyssey emerges from development.
Concocted as a replacement for Intel x86 chips in 1992, the processor that powers all HP Unix servers was uncovered as a product reduced to earning support profits for HP, while taking earnings out of its partner Intel's pockets since 2007. Oracle did lose its lawsuit to halt Itanium releases. But the magnum of evidence uncorked by Oracle -- hundreds of emails that spoke an astounding honesty about the final HP-built enterprise tech environment -- overflowed in the press as well as the courtroom.
Damages to HP from the Oracle lawsuit may fall on the database maker, but the wreckage will not be measured by HP's greatest loss: company valuation. HP sloughed off 43 percent of its market cap during 2012, the largest US slide for the year and a loss attributed to failed mergers fueled by R&D cuts and layoffs. The evidence from HP emails and slides in 2012 made its case of losing up to $4 billion yearly in Itanium-related profits -- even while the company knew, and withheld, facts from its own sales regions about the dire futures of the chip family. The BCS unit continued its slide as of the November financial report (see p. 7 of HP's PDF).
I revisited the turning point of HP's 3000 and MPE/iX exit, but written much larger -- hundreds of thousands of servers put at risk because HP didn't control its own intellectual property for chips anymore. Intel would have to be satisfied, or paid off. In 2012 we learned the latter plan was picked by a board that was still fleeing R&D in 2010.
I wrote a host of articles during 2012 to keep driving home points about investments in HP's Unix. Most of the analysis meant to show that the customers who transitioned HP dollars from MPE to Unix were re-investing in a technology no longer growing (like HP's measure of the 3000 in 2001), one that needed hundreds of millions of HP R&D to keep moving forward.
Even the company's new transition strategy, HP Odyssey, admitted the marketplace had stopped investing in Integrity servers. The business earned profits for HP in the same way that HP collected earnings from MPE/iX. Support contracts, which HP called Technical Services (TS) monies in confidential emails and slides, had dyed Itanium ink from red to black. All was revealed in court exhibits, dumped by Oracle and catalogued by an All Things D reporter for the marketplace to see. Business Critical Systems including HP-UX continued a sales slide -- and a lack of R&D contributed to a decline of vision the markets could now see.
In the email and PowerPoint slide court exhibits listed on Scribd as Oracle Itanium Exhibits Chronological, (a dynamite browse), an urgent HP management story spilled out. Itanium was dying, Intel wasn't cutting HP's minimum purchase requirements, and the sales force and customers were being kept in the dark. In 2009 while the company was trumpeting the advent of a new Integrity system line, Business Critical Systems VP Martin Fink explained in one email that his BCS mission wasn't motivating HP salespeople to keep Itanium-Integrity growing. Not even Intel could be persuaded to help HP discount those Integrity-based systems to make attractive margins.
From the regions' viewpoint, what they see is that
• we have a non-competitive chip
• we are delayed by more than a year, and
• we get no funding relief from Intel to help with margins and keep us in deals.
In short, they're not very impressed with the BCS worldwide team's ability to drive Intel. The Itanium situation is one of our most closely guarded secrets, and we have not wanted to let the region/field know about it, since all it would do is give them another reason not to sell.
There was another way forward for Itanium and HP's Unix, a concept that required the vendor to acquire Sun's Solaris Unix.
Or if only, Fink figured in 2010, HP could invest in an x86 Unix at a cost of $487 million. It could keep Unix revenues stable into 2018. HP considered saving its Unix business in another way in 2009; Fink exhorted its board of directors to buy struggling Sun Microsystems. Oracle acted more decisively on that buy-up, one which HP code-named "Blackbird." (See slide above from early 2009.)
Oracle swept in to snatch the HP Unix competitor. It left HP facing a reality of selling a second-tier Unix on chips that it was paying Intel $88 million a year just to keep developing -- all while the TS support profits declined, from 3000s right down to Integrity servers. (Click on 2010 slide below for details on perhaps the last HP management slide to mention the HP 3000 and its revenues.)
We learned in 2012 that HP knew it had nothing left in its R&D property cupboard to help Unix. Text from the slide below showed HP knew in 2009 that x86 chips would "fulfill all aspects of RISC within 5 years."
Strategic Rationale - Current Situation
• HP-UX is on a death march due to inevitable Itanium trajectory
• Companion Technical Services attach business declines precipitously but with a longer tail than the product business
-- No replacement for 45% revenue and 60% of GM for the TS business
-- TS Value is tied to HP-UX and we do not have a go-forward
• x86 is on a credible trajectory to fulfill all aspects of RISC within 5 years
• Going forward, HP will not own the software IP stack upon which to build value -- the hardware stack gets commoditized
Fink went on to be named as the head of the storied HP Labs during 2012 -- the least technically-proven and most business-savvy leader the labs have ever had. He became a direct report to HP CEO Meg Whitman, who's been given the same kind of save-the-company assignment that Steve Jobs faced at Apple in 1996. In this Chicago Tribune article, note the junk bond status, a rating where HP's debt paper began to drift toward in the fall of 2012.
Already Apple's debt has prompted both Moody's Investors Service Inc. and Standard & Poor's to rate the company's bonds at levels so low that analysts such as Chicago-based Carol Levenson of the Gimme Credit bond industry newsletter are calling them "junk."
Obviously, a third fiscal quarter with a $500 million cash drain would take the company down to the near-zero mark and thus be catastrophic. This, you will recall, is how one goes into bankruptcy.
The Tribune article added that "the fight is far from over" at Apple. But it took a revival of innovative design, over more than a decade, to elevate Apple to a state so powerful it could release tablets which would erase HP's laptop sales growth. A proposed split of HP, to spin off enterprise computing from those laptops, came out in 2012 reports from analysts like Therese Poletti at Market Watch.
December 26, 2012
A virtual 3000 leads the top stories of 2012
Analysis by Ron Seybold
First in a series
When summing up the last year of 3000 community news and developments, the story which appears the biggest covered the first 3000 which a manager could no longer see.
Emulator news from Stromasys, whether about ship dates and demonstration, adoption for production, or a free version including HP's MPE/iX, pulled the system's future into the present day. The Charon HPA/3000 became an installed reality at production sites and a free download for the widest share of the community. At the same time, HP's Unix platform shed the FUD from Oracle, thanks to the courts, and cloud hosts clambered into the server picture.
A dozen stories floated to the top of my news view during the past year, some of them related to another, others standing alone in their importance. The year didn't carry a marker like the 2010 end of all HP support for MPE, or the first-decade anniversary of the HP pullout (and subsequent HP3000 Reunion) of 2011. But 2012 marked 10 years of serious migration plans and actions, and we looked for evidence that the greatest share of migrations were ended. Whether a vendor or a customer was homesteading or making its transition, the year delivered that constant element of any IT calendar: change.
Emulator solution: from demo, to adoption, to freeware -- A virtualized MPE server, working as a 3000 emulator, made the transition from alpha test to a springtime beta demo, and finally a production and freeware reality. The last state of existence emerged as a target in mid-year when Stromasys announced new plans for a 2-user freeware version of HPA/3000. It took more than four months to create a evaluator and hobbyist version of the software. Stromasys referenced production status at an Australian company in October. A public webinar demonstration in April showed how an LDEV 1, acting like the entire HP 3000 cradled on a beefy laptop, could be virtualizated in a disk image file -- to reduce the need for further HP iron to preserve MPE/iX.
Oracle is forced to shed its HP Unix doubt-fest -- The 18 months of lawsuits and a trial between HP and its enterprise rival (and database ally) Oracle came to an end with an HP victory. Oracle was tagged for damages to HP's business in an amount still to be specified, after the database giant produced evidence that the Itanium HP Unix platform had a future in severe doubt over the past five years inside HP.
In the end, a judge in California ruled that the software vendor -- whose hardware unit is run by former HP CEO Mark Hurd -- must keep developing for Itanium hosts like the Integrity servers. The news lifted a shadow off HP's only single-vendor alternative being offered to migrating 3000 sites. Without the court victory, HP would've suffered critical wounds to the only platform for HP-UX. At the same time, HP carried its message of an Odyssey for Unix customers outward, one that could bring HP Unix growth to a standstill.
Cloud destinations emerge for migrations -- In a blend of the stories of migration and emulation, the rise of cloud hosting took significant steps forward for 3000 owners on the move. Solutions as complex as manufacturing systems got enthusiasm and serious looks from longtime 3000 vendors. HP's own cloud solution, HP Cloud, went from beta test to SLA status during 2012, with veteran Terry Floyd also eager to make it serve as a host for the freeware emulator. HP Cloud supports Linux (and Windows, but not HP-UX) to give it the penguin cradle needed for HPA/3000. Kenandy Software pulled from the best of MANMAN designs for a 2.0 release of its social ERP solution. At the same time, cloud outages from Amazon Web Services prompted a closer look at system availability.
December 13, 2012
HPQ fights its way back, but riding Icahn?
Hewlett-Packard stock prices made their way out of the $11 range and back into the $14.50 territory this week. The backing for the vendor which makes the migration target environment HP-UX saw a rally of 26 percent over the last 15 trading sessions. That's the period since HP last made a comment or a report on its Autonomy debacle, or the second straight quarter of red ink overall.
After trading 154 million shares during that rock-bottom November 20, HP's fortunes have risen. But for what reason, the analysts are asking. Not on the strength of the HP Discover announcements in Germany last week. HP didn't push above $14 a share until Monday. Its appointment of new EVP Mike Nefkens to lead HP Enterprise Services emerged a week earlier. Its beefed-up Converged Cloud Portfolio made its debut December 4. No seemingly plausible connection there, either.
HP announced its bedrock quarterly dividend of $.13.2 a share as usual, payable to stockholders of record as of Dec. 12. That would have helped get the cart out of the trading ditch this week. But another rumor about the maker of Integrity-Itanium servers emerged over the last few days. Takeover king Carl Icahn might be purchasing HP stock.
Or not, since the 5 percent purchase of outstanding shares threshhold hasn't been triggered yet. Once a stock gets a buyer at that rate, SEC rules kick in and the curtain is pulled away. Nobody knows if Icahn could make a difference to a company whose printer business has stopped growing and whose PCs are now running behind Lenovo's. And some are asking if the legendary activist investor even wants to shake up HP's board.Insider Monkey's Marshall Hargrave thinks that the outstanding HP shares, even at $14, are too big of a bite for even Icahn's tastes. Icahn would have to purchase $1.4 billion of HP stock to set off the 5 percent report.
Although the initiatives and far reach of HP makes it a compelling long-term value play, it does appear to be a bit out of Icahn’s scope and size. While it might not be likely that Icahn is backing HP, we believe that investors can buy in at a relatively reasonable price. HP trades at the cheapest forward P/E (4.1x) compared to Dell (6.2x), Microsoft (8.4x) and Apple (9.3x). Assuming HP can initiate key savings, it very well could trade in line with Dell on a P/E basis given its market share dominance.
Therese Poletti at Market Watch notes that some investors would like to see pressure to spin off HP's server business, including that Itanium line that HP 3000 customers follow -- at times -- when they turn off their MPE servers.
An outside investor like Icahn -- or someone else -- could argue that the corporate business, which includes services, servers, and software, does not need to be attached to PCs and printers. Other have argued, however, that the company gets more purchasing power when buying for all the hardware businesses at once.
HP has argued that "we sell more servers when we sell everything" over the last two years, while its fortunes skidded. Post-Mark Hurd, the value of such a consolidated HP has fallen 70 percent.
It's encouraging to see Hewlett-Packard rally itself, if only to protect the futures of its technology from a takeover sell-off. One of the last things HP divested itself of, tech-wise, was the WebOS environment for tablets. HP-UX is unlikely to ever suffer such a fate as being declared open software. If HP couldn't do it for MPE/iX, just imagine how a product serving big customers will fare.
December 03, 2012
HP Cloud adds SLA as prices drop on Amazon's, Google's cloud services
HP customers who have been patient with the vendor's ramp-up of cloud services are being rewarded one last time this month. The HP Cloud service is moving from a beta period that started in May to a full Service Level Agreement (SLA) version, starting on January 1.
Terry Floyd of the MANMAN services company The Support Group said he received a notice over the weekend that HP is "particularly grateful for your business and feedback as we build HP Cloud Services' portfolio and service offerings. In appreciation of your engagement through the Beta period, we continue to offer the service at a 50% discount off the list price through December 31, 2012. The full list prices shall apply starting January 1, 2013."
Cloud Infrastructure as a Service (IaaS), Floyd said, might be a logical place to host an instance of the HP 3000 emulator, or experiment with the forthcoming freeware version. (We're still listening for news of when that freeware will be an available download.) On the other hand, a cloud instance could be a useful place for a test environment of a new platform for migrating customers. Migration partners such as MB Foster see a future where it will be the rare small- to medium-sized business that hosts its own hardware.
But even while HP muscles up to a 99.95 percent uptime SLA, its competition is racing to a lower bottom line. These aren't small competitors, either: Amazon and Google have been in the cloud longer than HP. Amazon is finishing up its sixth year offering virtual infrastructure.Using the HP Cloud with that SLA will still keep you offline no more than 30 minutes per month. A Medium (4GB RAM, 2 vCPUs, 120GB disk) install costs $116.80/month starting in January, after the discount ends; a Large (8GB RAM, 4 vCPUs, 240GB disk) costs $233.60/month for a Linux installation. Stromasys HPA/3000 runs under Linux. Windows installs cost about 50 percent more. HP-UX isn't supported in the HP Cloud.
Google's cloud IaaS, Google Compute Engine, already costs about 2 cents less with hour compared to HP's rates. Google adjusted its prices downward by 5 percent last month; it will also offer a cloud service with no SLA for 30 percent less.
Amazon cut its AWS cloud pricing for the 21st time as of last month, keeping just below Google's prices with a $0.13/hour rate. AWS is the leader in the cloud field in both customers as well as longevity of its solution, which launched in 2006.
November 30, 2012
It's time to admit that IBM won at being No. 1
It's taken more than 10 years for all of the votes from the business community to be counted. But after HP launched into a campaign to become the world's largest computer company, by buying Compaq in 2001, the enterprise IT legend that HP's chased has finished at No. 1.
Not in company sales, of course. As Kane's financial manager Mr. Bernstein says in Citizen Kane, "Well, it's no trick to make a lot of money... if what you want to do is make a lot of money." The trick HP wanted was to make a lot of profit while increasing shareholder's value. This week we received two pieces of news about that odyssey to be No. 1. Both suggest the game is over, and HP will need to try to win the next, different game.
First, the bond rating service Moody's has downgraded the value of HP's debt paper to just three steps above junk bonds. HP's debt carries the steepest risk ever at a Baa1 rating. This didn't matter as much when HP held so little long-term debt. That's not the case today. About $25 billion in debt is affected, Moody’s said.
Second, the price of HP's stock has taken a tumble all through 2012. It's dropped so low in company valuation that Public Storage of America, a $1.8 billion storage unit renter, is now just below HP's valuation. Hewlett-Packard is the diving blue dot in the valuation chart, and PSA is the green. HP now needs 330,000 employees and $130 billion a year in sales to keep up with a storage unit company's value. HP lost that valuation that's charted there in a little more than one quarter. There seems little chance of regaining it while HP's built the way it is today. 2013's February 21 looks like a genuine fork in the road. HP reports its Q1 results that day.
In this week's New York Times, an op-ed piece written by a CEO contemporary of the Bill-and-Dave HP says it's time to split up Hewlett-Packard. Not to improve its valuation. To save the company, says Bill George, now a professor of management practice at Harvard Business School.Immediate salvation is required, if you read the business press. You could talk about the HP leadership of this era by pointing at articles like "Why HP Won't Fire Meg Whitman (At Least Not Right Away)." If they do, that would be the fourth straight CEO fired by HP. The last CEO who held the job through a peaceful resignation was also the final CEO groomed from within HP's ranks. Wow, Lew Platt: who among us ever thought he'd look like a powerful business leader?
But Platt wasn't made of the stuff that sent HP sniffing after every computer business where it didn't have a lead and wanted it, all in the chase to make a lot of money. That $22 billion to buy Compaq was Carly Fiorina's first brainstorm, but the profits didn't rain down on the company. Then there was the $14 billion spent on EDS, just so HP could puff itself up with a 144,000-employee headcount and compete with IBM's Services business. This too was recently written down.
All that Platt seemed to know how to do was lead an HP that was still investing in enterprise technology. His was the last CEO term where the sensible 10 percent R&D expense was safe on the HP books. R&D grows value in companies, especially ones like HP that can't carry off an Apple turtleneck cool or maintain IBM's ediface reputation.
The only thing that's succeeded in the HP march toward bigness, is, well, bigness. An employee force so large that it could lay off 75,000 workers over a decade and still be larger than it ever has been, paycheck-wise. IBM dropped its PC business at about the same time HP bought up billions of Compaq sales. Add in $10 billion of Autonomy (another writedown, with a swindle story in play) and HP's gotten what it wanted to be. Very big.
But while it drifted from the HP Way, the company watched Apple pass it to become the largest technology company in sales. HP has struggled because it wanted to be IBM and Apple at the same time. Each of these companies outflanks HP in size that matters: valuation and profitability. By factors of 10, or more.
George, who was CEO of Medtronic before he moved to the Harvard business faculty, pointed out that HP's quest to be No. 1 has been costly.
With 330,000 employees and $120 billion in revenue, HP has become too big to manage.
It is really two businesses: a commodity personal computer and printer business and an enterprise systems, services and software business. The characteristics of these businesses are entirely different.
And so while you've been assuming that a very large vendor could deliver very large value, HP's R&D and management have been taken from pillar to post, from PC to IT. That thrashing means that now a storage unit company is worth just slightly less than the creator of the MPE/iX, PA-RISC, Superdome, IMAGE, and ink-jet printing.
Whitman -- for as long as she lasts after a scary 2012 where shares tumbled as steeply as the chart at right shows -- should be tossing in the towel on this fight to be No. 1. She's got to try to bail out a listing ship. George points out in his article that HP's enterprise business demands heavy R&D, "including very sophisticated software (an area where HP is sorely lagging behind IBM, Oracle and SAP), high touch customer service, and an expensive support structure to meet its customers’ complex needs."
In its current form, Hewlett-Packard is a wasting asset, whose value to customers, employees and shareholders is steadily declining. It is time for the board to move quickly to restore its former status as a company everyone can admire, one that can compete successfully in two very different global markets.
There's a game where HP can finish on top, perhaps. It lies on a different field from trying to run a company large enough to be No. 1, while trying to beat two wildly different rivals at the same time. Whenever HP starts playing that new game -- cleaving itself into a $60 billion IT company and a $60 billion PC company -- its enterprise users can look away from this blowout loss that's taken a decade to sink in, after chasing No. 1.
November 28, 2012
As Itanium speeds up, sites fly to Windows
Within the next week, HP's going to ship a new generation of Itanium-based servers. Using the Poulson chipset known as the Itanium 9500, these blade-based systems are going to outperform the current generation of Integrity servers by a factor of 3.29, according to HP.
The engineering gains are impressive. HP tested the new Integrity blades that use the 9500 series against the Itanium 9300-powered servers. Blades start at $6,490 for the 9500-based systems. "For those remaining committed to Itanium and its attendant OS platforms, notably HP-UX, this is unmitigated good news," said Forrester's analyst Richard Fichera. HP's building these new servers exclusively in Singapore, so it can offer three times the computing speed at about the same price.
But even with all that improvement, HP needed to remind the market that these gains were also heading to its Intel x86 Xeon systems. The reason for that reminder: more of HP's customers, such as those leaving the 3000 in migrations, are moving to Windows.
We're not hearing nearly as many reports of migrations which landed on HP-UX systems. The latest news arrived today from Bob Thorpe of National Wine and Spirits. At the Detroit-area IT center, this 3000 pro turned migrator said their customized system is being moved, COBOL and all, to Windows.
"We are in process of having our in-house designed app (using COBOL, IMAGE, and VIEW) converted to NetCOBOL," he said. "We will migrate to a Windows Server platform by March or April next year."
It doesn't matter so much that it took NWS 12 years to leave MPE/iX. What seems more meaningful is that in spite of the Itanium speed-ups, HP couldn't lock NWS into its single-vendor, OS-plus-Itanium environment during those dozen years.The newest Itanium muscle will arrive a little more than two years after HP's 9300-generation Integrity boxes rolled out to customers. These newer blades consume 21 percent less power, led by a new entry-level server, the Energy Star-certified Integrity rx2800 i4.
But dropping the cost of ownership for Itanium has mostly been a pleasure for the existing HP-UX customer. Oracle cast a year's worth of doubt over the chip's future until the courts made the vendor cease, and pledge to support HP-UX and the other operating systems which rely on Itanium. That's one reason HP reminds the market about Itanium's advances and where the improvements will end up: Xeon systems.
With advancements in availability and reliability, HP’s mission-critical Converged Infrastructure will continue to enhance established HP Integrity platforms supporting HP-UX, HP NonStop and OpenVMS operating systems. Over time, these advancements will cascade to mission-critical x86 platforms delivering a single, unified infrastructure for Unix, Windows Server and Linux environments.
That means this "i4" line of Itanium-9500, with its new server blades of a two-socket BL860c i4, the four-socket BL870c i4, and the eight-socket BL890c i4 -- all of these are simply pilot units for the inevitable transfer away from Itanium. How inevitable depends on the customer's trajectory. Windows-bound sites like NWS don't much care how much Itanium can outperform Xeon.
At TechWeek Europe, one writer there interviewed the European head of HP's Integrity business. The website's Peter Judge didn't hear HP expecting to sway many new customers.
According to VP of Business Critical Systems for EMEA Mark Payne, customers still see plenty of performance benefits in the Itanium platform, and would not move across until the x86 platform can match that. Itanium-based systems like Integrity have better mission-critical performance, and users won’t move away until, at the very least, x86 can equal that, said HP.
Unix systems are obviously changing their role in the datacentre, and no one at HP actually suggested they would start to win back business against x86 servers. However, there was a clear expectation that the end of the Oracle lawsuit and the new chips would unlock demand from uncertain customers.
Judge compared the Unix vs. mainframe battles to the future facing the installed HP-UX base. "When we hear that the Unix ecosystem is doomed, we should take some perspective, and expect a similar process to occur. There seems every reason to expect Unix to last as long as the mainframes it failed to dislodge."
HP's message off its own Itanium website shows that it considers "legacy systems" to be its own older Integrity servers. A business case study of manufacturer Steelcase started with the company's use of the Tru64 OS and PA-RISC, then movement to Superdome Integrity. HP seems just as enthused about seeing fewer Oracle licenses needed in the more powerful configuration.
Itanium once had a clear power disadvantage against the PA-RISC chips that drove the ultimate HP generation of 3000s. It took as many as three years for Itanium to catch PA-RISC after the Intel-based systems began to ship. Somewhere in the future of HP's migration campaign, customers like NWS will be hearing more about Xeon systems than Itanium servers. Windows Server, not the Integrity server, is luring migrations.
November 20, 2012
CEO Leo's defeat now complete with loss
HP's stock dove 10 percent this morning on the news that its last big-ticket acquisition lied about its net worth during the 2011 buyup of Autonomy. Aside from the spectacular flame-out of the HP TouchPad and its subsequent fire sale -- and the loss of WebOS futures -- Autonomy was about the only other thing Leo Apotheker could manage while CEO. Manage, it appears, being a term used hopefully.
Now comes the news that HP believes the UK British company it bought for $9.7 billion lied about its finances. Current CEO Meg Whitman didn't call it fraud, but the undervaluation triggered an $8.8 billion write-down of the value of the UK maker of big data software.
Whitman said in a statement there were "serious accounting improprieties, disclosure failures and outright misrepresentations at Autonomy Corporation PLC." The former CEO denied the charges, but the Associated Press ran a story this morning that tallied the tricks that Automony used to fool HP.
How bad is the strikeout? This time HP is asking the SEC and Britain's Serious Fraud office to look into criminal charges. The inevitable HP lawsuit, this time against its own operating unit, is in the wings. The AP story said Whitman revealed "a senior Autonomy executive volunteered information about the accounting shenanigans, prompting an internal investigation." The internal investigator? None other than PricewaterhouseCoopers. HP tried to buy PWC during the Carly Fiorina spree, but the boardroom held that one in check. HP got EDS instead, along with another $9 billion writedown.
The result is the second straight quarter of losses for HP, a first in the company's history. The maker of replacement systems for migrated HP 3000s is having a dark chapter in its turnaround story. Now it heads into a winter season where tablets -- a product HP failed to launch under Apotheker -- will be bleeding sales off the PC business which HP has been using to generate cash, if not many profits.
The turnaround story will have to start in earnest come mid-February. No one knows what it would mean to see HP fail to turn a profit for nine consecutive months. While its cancelled HP 3000 business didn't deliver enough cash to survive the company's new wave, at least HP knew the valuation of the 3000 for certain. After it cleared Y2K, that year was the start of HP's era of buying companies like Autonomy which triggered moves like easing the 3000 out of HP's future.HP's board of directors has been swinging and missing at the business plate for many years. But many of the whiffs were covered by profitable HP Services business and the thrum of PC's meager profits off massive sales. There was a deep count -- lots of foul balls to prolong the outcome, in baseball terms. But eventually that thin-profit cavalcade of PC consumer business is heading back to the bench. HP's PCs are already so desperate for acceptance they're rolling out as knockoffs of Apple's Macs.
Now HP has spent each of the last two quarters writing down massive companies which it purchased. In a flurry of ill-advised and shortsighted moves, the years from 2000 to 2011 were spent shucking off product lines where HP owned everything, including legacy sales, in order to step into areas where billions were peeled off to buy competitors (Compaq), businesses built on a model totally different from HP (EDS, which never tried to sell its own systems at the same time it did outsource work, but needed almost 150,000 people to do it) or software companies whose hopeful rise or valuation turned out to be fever dreams or worse (Mercury Interactive, Autonomy, and other).
There have been some things HP has done from its heart -- R&D -- and done well. Enterprise servers starting with the HP 3000, and then because the 3000 was a winner, enterprise Unix. Its Labs cooked up innovations in printing which remain a revenue firewall against HP's torched-up trials like Autonomy. When you go back to what made HP into a $130 billion computing powerhouse, the most potent return on starter money came from anything which Hewlett-Packard built itself. (Unless you count NewWave software or the HP Touchscreen, efforts that surely didn't cost even 1 billion dollars to fail in the 1980s.)
With the latest news, it's doubtful HP's got any other course going forward but to build. To run the baseball analogy into the ground, it's become a company that can only go out to its minor league farm system: brilliant wizards who cost less than $10 billion pseudo-stars. Purchasing free-agent players like Autonomy is beyond HP's budget, and nobody knows who's smart enough on the board to approve a winning deal anyway. Unless the markets recant, the forthcoming Q1 of 2013 could determine how hard HP's got to run to avoid being chased down in an acquisition.
All of this might not end up affecting the future of those migration platforms. Analysts are saying HP's headed for a split of the company, a spinoff that might right the listing ship to give the vendor time to focus on its own technology and its enterprise legacy. A migrated customer is usually watching cost of ownership or a tech roadmap while making a futures plan.
But the company's Project Odyssey, announced just one year ago this week, is a costly venture designed to preserve that migrated business -- at least the part that went to HP's Unix. There's a limit to how much HP will have on hand to pay for R&D in the coming year. Something like Odyssey might stanch the flow of enterprise business away to commodity Linux computing. Odyssey represents the most likely future for the migrator who wants to stick with HP's technology and heritage.
The former is the most tangible asset HP seems to muster, along with the hundreds of thousands of IT customers who will be hearing the alleged shenanigans and red-ink news. That latter heritage looks worn down this morning. The companies who left HP behind -- even to homestead on its shunned 3000 -- could be forgiven for feeling a bit vindicated on the woeful news. The migrators will supply hope of better management, plus a cheery outlook from Wall Street in the months to come
November 14, 2012
What day is it? Oh, it's THAT day
It's November 14 in the US for awhile longer. If the date isn't significant to you anymore, or you never knew why the middle of this month represented a visionary cliff for HP, let us bring you up to speed. HP announced a five-year plan to the HP 3000's end of life on this date. Eleven years ago.
I know, you must be confused. You've probably looked over at the 3000 in your server closet or the office and had a thought. Hey, this machine has already had it's end of life. How can I still be using it? Didn't HP promise dire consequences and risks galore for anybody using that computer after December, 2006? If the maker didn't kill it off, who's in charge of that anyway?
To assist in marking the anniversary of HP's jump off the cliff, we've assembled a short FAQ.
Who was in charge at HP when they made this decision?
Good question, although it doesn't matter much because everybody's moved on. The CEO, Carly Fiorina, wrote a hardcover book and ran for US Senate after leading HP around for six years. She had a "it's growing or it's going" mantra once the company wanted to buy up Compaq. The high-growth march left HP's 3000 plans on the cutting room floor.
Wasn't it some general manager who decided to end HP's 3000 life?
It was, but don't let anybody tell you it was anyone but Winston Prather. On the strength of a promise to preserve the jobs of people in his division, he told the world "it was my call" to chop off the futures of the HP 3000 at Hewlett-Packard. He might have been the first GM in the company's history to kill off his own product line without any involvement from above. Or, there might have been a series of elaborate PowerPoint slides presented to the VPs who had some access to Fiorina. The CEO wasn't fond of giving much authority away. Prather took the credit for the hit, but he wasn't the single shooter. It's tough to imagine a 28-year-old product line with 25,000 servers worldwide, including some inside of HP's own datacenter, being slashed by a general manager who'd held his job for less than two years.
Prather has taken on work outside of product general management at HP. Christine Martino, the marketing manager whose job involved selling 3000s in marketing, has hung on in something you might have heard of called cloud services. The HP Cloud is up against Amazon's, so there's got to be some real deja vu going on there against another Goliath.
The last general manager who tried to grow the 3000 was Harry Sterling, and the last marketing manager to truly try to sell it was Roy Breslawski. His successor told us that putting Oracle 8 onto the 3000 wasn't going to help, because IMAGE was enough, and advertising wasn't part of her job, either. Things didn't get better for new business on the 3000 from there -- unless you count the dot-com boom that created scores of new high-profile customers in retail and catalog sales. You hadn't heard about those? That doesn't come as a surprise. Nordstrom's just turned off their HP 3000 last year.
I heard the 3000 was dead anyway, and the Nov. 14 stuff just killed it. Doesn't it die in 15 years because of its software?
There are a lot of things that will be dying in 2027, but that 3000 isn't one of them. What will happen depends on how much you need a correct calendar year representation in your software. On Jan. 1, 2028, very novel things will happen to the 3000's timekeeping. But it will continue to keep 60 seconds to the minute, 60 minutes to the hour, 365 days to the year. You just will have to get used to the year looking like "1900," even though it's 2028.
So it doesn't have 15 years or so left?
There's some disk drives that won't survive into the start of the next US Presidential campaign. But what we know as the HP 3000 is really MPE/iX and TurboIMAGE. Aside from that odd calendar year, there's nothing else that's broken enough to consider this a mortal wound. Sorry to say it, but the computer whose life HP was eager to begin finishing off is going to outlive some of the people who tried to kill it.
What about that decision to not move MPE/iX to Itanium -- didn't that doom the 3000?
You probably have heard a lot about Itanium from Oracle. HP's spent a lot of money calling Oracle a liar about its Itanium promises. But in 2012, Itanium doesn't look like it would have provided much help for the HP 3000. OpenVMS got an Itanium port by 2005 or so, but pack a lunch and thick hiking shoes while you look for a VMS owner who feels good about their Itanium protection.
Wasn't there an ecosystem HP was worried about in 2001, so they wanted to warn us?
HP certainly did warn everybody about that shaky ecosystem. Except for some of the biggest software vendors who made up the friendly forest of 3000 tools and apps. There was a problem with the 3000's ecosystem at the time. The real trouble began on Nov. 14, when HP took a public sip of the system's growth prospects and yelled out, "This milk's gone sour." The company had lost its taste for the nectar of the cash cow that was tens of thousands of companies paying for support they didn't use.
What's the big deal about all this anyway? Isn't what HP says about a software's future the way it goes?
Let us refer you to WebOS, from just last year, powering the now elusive HP TouchPads. HP's history in predicting the value of software, and ensuring the same, is not exactly spot-on. Just as the company has promoted and invested in software that didn't stand a chance against entrenched competition, it has also let good technology wither to satisfy larger partners who want to operate smaller development staffs.
So if I have an HP 3000 today, am I running on borrowed time? Whatever happened to that five-year plan?
It became a nine-year plan, with exceptions for customers who still wanted HP to support the 3000. The ecosystem suffered because software companies lost customers who'd lost faith in HP. But a wider array of support providers emerged over those nine years. HP predicted a bubble that would burst. It turned out to be the company's valuation. R&D, the kind of magic that built the 3000's innards, was not a favorite line item in the budgets of HP's CEOs for more than a decade.
Now you're back on years again, so I still don't get it: what keeps that 3000 year machine from running as expected? I heard there was a "sheer volume of application and store data" relying on it.
This is a phenomenon known as the Spectre Temporal Memory Displacement. The 3000 is just a spectre by now, goes the theory. So by the time its calendar runs out of genuine years, it isn't supposed to matter. Except for that "sheer volume" of data, which all will somehow remain crucial and vital. You're supposed to remember at one moment the 3000 is evaporating. At the same time, there's a massive volune of data still important to customers.
Humans are extraordinarily bad at predicting future happiness. It's not a malady that's limited to planning offices in Cupertino, California -- although by the time 2028 arrives, those HP offices will be replaced by already-aging Apple headquarters offices.The only thing keeping the 3000 from running a business in 2028 is a desire from a customer who will pay a wizard to adjust time. Around the year 2000 a product emerged that acted as a Time Machine. Or an HourGlass that you could tip over.
Never mind 15 years from now. About 15 years ago, companies sold products exactly by those names to adjust HP 3000 dating for Y2K testing. If the same wizards eat their vegatables and exercise and take plenty of naps, there's a fair chance that dating will become an online nirvana in the land of the 3000. One 3000 veteran, Terry Simpkins, suggests that if the MPE CALENDAR base year could be changed from 1900 to 1950, that might do the trick.
November 12, 2012
Intel takes Itanium towards Xeon's standard
HP has introduced a new generation of Integrity servers powered by the Itanium 9500 chips, computers which will start to ship in December. For the HP-UX adopter of migration platforms, the Integrity systems have been high-value, high-performing, and high-attraction computers. The servers are blazing fast and a good value for a high transaction box (something crucial to 3000 migrators). They've also been attractive as in sticky. Because taking steps down the HP Unix path has meant treading the tar-pit of Itanium. No other processor will run HP's Unix.
However, Intel is starting to take its own steps to open up the Itanium architecture. With the Intel 9500 announcement, the chipmaker added that there would be shared technology between Itanium and HP's acknowledged industry standard for processors, the Xeon family.
Future generations of Intel Itanium processors will adopt an innovative "Modular Development Model" that enables deeper commonality between Intel Itanium and the Intel Xeon processor E7 family, from shared silicon design elements to full-socket compatibility. This will provide a more sustainable path for Itanium development and greater design flexibility for Intel's partners.
HP itself calls the Xeon server business Industry Standard. When Intel starts to talk about taking steps to sustain Itanium development, it's a sign that the future being sold to HP customers was wearing thin. Oracle tried to prove as much in its attempted pullout from Itanium development, but a judge ruled against that ideal. However, the evidence submitted for the lawsuit trial showed HP's Project Redwood documents were aimed at shoring up Intel's Itanium interests. The project was proposed before Oracle bought Sun, and Itanium sales have gone nowhere but down since then. Those sales have the advantage, however, of still being far more profitable than all of HP's PC business.
This "but it's profitable" perch provided no safety for HP's 3000 plans during 2001. The 3000's sales and installed base were not growing to Carly Fiorina's satisfaction. And so the customers were given an "end of life announcement." In every company's product line, all products die one day -- at least a death of manufacturing. Then there's some loose cannons that cook up an emulator, and heaven knows when the 3000 will see an end of life.
Even if Itanium growth continues to decline, Intel's fresh plans will let the chipmaker keep developing new iterations of Itaniums. However, they're likely to be more incremental than innovative. Innovation requires marketplace growth. In HP's world, as well as Intel's, growth is Xeon's speciality.Yes, there are bona fide technical advantages to the Itanium designs. These are what make the processors a value for an HP customer who's all-in on Itanium. It's a chip family that's been competitive for about seven years by now. It took Itanium three years just to come even with the performance of PA-RISC chips, the ones which powered HP's ultimate edition of MPE/iX iron. The 3000s never got the PA 8900 chips that landed in HP's Unix servers.
Twelve years ago, HP was not yet announcing Itanium IA-64 plans for the 3000. At that time there wasn't even a clear case inside the vendor's 3000 labs, led by Dave Wilde, to get an 8900 into an MPE/iX box.
Do you think you’ll get to an PA-8900 processor in an HP 3000? That’s the last generation anybody’s willing to talk about in a slide. Will you need all that PA-RISC headroom as you watch IA-64 take shape?
We try to understand our customer needs and work hard to understand the HP roadmap, and work to put those together in a way that makes the most sense for our customers and the business. If an element of that is delivering an HP 3000 on a PA-8900, then that would be something we would obviously do. It’s a little early to talk about availability of the 3000 with that [processor]. Watching is exactly what we’re doing: what happens in the overall market, and what happens in the HP product roadmap.
By 2005, at last, a Unix user could finally adopt an Itanium box that could outperform even the 8900 PA-RISC server.
Easier for partners and vendors
However, when you tease apart that Intel announcement of the Itanium 9500 chip line, you'll see a reference to partners. That's software partners as in app builders, and hardware partners including Itanium in servers. Instead of needing to maintain a separate software design team for Itanium and Xeon (we're looking at you, Oracle), developers might reduce the amount of one-off work they do for an HP Unix application. Whenever Intel gets to "full-socket compatibility," then the Itanium chips have a chance -- not a very big one -- to find their way into the higher ends of non-HP product lines. Because when you get out of the HP and NEC product lines, it's the rare Itanium chip to be found on a system's motherboard.
As part of Intel's announcement of the 9500, it mentioned 15 years of alliance with NEC on the chip's designs. Software partners in the release were Oracle, SAP, SAS and more. But these companies also develop for a much larger customer base that uses Xeon systems. Those are computers which HP is also selling to its migrating 3000 customers: HP's ProLiant systems. By working on a melding of Itanium and Xeon, those software vendors may not be forced to choose between resources for Itanium (HP-UX) and resources for Xeon (Linux, Windows).
Make no mistake about who is acquiring whom in this tech merger. Xeon is the larger entity and so will dole out its tech essentials to the Itanium designers. Don't expect that socket compatibility to be an adoption of the Itanium designs, or the shared silicon designs to promote Itanium's nuances on top of a Xeon empire. The whole Intel enterprise will keep HP from being forced to commit to a port of HP's Unix to Xeon, perhaps. That's $147 million estimated by HP that it will save, and maybe drive into Project Odyssey. But the end result of Odyssey is Linux environments, secured better and hosted on Xeon-based hardware -- with all of your favorite characters from the world of HP-UX. Now that HP's promised the best of HP-UX in Odyssey, Intel's gone and promised the best of Itanium in the Xeon family.
These facts about the future are enough make a customer believe, if they're a HP Unix user who's migrated custom code to an Integrity box, that there's a migration waiting out there. We'd guess anytime after 2016, with a 10-year "end of life" countdown for HP-UX. MPE/iX got a nine-year countdown of that sort. Because every product will see an end of its life on a vendor's price list, after all. Perhaps its best elements will live on in emulation, or integration with newer architecture.
November 08, 2012
HP flies its Fink just as Poulson pokes up
Martin Fink because a lightning rod among HP enterprise users over the past year. The former general manager of the Business Critical Systems unit, which has led the HP enterprise sales slide for the last five quarters, was bumped into HP's top engineer spot this month. HP named the man who'd battled Oracle over Itanium, and won, the leader of HP Labs and the company's CTO. Those are two positions which have never been combined at HP until this month. Personnel moves at HP can spark head-scratching in 2012, but this one baffles me in a way that says something about the HP Way.
Fink took the reins of HP's R&D empire just as Intel rolled out its latest -- and maybe the last -- upgrade to the Itanium chipset. Poulson arrives as the Itanium 9500 Series for Mission-Critical Computing. Way back in the history of HP, the HP Labs once worked on the keystone of VLIW architecture, which it once called HP Wide Word. That work was turned over to the Intel Labs while the two companies partnered. Of late, the HP Labs output runs to the world's greatest device fans (and I'm not kidding about the greatness) and experimental designs for chips that couldn't be built in 10 years of continued research and design.
Although Fink's unit will likely spill even more sales blood in the figures to be released at the start of Thanksgiving Week, he's the man that HP's Board of Directors has assigned to lift up R&D in the company. The CEO Meg Whitman has spent much of 2012 saying HP ought to be building tech instead of buying it. Perhaps, since Fink's line of business relied upon a chip and an OS that were built out of HP's wizardry, he'll get the budget to demonstrate a new R&D gusto required for enterprises.
But to start off, he'll want to backpedal on one of his 2011 predictions on HP technology development. It may not be an HP Labs-caliber project, but you'd think he'd head for his engineering throne with a mission to make HP-UX run on Intel's Xeon chips which power the ProLiant series. In other words, to make HP's Unix an industry standard product. Long before Fink grew into a GM, HP-UX was touted as a standard by Hewlett-Packard. A migrating HP 3000 site would do a lot better with a Unix investment if it became a standard. HP calls the successful part of its enterprise lineup the Industry Standard Servers.Poulson is not a standard, not any more than its predecessors were. It might not be the final generation of Itanium, but it could be the last one that will get a chance to win a new customer or two for HP enterprise datacenters. Adoption of HP-UX in new sites is running close to nil, and so the denizens of VMS and NonStop lands (where there is least scant growth) are left to add customers to Itanium ranks. Like the user groups and HP marketers insisted all through the previous decade, technologists don't hold sway over the industry anymore. This is why Fink will go to lead the Labs following a far more technical set of predecessors.
Just in my era covering HP, here's the list.
1984-1986 Joel Birnbaum: A pioneer in the development of distributed computer system architecture; real-time data acquisition, analysis and control systems, and Reduced Instruction Set Computer (RISC) architecture. Birnbaum joined HP Labs in 1980 and became director in 1984. He was a top-flight director plucked from IBM's R&D efforts at RISC.
1987-1991 Frank Carrubba: An inventor of Reduced Instruction Set Computer (RISC) architecture. Led work on the first single-chip implementation of HP's Spectrum precision architecture, which powered HP 3000s and HP 9000s for the next two decades.
1991-1999 Joel Birnbaum: Under his '84-'86 guidance the company further developed PA-RISC, the first commercial RISC processor, and the client-server architecture. In this later term of service, Birnbaum returned as senior VP of research and development. Researchers developed the architecture and much of the technology for pervasive computing, as well as the Wide-Word architecture that became the basis of a partnership with Intel.
1999-2007 Dick Lampman After 35 years at HP, Lampman took over the Labs to manage key research efforts as PA-Wide Word, which was the basis for Itanium, as well as the development of technologies like digital photography that launched new businesses for HP. Under his leadership, the lab played an integral role in transforming HP from an instrument- and hardware-based company to one focused on software, systems and services.
This was a period, however, when HP Software and Services didn't change the landscape the way those chips and environments had. HP's tech word turns away from very wide research, because by 2007 the Labs and HP R&D spending has been eviscerated by CEOs Carly Fiorina and Mark Hurd. So HP Labs gets the message to stop inventing things that will change and direct alliances by putting Hewlett-Packard in a tech-leadership role which others want to follow. By 2007, the Labs are headed by a "serial entrepreneur."
Unlike his forebears, Prith Banerjeee (2007-present) became Labs leader as soon as he joined HP. He was "charged with reorganizing HP Labs to better align its research agenda with HP's overall business goals." And since those goals now deferred operating environments and computer architectures to outside companies, HP-UX and Itanium became minimized players in the tech world. Linux, Windows, Intel's Xeon -- all were preferred by the Board of Directors as enterprise choices. To create, the Labs went even further afield of what its everyday customers needed in research. Instead, Labs delivered "breakthroughs such as memristor research, sensing solutions (CeNSE), optical connections (photonics) and nanostores."
Whether any of that work makes its way into product lines might be Fink's challenge. The emphasis on software and cloud technology will doubtless occupy his plans. How HP promoted a general manager of a skidding business unit, with some unit-level R&D management, into a storied position of HP's DNA is boggling. You can say this much: winning that Oracle lawsuit didn't hurt. But since software is now HP's first love, and the customers Fink's left behind at BCS could really use an HP-UX port, perhaps he'll have an easy and early success at he called a $100 million project in furtive emails about Oracle's Itanium boycott.
It was a non-starter just a year ago by his reckoning. "At this point there are no plans," he said "and I predict that it will never happen. The big problem is the software support and the ISV support for the 5,000 current HP-UX ISV applications. The better model is to bring the HP-UX capabilities to Linux, rather than port HP-UX to x86." And what in the world will happen to those HP-UX ISVs? They'd better be porting to Linux, starting about last year.
HP's press release says that Fink will report directly to his CEO, and "as part of his role, Fink will be responsible for looking holistically at how innovation is created and commercialized at HP." It's not your father's Hewlett-Packard anymore, but that's not news for a 3000 community which might recall moments like Birnbaum's in 1987: When the Spectrum Series 930 3000 and MPE/XL was way overdue, Birnbaum stood in a circle of industry reporters and said that bugs and failures of the new-gen 3000s "will yield to engineering discipline." And not a word was said in reply after that, because HP'ers and even jaded reporters heard the resolve in his voice. Birnbaum was an IBMer before he served HP.
Fink doesn't arrive with zero HP experience like his predecessor Banerjeee. He's 27 years along on Hewlett-Packard assignments, but his battle scars trying to sell Itanium in a Xeon world are part of what his CEO likes about him in this research role.
“Martin’s experience on the front lines with customers combined with his experience in the business units will be invaluable as we work to focus our innovation agenda at HP,” said Whitman. “Martin will ensure that our research and development activity is aligned with our steady focus of anticipating and delivering on the future needs of our customers.”
Fewer memristors, and more engineering that will become distinguishing products. That's the best that the migrated customer now on HP-UX can hope for from a director who graduated with an EE degree from Canada's Loyalist College. By 1995 he'd made his way out of HP Canada and "a variety of positions in hardware and software support, consulting and telecom sales. In '95 he moved to HP’s Ft. Collins, Colo., site to work in HP OpenView telecom, where "he managed small business startup activities for HP OpenView telecom." Here's some R&D management in his CV: Verifone Software Business, and then the R&D manager in the Customer Solutions Organization, "with responsibility for HP-UX, Linux and the patch program."
HP reported on the current bio page for Fink -- it's still listing him as BCS chief -- that he's co-inventor on two patents related to online e-commerce and is the author of The Business and Economics of Linux and Open Source. If a customer had any doubts about what software research in HP Labs might lead toward, the title of that book would give a clue.
The company could use more R&D for enterprise customers, but not necessarily another boost of Realism and Domestication. It's a different world for technology creators that the one which Birnbaum, Carruba and Lampman led. But in the face of the WebOS flameout of just last summer, the need for software superiority seems more likely to revive HP than integrating inventions with commercial craving.
November 02, 2012
Manufacturing Projects with HP Cloud
Hewlett-Packard has been promoting the concept of cloud computing for more than three years, culminating in the opening of its own HP Cloud service this year. This month there's a special offer of 1 TB of extra storage in HP Cloud. It's available by signing up for a Team Account at Gladinet, a provider of cloud storage access solutions. In its simplest configuration, Gladinet is a shared and collaboration workspace like Dropbox for Teams, or Box.
HP Cloud will chip in 1 TB of space with a Gladinet Cloud signup in the deal. There's also a Gladinet Enterprise version that can be modified for more extensive work sharing. But the HP Cloud's got some other possible uses for enterprise customers, perhaps as a means to host the Stromasys HPA/3000 emulator. Terry Floyd of the Support Group checked in to ask about an update on the Personal HPA/3000. Floyd's company supports manufacturing sites running HP 3000s, as well as some non-3000 operations and prospects.
"I recently joined a free partner program for HP Cloud and can supposedly specify what kind of system I want, and deploy anything I can make fly on it… for just a little bit a month," he said. Floyd's working on calculations about how big HP's little bit of cost will be, "and what happens when I decide to pull everything off of it and stop paying." Cloud-based hosting poses this "take-my-stuff-back" issue, one which is new to the 3000 IT manager who's hosted everything locally up to now.
This morning Floyd reported that "I have not activated my HP Cloud space yet. It would take a phone call to them to get the configuration I want – it wasn’t among their standard offerings." One thing that's held Floyd at bay about HP Cloud is the sophistication of the Salesforce cloud offering. "HP Cloud is probably a long ways behind what Salesforce is doing," he said after attending the recent Dreamforce '12 conference.
Salesforce doesn't need the lift of attraction which HP Cloud requires at the moment. HP's Cloud opened for business just this spring, while the Force products have been doing remote hosting of app services for years. But through Nov. 24, the Gladinet trial allows you to access an extra 1 TB of HP Cloud Object Storage as if it were a local drive. HP says that "This makes it extremely easy to manage and share documents, images and videos."
The Team Edition of Gladinet is free for the first 30 days with a minimum of three users per account. Then it's $9.99/user/month. Extra fees are billed for any HP Cloud Object Storage exceeding 1 TB.
Coming from the Force environment, however, Floyd sees a lot more maturity. It's an aspect that will come into play when manufacturing enterprises consider a new ERP platform. Those might not be 3000 sites, but they're pretty likely to be modest-sized companies -- which has often been the profile of the 3000 customer.
The only purpose I had in mind for HP Cloud was the Stromasys Emulator and that’s just a whim. I’m crazy about Salesforce and how they provide security and assurance of zero data loss and very little (almost 0) downtime. At Dreamforce 12 in September, I learned a lot about the internals and cannot believe the depth of their services.
Making a business out of cloud offerings (including the Kenandy Social ERP) looks like it's still in the early days. "I assume it will be the way things are done in the future, therefore I’m trying the learn as much as possible. I learn best by doing something real, so I’ll learn a lot doing the Stromasys freeware emulator," Floyd said.
But cloud computing on such small scales is still competing with low-cost local hardware. For example, instead of using HP Cloud for the emulator, Floyd said, "I just bought a refurbishes HP Elitebook 8470w with 8GB of RAM on an i7 with 500GB of disc. It should do nicely for Personal HPA/3000."
Even the older 3000 iron -- which the HPA/3000 freeware will emulate -- offers a cheap alternative to the HP Cloud. "I could potentially move my EDI business (which is now done on the Series 928 in our datacenter) to Stromasys in the cloud someday," Floyd said. "But that 928 is very reliable, so there’s no hurry that I can come up with."
October 16, 2012
State of HP license transfers alive, kicking
Everyday purchases of used 3000 systems have included license transfers for many years by now. When there's a 3000 license to transfer, of course. Some customers have a host of old 928s they could transfer with legal paperwork. Some have just one server, but it's been in archive-only mode for awhile.
Taylor Lumpkin of Hire Experience is in one of the best license positions we've seen.
We are still a HP Partner, and HP have allowed us to have free MPE for over a decade now. We also own a small pile of 918s which all have legitimate HPSUSAN numbers with the HP license converted into our name by HP, back when they still did that.
But for others interested in a license transfer, the requirements from HP include a $400 fee (US dollars), plus a serious sheaf of documents, either to be signed or presented. The paperwork is no more extensive than it ever was during the post-1999 era. 1999 is the year that Hardware House and a few other brokers were sued by HP for illicit use of HPSUSAN numbers, all to create 3000s out of 9000s or upgrade the user limits. That was back in the day when MPE/iX came with user limits; those were dropped with the 7.0 release of the OS for the newer A-Class and N-Class 3000s.
But some prospective freeware emulator customers have more questions on the details. One veteran of the 3000 platform even wonders if an MPE V license will do for a transfer. After all, MPE is HP's property, but its vintage may not matter. Such stuff isn't covered in HP's webpage on SLTs.The Software License Transfer is an everyday operation that covers HP's Unix licenses as well as those of the NonStop and VMS worlds, in addition to the 3000's. In fact, when you seek out the webpage you'll find that the URL ends in the characters "sltprocesshpux." Perhaps there's a lot more HP-UX transferring occurring.
Chris Bartram, who still owns an HP 3000 or two after more than two decades of development, software sales of Netmail/3000 and more, plus consulting on the platform, wonders about the process.
What's the cost to transfer a license if you do have a legitimate system to transfer from? Is that still $500? How much of a (scrap) 3000 do you need to perform a transfer? Just the serial number and/or HPSUSAN? Can one perhaps transfer a legitimate license from an old MPE/V era system?
Onward to the HP cost details. Examples of the needed documentation, by the way, refer to HP 3000 models on this page.
A cost recovery fee of $400 USD, plus applicable sales tax, is charged per server, per EVA, or per batch of OpenView products on non-server platforms. Sales tax is required for all transfers into/within the US. Sales tax is based on the location of the Transferee/New Owner. The payment should come with the Transfer Request. We can accept checks, money orders, Visa, Master Charge or American Express.
There's no language on the page that addresses if the hardware is scrap -- so long as the license is still alive and un-transferred. This is the Proof that HP requires.
The proof must show the Product Number, Serial Number, User Levels and a list of the HP proprietary software to be transferred. This can be done in one of four ways.
- A copy of the INVOICE for purchase of the hardware and software from HP or an HP Authorized Reseller
- A copy of a complete HP hardware and software SUPPORT AGREEMENT/ CONTRACT
- A copy of an HP PACKING SLIP listing the hardware and software, OR
- If purchased as used, a copy of the SOFTWARE LICENSE TRANSFER AUTHORIZATION - Exhibit F00, signed by HP.
Finally, the details appear below on where to get more specific answers to questions like "What do I do if I transfer the license to the emulator for testing, and then decide I want to run my 3000 in parallel for testing?" We have a pretty good idea what the customers will do, but it's unknown what HP wishes in that instance. It might matter to a customer's auditor, after all.
MS: SLT 4061
19420 Homestead Road, Cupertino, CA 95014
October 15, 2012
HP insists emulator transfers be immediate
An HP 3000 emulator offered to the community for evaluation or personal use will require a license transfer right away, HP's Jennie Hou has confirmed.
A personal, freeware version of the Stromasys 3000 emulator product is coming very soon. It's a 1- E3000 PU horsepower instance, basically a Series 918. It's designed to help customers test the abilities of the emulator. Stromasys already distributes this kind of freeware for its VAX/Alpha emulator.
Hou said HP requires its customers to transfer an MPE license at the time they start to use this freeware product. "The one-to-one license transfer is required," Hou reported.
In 2004, HP outlined the terms for an emulator-only license of MPE/iX. An FAQ created in 2008 stated that 'If "a customer cannot transfer a license from an existing HP e3000" to an emulator installation, can they pay HP $500 for an RTU license to enable that emulator." By this year, however, the only licenses available are the Software License Transfer licenses from existing 3000 systems.The immediate-transfer intepretation of HP's licensing policies could stand in the way of any legal use of the Personal Freeware version of HPA/3000. The vendor's offer of $500 emulator RTU license "has expired and it’s no longer available," Hou said. That license never got used by the 3000 customer base -- because no emulator was ready to ship by the end of 2010, when HP's RTU offer expired.
Interpretations of the SLT process are Hou's responsibility. The vendor's SLT Process webpage states that "The person representing the Transferee cannot sign the Request Form." In the case of an emulator transfer, the person initiating the transfer will always be the transferee, one and the same. It's as if they're saying, "I'm transferring my legal copy of MPE to my new emulator."
But Hou said that emulator-based license transfers within a customer's site present no problem for the current process.
"What the SLT FAQ meant is that the transferor has to sign the request form," Hou said. "In the case of an emulator transfer, the transferor and the transferee could be the same person. Thus, that person can sign it."
There are five parts to a software right-to-use license transfer: the Request, the Proof, the Transfer Fee, the Software License Terms and the Authorization. Each of these five parts must be in place before HP will grant a right-to-use license.
October 09, 2012
Now arriving: Calls for an HP breakup
Hewlett-Packard's stock took another tumble today, the latest bit of insult added to the injuries of the year 2012. Shares closed at $14.37, a low that HP hasn't seen in more than a decade. The sell-off was triggered by an HP analyst briefing you can watch for yourself on the Web. The financial experts are edging toward a consensus that HP ought to become two companies -- with just one of them focused on your enterprise dollars.
More than 150 million shares traded hands at the end of the last week -- Monday was a market holiday -- a volume that HP had seen only once in 50 years of trading: in the shadow of the Mark Hurd ouster of August 2010. All of the high-volume days of trading since then have hammered the stock into the mid-teens. HP has found a way out of this before -- by purchasing EDS and muscling its way into top spots for PCs and servers. Those services and PC plays are gone for good. That chart above only shows the stock slide from February onward.
The breakup calls include a remarkable one from an analyst who says even Bill and Dave would push for an HP dedicated only to enterprise computing. At the Forbes.com website, UBS analyst Steve Milunovich said that activist investors or private equity buyers are likely to split up HP.
In our view, full value won’t be realized by just improving operations -- structural change is required. Based on HP’s history, we think Bill Hewlett and Dave Packard would support this approach.
But the current HP strategy is to try to reorganize its way out of a free fall dripping with quarterly red ink and slipping sales. A full split, Milunovich wrote, would at least push HP's shares to $20. Usually an analyst briefing like last week's produces a modest bounce in share prices. HP seemed to confirm just the opposite, even though its presentation included "The Great Things About HP."
In the past we've reported on HP's stock and fiscal woes with an eye toward warning buyers of HP's enterprise products. You might not want to invest strong in a company drifting into equity buyout or takeover territory. But if a full-on split between PCs, and products like Integrity and ProLiants, takes place then the enterprise might lift up its future at HP.
CEO Meg Whitman has already told the world HP is doing too much and needs to focus. A split up would inject dedication to the kind of customer who owned a 3000 and moved onto other HP platforms. When your only stream of operating income arrives from datacenter customers, their every need becomes a vendor's desire.
Without the split at hand, even Whitman had to admit these woes to the analysts:
- Lack of competitive focus.
- Cost structure not aligned with revenue trajectory
- Accountability and compensation linkage not optimized
- Significant underinvestment in R&D and IT impacting the businesses
- Direct and partner go-to-market model need renewed focus
HP's chief competitors seem to be Apple on the consumer and PC end, as well as IBM on the enterprise end. These companies have something in common. They don't try to spread themselves as thin as HP has. There's no certain floor for the stock at this point -- the rock bottom was $12.20 in the bleak quarter after 9/11. Bill and Dave might have steered clear of selling printers and PCs at all in this kind of competitive market. After all, the company was reluctant to sell computers in 1971, and it didn't discover Windows as an enterprise tool until the late 1990s.
A split-up HP might be selling $50 million less without PCs, and $70 million less if printers got spun off. But as things stand today, the lack of extra cash for R&D because of low-margin PC sales is dragging down enterprise innovations. Things like an Intel-based HP-UX would be a slam dunk for an enterprise-focused HP. Becoming smaller could be the first step to make its enterprise action bigger.
October 08, 2012
Emulator freeware license needs hobbyists
HP doesn't have much impact on the 3000-only customer anymore, but the licensing terms which can matter to auditors are still in force in 2012. Although it's almost nine years since Hewlett-Packard built a 3000, the MPE/iX license tied to every server still carries some barbs.
The terms are "barbs" in sense of hooks or wire, since the audited 3000 owner will see these license items are designed to stick to the servers. You could download a personal freeware copy of HPA/3000 this month, or even next. But as things stand today, HP expects its customers to transfer their MPE/iX license to the freeware version of the Stromasys product. Even if the freeware is just there to experiment with, testing to see if it can duplicate the work of the HP-badged hardware. It still needs a license transferred. That's a $400 charge to test out freeware.
But being an MPE hobbyist might change that.
Jennie Hou of HP -- the last business manager for HP 3000s -- remains the decision maker for this kind of policy. Stromasys CEO Ling Chang, a former HP exec, checked out the chain of command last week. Bernard Determe, Service Lifecycle Planning manager for Enterprise Servers, Storage, Networking and software, said Hou is in his team and has the call on a fresher licensing concept: hobbyist copies of MPE/iX.
HP's Digital group has done this for more than a decade with VMS. The hobbyist licenses are limited to non-commercial uses. That's very good news for the 3000 user who's hoping for a hobbyist license. At least Hewlett-Packard has history of the goodwill needed to create this kind of MPE license.Chang has asked me to lead the effort to encourage HP to consider and MPE hobbyist license. The vendor was ready to extend a low-cost license, which is a step towards a hobbyist license. But that 2004 offer of a $500 emulator license was just an offer. HP tied a 2010 deadline on selling that license, and the vendor wouldn't sell one until an emulator existed. The deadline expired without a single license sold. But HP's intention to support an emulator was clear.
We have about as much support here at the Newswire from migration suppliers as we do from homesteading resources. But there's not much advocacy for the former that's required with HP. The vendor has done nearly everything it can make the exit from the 3000 enterprise easy and cost-effective. To be helpful to everybody, someone has to step up and try to change things for homesteading licenses.
I would like to work on the advocacy with HP to make a hobbyist license for MPE available, "similar to the OpenVMS hobbyist license that HP makes available for the OpenVMS enthusiasts" Chang says. That's a hobbyist license at no cost. In the Digital arrangement, you need to be part of a user group. Connect membership is available for this purpose for the Digital users.
This all might get closer to being a reality with the participation a 3000 owner, user, expert or veteran who'd like to have such a hobbyist's license. The licensing document that would make an auditor happy could well become an interim document -- one that could lead from freeware to Stromasys emulator installations. Think of what 90 days of goodwill through an interim license could buy HP, a company whose CEO is courting enterprise business.
October 05, 2012
How about an MPE hobbyist's advocate?
Who's still on the field for the game between HP -- the owner of MPE/iX -- and the user community? Connect is a user group representing HP customers, but the only 3000 advocates left are on the board of directors. Chris Koppe is past president and current business strategist for Fresch Legacy, nee Speedware. The current Connect president Steve Davidek manages a 3000 shop in Sparks, Nev.
OpenMPE had a good run from 2002-2009, but that's become a volunteer group for online resources like the Invent3K site. The days of advocacy over MPE might be over, some say.
But perhaps not. Stromasys is working on arranging the license and delivery specifics for a personal, freeware edition of its new HP 3000 emulator, HPA/3000. There was once a license offered for that emulator by HP. But the vendor's cutoff date to sell such $500 licenses was December, 2010. Stromasys hadn't even announced its designs by that time.
A license for freeware in HP's Digital VAX/Alpha customer base doesn't face this dilemma. Digital created a hobbyist license for VMS so long ago that HP was still building 3000s at the time. This hobbyist license gives the users of the Stromasys VAX/Alpha freeware all rights to run OpenVMS on that emulator. The same kind of license needs an advocate for MPE/iX users. Even a 60-day grace window to run MPE/iX on the emulator would be a good start.
As members of both Connect and OpenMPE can testify, advocacy is no hobby. Especially not with a company as lawyered-up as HP. But the MPE community now has an ally in a former HP executive, one who has just begun to lead Stromasys.
A hobbyist's license for MPE/iX was discussed during the OpenMPE heyday, but HP never followed through on a plan that would serve former customers like Digital does today. (It sounds funny to say Digital when we mean HP, but the HP staff who are Compaq- or Digital-bred know the distinction.) One of those ex-HP staffers believes there's a good reason for a hobbyist MPE/iX license. Ling Chang is the new CEO at Stromasys. Here in her first week leading the company, she suggested this idea needs an advocate. She nominated the NewsWire.
I understand that for years, there has been a VMS hobbyist license available on www.openvms.org. I assume that this is still the case. Would you like to look into that, and see if a similar approach could be established between HP and the HP 3000/MPE end user group -- led by you?
We'd like to take up that job, even if some might think of it as tilting at a windmill. Publications do operate on other levels than information sources -- like the Le Equipe sports tabloid running the Tour de France. We'll all need to pull together like a cycling team to climb this Category 1 mountain of MPE hobbyist. If you'd like to help, we can use the aid and counsel. Email me, or leave a comment below this article.
October 04, 2012
How LTO Tape Support Won't Matter, Soon
A few weeks ago an InfoWorld article told the IT community that the storage in the cloud was the final nail in backup tape's coffin. Our intrepid author Brian Edminster took a close look at what the Amazon Glacier cloud could do for the HP 3000 user. But it's almost as important to listen to what he's got to say about support of the latest LTO tape devices.
They won't make you need to migrate, if you can just virtualize the 3000 iron.
It's just another example of how an emulator removes the risk of staying on an environment. A virtualized server isn't going to be tied to interfaces from 10-year-old systems, or IO designs first crafted in the previous century.
This used to be a big deal in HP's engineering plans. One of the primary advantages to creating PA-RISC architecture was supposed to be peripheral support. HP figured to be writing and maintaining fewer device drivers if its enterprise servers shared an architecture. PA-RISC just led HP away from the HP-IB interface, something Hewlett-Packard created for instruments, not computers. But in practice, the operating systems still needed specialized engineering to pass data quickly between server and peripheral.
These late-gen LTO-5 tape drives are the kind of peripherals which HP supported more slowly, if at all, during the final decade of lab work on MPE. The first LTO with an HP badge, Ultrium, ran half as fast (160 mb/sec) as the same unit hooked to HP-UX -- because its mandatory MPE interface was engineered for half the bandwidth of the more updated Unix-based servers. HP never made up the difference in speed, and that shortfall arrived right out of the gate with LTO-1. LTO-5 was the state of the art in 2010, two years after HP closed the MPE labs.
Aging backup devices can pose a serious reason to consider a migration off the 3000 iron, if you're bound to an HP-badged box. The media gets harder to buy. The devices become a special case for IT to support -- although there are some crack independent companies who'll service 3000 sites regardless of what backup drives are on the job.
Emulation -- the virtualization engine of the 3000's hardware -- changes all that. Edminster said if a VM supports a device, then the aging artifact of peripheral interface simply goes away. Supporting tape devices was a milestone which the Stromasys emulator crossed early in 2012. "I think that the question of should MPE/iX have support for LTO-5 is largely a red herring," Edminster says.
In a solid virtualization design, whatever device the hosting hardware supports (in the current emulator's release, that's any Intel i7 Core system) is the only thing that matters. And if the cloud replaces tape, fine. But you won't need to rely upon cloud storage just because HP stopped engineering MPE's IO a decade ago. Edminster explains.
LTO-5 is largely a red herring. Why? Because it doesn't matter if the 3000 support it or not. Instead, does the hosting VM support it? My guess is that the only instances of MPE/iX which will survive, in the longest term, might be those which run under the Charon HPA/3000 VM. Since the hosting VM manages the disk images and their backup, it'll all be transparent to MPE/iX as to what kind of medium is being used. That's true if the backup occurs via a 'virtual' tape drive, or even that it's being backed up at all (a backup of disk-image, done by the hosting VM).
LTO was not a project in HP's labs that got extensive 3000 testing victories -- that's to say, a wide scope of software running against it which passed the MPE/iX speed tests. Jim Hawkins, the IO device expert in that lab, says the tests failed to deliver adequate small-file transfers using HP's own backup software, TurboStore.
When Herb Statham of Cerro Wire asked if he could use a LTO-1 Tape Drive on an A-Class 500 HP 3000 with Turbo/Store iX, because his was back was backup exceeding 100GB, Hawkins had one word of advice: Don't.
Hawkins referred to a page of a 2004 HP Communicator, a tech document written in support of the PowerPatch 2 release of MPE/iX 7.5. That's just about the last Communicator that HP produced about 3000 techology. The warning on page 26 sets expectations pretty low for Ultrium LTO. The 215 and 230 models were the state of HP's art in 2004.
Physical connections are to be made only to LVD-SCSI Host Bus Adaptors. LVD-SCSI terminators must be used for devices to function at rated speeds. HP recommends only one Ultrium Tape device per SCSI bus for maximum performance. No more than two Ultrium Tape devices per SCSI bus will be supported. An Ultrium device must never share a SCSI bus with any other SCSI peripheral type.
There's also the matter that there was little support for using MPE/iX to diagnose Ultrium problems .
Most diagnostic support for Ultrium drives comes from HP Storage Works Library and Tape Tools (a.k.a. LTT). LTT does not run on MPE/iX; therefore in some diagnostic scenarios the Ultrium may have to be removed from the HP e3000 and connected to a host running LTT.
So here comes HP LTO-1 technology that was too advanced to work with HP's own backup software. The indie software tools HiBack and Backup+/iX were the only backup apps certified for Ultrium. Not TurboStore, "for the reason of poor performance, especially for small files," Hawkins told me.
But don't interpret that "don't" too literally. It's not that LTO devices of that era are unusable with 3000s. Not at all. Consultant Craig Lalley of EchoTech reports that there's N-Class servers in his client base using LTO-1. Hawkins said the tests against TurboStore didn't pan out, at least for the little things. Like files.
Basically performance may be very much less that "Native" device speed, even slower than DDS-4 in some cases, due to a combination of TSTORE and TapeDM limitations. In fact we'd already seen a bit of a drop-off in TSTORE performance with DLT80/8000.
Thinking about it again, I suspect that customers with a set of very large files would probably do okay, especially if you have the space a store-to-disk backup and then a store of those files to Ttpe probably would be okay.
It's the small files that will get you hung up using LTO-1. Hawkins even shared his lab notes from those tests, for the customer who's tech-savvy enough to want details on the failed proof of concept.
It is apparent from the TSTTOOL results that the larger the blocks being written, the faster the Ultrium device will run. Also the fewer the number of file marks, particularly on smaller block sizes, the faster Ultrium will run. Although the numbers achieved by TSTTOOL are not realistic compared to STORE since no disk IO are required to deliver the data to the tape. It still demonstrated the potential for improvement. Even STORE shows some improvement depending on whether the MAXTAPEBUF option is used. I would recommend that the MAXTAPEBUF be increased to 64, or possibly 128K.
Secondly, the combination of file marks and small block sizes can be devastating. The STORE test with the statistics option clearly shows that the Ultrium and the DLT80 are greatly effected by the storing many small files due to file mark usage between file. I am assuming that the use of file marks is tied to using the SPACE command to moving around on the tape currently.
So, I would recommend that the file marks be reduced or eliminated through the use of alternate positioning commands; i.e., READ POSITION and LOCATE which allows the device to move quickly to any point on the tape. If READ POSITION and LOCATE are considered the tape DMs will require updating as well.
Something not addressed in this investigation that may (or may not) need to be checked: to ensure that the 200Gb cartridge, capable of handling many more files than previous tape devices, does not have any issues handling a potentially large directory size for a tape or combinations of tapes.
If you don't have a copy of that 7.5 PP2 Communicator handy, it's still online at the HP website. Or you can download it from us here, where the link is a lot less likely to go hiding later on. It will probably outlast LTOs 1-4, and maybe even LTO-5.
September 20, 2012
Stromasys unplugs emulator field testing
Development has passed out of a beta testing phase and into sales for the HPA/3000 emulator, according to Stromasys founder Robert Boers. The company is focusing on selling the product, an effort that led people away from kicking tires and onward to lighting the fires of production releases.
"So long as you're running a field test program, everybody is glad to participate," Boers said. "But then nobody buys. So we're pulling the plug on our field testing program."
The personal freeware version of the product will serve as a demonstration vehicle. It's been months since a bug request needed to be fulfilled, Boers said.
The product is stepping into an ecosystem where resellers are still providing upgraded 3000s at costs well below any of HP's 3000 list prices. But even those larger servers represent a proven solution which has tangible performance limits. So far, the embrace of the HPA/3000 emulator for PA-RISC 3000s has ramped up slowly. Outgoing CEO J.P. Bergmans said customers are ready to take their emulators from test to production status. Some are checking results from their 3000 hardware off a month-end closing against results from the HPA/3000.
“They’ve been running in parallel,” Bergmans said. “People want to see the same report executed before they take a decision.” But this kind of test represents the confusion over HPA/3000. Some companies who want to compare results don’t understand what the emulator product does in its design.This virtualized server replicates the PA-RISC hardware, which makes comparing report results between a 3000 and a virtualized server no crucial test of HPA/3000. Any MPE and application errors which take place on HP’s hardware will also take place on an emulator. The best designs strive to emulate everything — bugs as well as features. “But if that month-end test what it takes to convince them that the emulator runs the same, let it be,” Bergmans said.
Bergmans said technical issues around hosting an instance of a virtualized 3000 server, one which would be located in a cloud service, are nearly resolved. This matter doesn’t involve the security of customer data — it would be covered by a typical Service Level Agreement of the hosting provider. Instead, it concerns the security of the code which makes up the emulator. “Because it’s related to security, I can’t really explain what we’re testing,” he said. “it’s like the Army: they never tell you where you are while in combat.”
A hosting service such as Amazon’s is a possible place for the model which was called Son of Zelus to reside. But “we need to complement it with some access control to block the code which is running.” The issues of protecting the unique HPSUSAN ID codes for each HP 3000’s MPE/iX licenses are also being addressed, he said.
Licensing of applications for the virtualized 3000 remains a personal matter for customers to arrange, however.
Bergmans said that the initial customers for the emulator have arranged their own licensing of 3000 software for their installations. HP offers an emulator license for MPE/iX at $500, but the vendors of other software elements will be negotiating with customers' companies on a private basis, at least at first. Stromasys has no plans to arrange emulator licensing for independent software products.
“Dealing with the licensing is something that Stromasys will help to do, but we will not do it by ourselves,” Bergmans said. “Our own customers are the application vendors. In the two cases of our [impending sales] there haven’t been problems.”
September 10, 2012
HP reports new job cuts as computers slip
Hewlett-Packard gave notice this week that its job cut program will run 2,000 employees larger than forecast back in May. The total reduction in HP's workforce will run to 29,000 by the end of fiscal 2014, according an Securities and Exchange Commission filing. HP has already seen more employees take enhanced early retirement (EER) than it expected.
Those early retirements are part of HP's workforce reduction plan. Some of the enterprise talent is being forced out, while others are taking HP's EER offer. Bob Chase, an experienced Business Recovery Specialist in HP Support, started his own consulting practice after a WorkForce Reduction. Chase counted 16 years of HP experience including years of 3000 support. The company expects to spend $3.3 billion on workforce reductions through October of 2014.
At the same time these fresh cuts were announced, analysts expect to demote HP out of the top spot in computer shipments. Although HP has been left far behind in computer company measurements of market cap, as well as total sales (both figures eclipsed by Apple), until this month HP had shipped more computers per quarter than any maker.
But the IBM spinoff of its PC business, Lenovo, is poised to take first place from HP. Even as HP tries to capture and retain the 3000 migration server business, its biggest revenue generator has slipped. HP shipped more than 13 million business servers and PCs in the second quarter of 2012. The September figures for PCs will change that, confirming a slide that Dell has also been experiencing -- even as HP tries to retake some sales with Apple-like designs.MB Foster's Birket Foster -- whose company has tracked PC issues even longer than it's offered database extractors and middleware connecting PCs and 3000s -- says it appears the market's enterprise sales have taken a hiatus. He noted that Dell's earnings on desktops and business servers dropped 10 percent in its latest quarter. That vendor once battled with HP for top PC sales spot, but that all ended after HP merged with Compaq. Now both Dell and HP have seen the curse of Moore's Law hit their sales.
"There may be something going on where the economy is just not spending on infrastructure," Foster said, "because Moore's Law says they can skip two more years and do their systems refresh then." Moore's Law promises that processor speeds, or overall horsepower, will double for computers every two years.
HP's still trying to capture fresh sales of desktops by releasing new products like the Spectre One, a new all-in-one desktop that bears a near-identical look to Apple's iMacs, right down to trackpad and keyboard. But Foster says that the enterprises which lifted up Dell and HP on laptop sales "are in some cases giving people smartphones instead of laptops. Or iPads, once they get around the security problem. Somebody will figure it out, and there's billions to be made in this."
Sales of HP's desktops and laptops worked in tandem with enterprise servers, during the years when they were working. HP booked enterprise business because it provided the down-line desktops and laptops, too. Those laptop sales helped smooth the choice of HP in markets like Unix, where there continues to be plenty of competition for a declining marketplace.
HP rolled out a press release in advance of new all-in-one models shipping by November, one which promises the vendor will even try to climb back into the tablet market. "Additional PCs and a tablet made for business will be announced in the coming weeks." The company's strategy came in for some hard commentary from Om Malik, whose GigaOM analyst network tracks the devices both HP and Dell have been trying to keep in the mainstream.
HP's pivot to enterprise servers represents a diversion, Malik said, from a failed mobile offering.
Dell, in fact, is no different than HP which also has blown the shift to mobile and now is trying to do a comb-over by using cloud and enterprise as its areas of focus. They are tied at the hip with Microsoft and its operating systems and as a result they cannot look beyond Microsoft. The fact is that both Dell and HP have offered consumers pretty much nothing in terms of innovation when it comes to PCs. Compare that with Apple and Samsung and you start to see that these two PC giants have been essentially twiddling their thumbs.
September 05, 2012
HP's migration target gets Oracle green light
After spending almost a year and a half telling the world that HP's Integrity servers are doomed, Oracle has changed its message. In the face of Hewlett-Packard's win in a lawsuit against Oracle, the database vendor looks like it will back off the warnings and continue to service the future of HP's Integrity users. Those users include customers running HP-UX, a frequent choice for HP 3000 migrators.
A second phase of that year-long court battle begins soon. A jury will decide what damages to award HP, if any, in reparations for that 18-month campaign against Integrity. When a preliminary decision went HP's way on August 1, Oracle continued its campaign, promising to appeal Judge James Kleinberg's ruling in the Superior Court of California, County of Santa Clara. The ruling became final August 29. As of a Sept. 4 statement, Oracle has dialed back the doom.
Previously, Oracle announced that it would stop developing new versions of its software on Itanium microprocessors. For example, that meant version 12c of the Oracle database due out in early 2013 would not be available on Itanium.
However, a judge recently ruled that Oracle has a contract to continue porting its software to Itanium computers for as long as HP sells Itanium computers. Therefore, Oracle will continue building the latest versions of its database and other software covered by the judge's ruling to HP Itanium computers. Oracle software on HP's Itanium computers will be released on approximately the same schedule as Oracle software on IBM's Power systems.
IBM and HP are Oracle's leading competitors for non-Linux business server installations, so the "as soon as IBM gets it" timeline might be a fresh way to drag development feet. Oracle hasn't started to campaign against IBM's Unix and OS400 platform hardware, Power. However, you can still find Oracle's pot-shots about Itanium on the corporate newsroom webpages.
As recently as six weeks ago Oracle said "we became convinced that Itanium was approaching its end of life" and therefore pitched the anti-Itanium case to shared customers of HP servers and Oracle databases. "HP's argument turns the concept of Silicon Valley partnerships upside down," a statement from August 1 still reports.
Customers of HP-UX servers might feel some relief that Oracle has relented. The database is the most widely installed DB on HP's Unix, including some sites which moved from the Ecometry app on MPE/iX to the Ecometry Open version of the ecommerce programs. Oracle's departure from Integrity's futures was labeled an attack on HP customers, according to the Connect user group and its 2011 president Chris Koppe.
Non-Oracle solutions have been popular with 3000 migrators, however. Eloquence databases have a work-alike IMAGE-3000 mode, and Marxmeier Software has been installing the product across Unix, Windows and Linux customer sites, as well as serving ISVs such as Summit Technology's credit union vendors. That product which was once called HP Eloquence -- so close was the relationship to the HP customer -- has been offered to migrators since the earliest days of the 3000's transition era.
PostgreSQL, another alternative to Oracle's database, was being talked up by HP during the past year of the Itanium battle. For its part, IBM sells an Oracle alternative with deep roots in mainframe-sized enterprises, DB2. For the time being these two Oracle competitors will maintain their places as Oracle partners in the database market.
HP sued Oracle for breech of contract after a March 2011 Oracle statement shutting down Integrity development. Relations got testy between the two companies after Oracle hired HP's ousted CEO Mark Hurd in September 2010. The settlement between the companies about that hiring included a clause to continue Oracle's support of Integrity. Oracle battled that language but lost, after presenting thousands of pages of internal HP documents that detailed the planned demise of Itanium (click on the graphic at left for a screen capture of Oracle's website details).
HP remains steadfast in its plans to keep HP-UX on Itanium exclusively. The only window of escape for the Unix environment seems to be in a port of its leading features to a hardened version of Red Hat Linux. HP's called that effort Project Odyssey.
August 27, 2012
The Security of a Slenderizing Supplier
Over the last three business days, the world's investors and computer customers have watched results of a radical slenderizing program. Hewlett-Packard is taking its early steps on the treadmill to becoming a leaner provider. Its most radical move just resulted in shedding all of its profits for the quarter that ended in July. HP's going to sweat out its extra weight, one 90-day period at a time.
This time around it was HP Services that forced Hewlett-Packard to drop pounds. The vendor had been eager to jump into lucrative outsourcing business since early in the previous decade. After the board of directors killed off Carly Fiorina's plan to acquire Price Waterhouse Cooper, a few years later EDS became a part of HP, at a price of $14 billion. Writing off $8 billion of that outsourcing business as lost goodwill just pushed HP's earnings into the red.
HP's numbers showed that it was the first time in more than a decade that HP put red ink on the bottom of its balance sheet. It was the largest loss HP ever recorded in a single quarter, and only the third in the company's history. But the $4 per share loss was a sign that HP's slenderizing is serious. Its CEO Meg Whitman has said the company needs to do less, in the hopes of doing what remains even better.
But you do want a leaner HP, if you're sticking with this vendor. You just don't want it to lose the muscle of enterprise computing, the datacenter tech business, while it gets smaller. Today HP's stock closed at $17.21. You have to go back more than nine years to find a close that's lower, back in the 2002-03 era when the business world was digging out from 9/11's disasters. HP's market cap has slimmed down to just 5 percent of Apple's, and 15 percent of IBM's.Enterprise numbers from that slenderizing quarter didn't look good. HP's efforts at selling HP-UX, Integrity or other vendor-proprietary products have been on a crash diet. Nothing is dropping faster at HP than sales of the Business Critical Server products, slimming down another 16 percent over the summertime. Despite moves like winning its lawsuit against Oracle to claw back database futures for Unix, or introducing the least-costly NonStop server ever, BCS isn't going to rebound. HP admits it while it talks about futures that include Intel Xeon chips for Unix's best features.
There's going to be some hungry quarters ahead for investors seeking profits off HP. The company has fully embraced the big-picture of its slenderizing by clinging to non-generally accepted accounting practices (non-GAAP) for its 2012 forecasts. There's billions in losses mounting up right now, about $2.55 per share over the year using GAAP results: that's everything that's really going on, and going overboard to reduce the weight of Good Ship HP. But HP's going to focus on the non-GAAP results and point at a $4.05 per share profit over the year.
How's that possible? The company is going to "exclude after-tax costs of approximately $1.80 per share, related primarily to the amortization and impairment of purchased intangible assets, restructuring charges and acquisition-related charges." That's reducing its workforce by eliminating experts in its Business Recovery support centers. That's writing off the value of things like EDS. That's swallowing losses in businesses where the recovery will never surface, like the tablet market that's sent HP's PC growth reeling backwards.
These are single-time events. HP's doing the purge of its businesses which aren't profitable, but that doesn't include consumer products yet. Not as long as ink remains the highest profit item in HP's lineup. There's security in seeing a company slim down to a competitive weight, so it can battle for datacenter dollars in midsize companies. HP's not showing enough of that security yet. The things it's doing well are not always a match for what a classic, datacenter-based customer of that midsize needs.
When you look at our performance during the quarter, there were things that we did well and there were things that we could have done better. Looking at the positives for the quarter, Storage, Networking, IPG and Hyperscale servers delivered solid results.
Whitman's comments last week referred to Hyperscale, a product line that elates customers like Facebook, but doesn't have much connection with a $100-$500 million manufacturer of goods or processes. That's your typical HP 3000 customer. The Storage and Networking successes are muscle to power the bones of a datacenter design. Those IPG improvements are in printers, HP's one consumer business still showing a little growth.
The numbers from Q3 showed "the largest quarterly loss in HP's 73-year history. It will be only the second quarterly loss that HP has suffered during the past 15 years — a mostly rocky stretch for the Silicon Valley pioneer," according to AP business writer Peter Svensson
If you're keeping score, you can count back 13 years to mark the arrival of the first outside hire to lead HP's boardroom, Carly Fiorina. The decisions since then have been designed to make HP the biggest gainer of businesses, rather than business. Now the company is lopping off segments that either stopped producing profits, or never did.
Fifteen years ago HP still operated vendor-specific businesses like PA-RISC servers, MPE, its own Unix and more proprietary tech for the enterprise. It did it at a profit, rather than purchasing customers. Any reducing plan will be fraught with moments where a dieter is hungry but needs real nourishment, instead of the empty calories of a Big Data vendor like Autonomy.
HP can't hope to maintain the number of large servers it sells. Improved efficiency of servers will work against the vendor's revenues, but they can make that leaner HP stronger for its datacenter customers. There's security in knowing that your core purchases are the sales goal of your biggest vendor. You need to buy what they're eager to sell. If that's not coming to pass at HP, then the magic and mystery of cloud computing -- a product so slim you can't even see the servers -- is next on the enteprise diet.
August 24, 2012
HP support veteran joins workforce for hire
In 2012, it's a tougher world out there for an IT pro. We’ve heard from business analysts that the best thing for any of us over 50, upon getting furloughed, laid off, or Work Force Reduced, is to open our own business. For some, it's a better chance to work than to be hired again.
HP’s cutting 27,000 jobs over the next two years. Some extraordinary skill in HP enterprise business servers is leaving the company.
Bob Chase started with MPE in 1987 and came to HP in 1996. He extended his skills to land a place as an HP Business Recovery Specialist, part of HP’s support group out of the Atlanta area. “In 2010 I was offered a position as a hardware BRS for Superdomes, blades, and all the Integrity and PA-RISC platforms,” he says. “It was quite a challenge, as I took 35 internal HP hardware courses over four months and began working calls." But after making a transition to Superdome and HP-UX support, he’s had to leave his employer.
After 16 years at HP, I was Work Force Reduced in early June. I loved supporting the 3000, as my first computer job was as a Computer Operator making $4 per hour at my dad's employer. I was 19 years old. It was a Series 68.
Considering the IT world of today compared to the late 80's, I have great doubt that my career path could be realized today. Off-shoring, consolidation and mergers make it a greater challenge than ever before.
Chase has opened up Chase for Hire, an independent consultancy. He believes that MPE “was an OS that left the enterprise too early.” And regarding prospects for Itanium and HP-UX, an industry-standard path to the future, away from Integrity, seems clear. There's an echo of MPE's later lifespan in the future for Unix. HP has spread more talk of Linux for the enterprise now.
Industry Standard Servers are the future as of 2012. Commonality for the enterprise seems to be paramount, more than a vendor specific/proprietary OS solution. Linux flavors will be the benefactor from this.
Chase believes that "Oracle drives the database enterprise just as well as Microsoft SQL Server, "but I think Oracle is in a better position than most realize. Engineered systems, incorporating Oracle 11g with Oracle "Sun" hardware and their own Linux flavor, makes Oracle in my opinion the dominant player moving forward."
He's been in IT long enough to mix modern Unix and blade experience with acoustic coupler use.
I was learning MPE V in the summer of 87, and had an acoustic-coupler for Predictive Support and a giant line printer for nightly reports and a single-spool tape device. I used four gigantic disk drives whose legs I'd have to anchor down prior to weekly batch processing. I would read the industry trade magazines in our small four-person IT department. I was fascinated with the technology and its cool-sounding names. Offsite backups in this era meant I took the 2400-foot magnetic tapes home in a tape case, all three of them! I'm still in touch via LinkedIn and phone with my original MPE manager, Larry Works, some 25 years later.
He’s also a writer, a practice that for him is “tranquil, never a task to disdain. I write about my youngest son Patrick, age 10, who’s on the Autism Spectrum."
I keep a blog about him. He's an incredible young boy. The site was set up initially to help other parents of Special Needs children with resources and to share our story. I founded some LinkedIn Groups in this area, and also some Facebook groups focusing on county-based Special Needs stories.
At HP I was able to set up a site for other employees who care for Special Needs individuals. An HP ERG (Employee Resource Group) was being formed to further awareness of internal/external resources. With Autism being so prevalent in society today, I knew there were other HP employees facing similar situations that might benefit from this.
August 21, 2012
First 3000 steps: chasing HP's Mighty Mouse
Twenty eight years ago today I took my first steps into the world of Hewlett-Packard. I stepped from the workdays of a small town newspaper editor to the monthly quest for news of bits, segments, and mice. When I walked into the Austin office of Wilson Publications, creators of The Chronicle (we didn't dare to use "HP" in the title) I found wood-paneled walls around a desk with no terminal, no keyboard, and no clue about a new HP 3000 coiled and ready to change the system's reach.
The new Series 37 Mighty Mouse was revealed to me and managing editor John Hastings about two weeks after I'd assumed the reporting and writing for that monthly tabloid, just eight issues old at the time. We opened the mail on September 13 to learn of a minicomputer covered by our arch-rival, the Interex user group's InterACT magazine. We'd never seen a Mighty Mouse, and neither had InterACT's Sharon Fisher. But InterACT got a pre-briefing on the first business computer HP ever built that needed no computer room or operators.
Being scooped in your first issue is a humbling way to start a news job. But as a dewy lad of 27, I chalked it up to the lack of newsroom practices at Wilson and began to lift my wings onto the radar of Hewlett-Packard. HP was a company so small at the time that its total quarterly sales were less than today's profits from 2012's last quarter. The $6.4 billion company had a total of five US PR contacts to cover every product in the lineup. It also had several thousand products and more software than it knew how to nurture and improve. But that Mighty Mouse was a shot across the bow of the fleet of personal computers already riding the waves of change. HP said the Series 37, priced at under $20,000 in bare bones, was an alternative to what we called microcomputers.
It can operate in a normal office environment. It looks like a two drawer filing cabinet sitting beside a desk. No air conditioning, special temperature control, or unusual electrical requirements are needed. It can be placed in carpeted rooms. Moreover, it's very quiet; HP claims it makes even less noise than a typewriter.
Longs Drug, I learned by reading my competition, was going to install more than 150 of these Mighty Mice among its hundreds of stores in the Western US. At that time a microcomputer was strictly a device for personal computing, rarely networked with anything. HP wanted businesses to purchase HPWORD, running on the 3000 for office automation, and HP DeskManager for the 3000 to tie workers together with internal mail and document exchange. Thousands of dollars worth of software, piled on top of that $20 grand.
Just outside the door of my paneled office in Texas, we ran a Columbia PC with a 300-baud modem and WordStar, plus PC 2622 software to make that micro behave like an HP terminal. We dialed up to timeshare with a 3000 at Futura Press, where our stories were set and then delivered back to us in galleys which we waxed up and pasted for tabloid layout. It would be another year before we'd even get Compuserve to link us to the rest of the computing world.
Like a lot of businesses, Wilson and The Chronicle relied more on the steel filing cabinets the Mighty Mouse mimicked in size. We had phones and transcription machines, though, and I had the fortune to mess up editing a story which brought me closer to a preeminent community creator. Mistakes, hubris and getting bested will make a perfectionist spend longer hours trying to learn to avoid subsequent embarrassments.Hewlett-Packard didn't think much of any other environment for its business computing on that August afternoon. Its HP 1000 RTE environment was focused on real-time controller computing. Its HP 9000 Unix servers were workstations serving scientific and research customers, mostly, plus the labs connected to the major manufacturers running HP 3000s. But The Chronicle had me covering it all, from RTE so buried that some customers didn't even know they had one embedded in their systems, to the HP 9000 still running a Unix OS that writers of the day were calling an experiment which needed standards to become significant.
The HP 3000 community was the one I could call upon, literally. I didn't know enough about what we'd call enterprise computer systems to contribute much analysis, but I wanted to earn my keep with interviews and editing. A comprehensive technical paper, printed out on tractor-feed paper, lay in the in-basket, written by Adager's Alfredo Rego. I tore into it with a red pen, thinking I was improving it. But misguided economy of English yanked the paper away from Alfredo's intentions and accuracy. Within six weeks he traveled through Austin and gave the local user group entertainment and enlightenment, all while telling me that leaving good technical work unmarred would have served everyone better.
Alfredo was gracious in his corrections that afternoon, because it seemed important to both of us to get things right from the beginning. Once my ears and cheeks stopped burning I took a closer look at the relations between tech writers and an editor still learning HP 3000 landmarks. HP was fighting hard against the tide of IBM and Compaq micros which were landing in businesses for less than half of what a Mighty Mouse cost. That $20,000 price tag was for a system with 512K of memory and 55 MB of disk. Oh, and "HP's usual 90-day warranty." The cost of support for the system was nowhere to be seen in that InterACT article.
HP dubbed its Mighty Mouse part of "a plan called the Personal Productivity Center that will integrate HP's 3000 and personal computer products." The latter was called HP 150, running a variation of CPM instead of the widely popular MS-DOS. It was a touchscreen computer with little but HP software which could use the touch capabilities. When we got one into the Chronicle offices it was a marvel -- but the KayPro portable micros were where our stories got banged out, doing work that created less noise than the IBM Selectic used when I'd written for that small town paper.
The rich resource I didn't expect on that hot wood-paneled afternoon was the ardor of the 3000's experts, developers and user group leaders. They hadn't been interviewed in newspaper style and were glad to help a cub reporter learn something about MPE/V, enough IMAGE to make his eyes glaze over, and the jungle thicket of peripheral hardware needed to link computers together and get them backed up and printing to dot matrix devices. HP's LaserJet was just out by that summer, but laser printing was a novelty few businesses used at the time.
The Series 37 was new, but scarcely as fast as the Series III which HP had released more than six years earlier. HP went for small and less costly rather than improving power; it had its Series 68 powerhouses to do the high-transaction and forest-of-terminals work. But the Series 37 drew a fraction of a 68's electricity and didn't need raised flooring or special cooling or heavy-load wiring. Whether it needed an operator, as HP claimed it did not, depended on how much a business did with it. At the Longs stores, the 37s were confined inside mesh cabinets with just a slot open for backups to the cartridge tape drive. Administration was taken care of at the Walnut Creek data processing HQ.
What made the Mighty Mouse a breakthough was the way that a large company like Longs could rely upon the uniformity of the 3000's environment. A senior tech analyst Tom Combs told InterACT nothing but a 3000 was going to work to serve what'd eventually be hundreds of stores.
Combs explains that it's difficult to find computers small and cheap enough to run in multiple stores that will also run the same software as larger models. Not all IBM computers, for example, use the same operaing system. Personal computer were not considered for the same reason. When different models all run the same software, he maintains, software development and support becomes easier.
And Longs, like so many large customers using this smallest system, had its own software developed for managing its business. Relying on IMAGE everywhere and MPE/V that was backward compatible eventually became the differences which let those Microsoft-based PCs, then Unix, get into the hearts and minds of cost-sensitive businesses. But the IMAGE and MPE distinctions with industry standards didn't matter in 1984. Getting everything from one vendor working together, reliably, was the miracle that filtered down to that magic $20,000 entry price tag.
At SuperGroup Magazine, an article that best explained the system got itself scooped by my own fledgling story of six months earlier. But D. David Brown reviewed the box as a systems manager would, and he understood that HP had sneaked in a big-style computer inside a compact box with the Mighty Mouse.
This toy-like box is really no toy at all. It's a serious, down-to-business mainframe, and at the same time a painless entry point to the HP 3000 world for a small user. The upward growth path is virually unlimited. HP reports that as of April 1985, 2,000 Mighty Mice had been shipped, beating HP's projections by 20 percent. HP has finally gotten the small business user what he really wanted: A genuine HP 3000!
The fall of 1984 was a time of serious transition for both HP's business computing as well as my own journalism. Like a government reporter just moved into a small town, I had to earn the trust of both luminaries like Alfredo as well as the steady attention from officials at HP. It was like the first weeks of covering a county seat in Texas, where the county clerk and the city clerk become your lifeline to news as well as contacts. The 3000 was scampering into the realm of PCs with the Mighty Mouse, as the vendor assumed that a smaller mini or mainframe would satisfy small businesses.
The Mighty Mouse did satisfy the 3000 customer who wanted affordable models, those with a data processing staff instead of office managers. But orders of magnitude more managers were choosing IBM and Compaq PCs for their offices in the middle '80s. Compaq and ATT, not Hewlett-Packard, got the business for office computing at The Chronicle. We relied on the community's developers, user group leaders, experts and vendors to teach our readers how to automate and administer. Those HP Mighty Mice of 1984 were going to be caught by HP's Spectrum servers in about four years' time -- when I could place a reporter in HP's next press conference which introduced a computer breakthrough that HP wasn't shipping yet.
August 20, 2012
Red-ink hawks circle HP's quarterly news
Somehow, HP expects to manage to take a declining PC business and an $8 billion writedown in the same quarter, pay for early retirement benefits while it cuts jobs, and then report profitability of about about $1 per share. It takes a sharper accountant's head than this business writer's to tote up PC sales reductions plus billions in a writedown and sum up to profitability. If HP hits its marks, the company would register more than $1 billion in profits for the period.
But that's still likely to be the lowest tally of earnings ever since HP purchased EDS for $13 billion and began to call it HP Services. News media company Berzinga published this forecast of HP's Wednesday afternoon numbers.
HP is expected to report that its fiscal third quarter profit fell 10.9 percent year-over-year to $0.98 per share. That EPS estimate inched up a penny per share in the past 30 days. Analysts have underestimated HP's EPS in the past seven quarters. The Palo Alto, California-based company, like Dell, has faced dwindling PC sales, and analysts on average expect revenue for the quarter to total $30.1 billion. That would be a year-over-year decrease of 3.5 percent. The company is scheduled to share its quarterly results late Wednesday.
Whether there will be red ink on HP's balance sheet for the first time in more than three decades, the company's reach into every aspect of computing looks like it's draining the profits pool at a record rate. Decisions to purchase Autonomy at almost $11 billion, plus that abortive entry into tablets with last summer's TouchPad have taken their toll -- all while the concept of selling datacenter-grade hardware into customer shops keeps losing traction. Cloud-sourced IT, or the near-shoring of computing, is sweeping into longer term planning. With its buy-ups and expansions, HP has become the largest IT datacenter company in the world. As one 3000 vendor who believes in the long term view says, "When you're the biggest, the only place you've got to go is down."That's an opinion from MB Foster's CEO Birket Foster, who's happy to weave economic analysis alongside IT planning. While HP's results will certainly show a continued drain of profits, Apple used this week to accomplish a fresh ranking as the highest-valued company in the world. But that $662 share price is not all datacenter business, even if Bring Your Own Device (of the handtop variety, as Foster calls it) has been driving enterprise user business growth. Apple's become a mobile computing company with ideals to tie all of its customers to an iCloud. However, it's got no Big Data or Business Intelligence products, or even a Services Unit like EDS that could bring along massive outsourcing contracts from the likes of Proctor & Gamble or Ford.
Of course, HP's Ford outsourcing business is now disappearing at the hands of departed HP CIO Randy Mott. Now the IT chief at Ford, Mott is bringing all computing back inside Ford's datacenters and away from HP's contract. Mott's mantra was centralization while he steered HP's own IT, consolidating 85 datacenters down to six.
Computer companies juggle complex choices to make while they try to maintain growth in profits and revenues. HP considered spinning off that PC business in the wake of the TouchPad disaster, but turned away. The details for such choices are hidden from even sharp financial analysts, although securities regulations demand some transparency. HP's troubles lie in a decade of poor decisions from its boardroom -- where becoming the largest vendor of IT seemed to be the main goal from Carly Fiorina's arrival through Mark Hurd's reign and even into Leo Apotheker's brief term.
Current CEO Meg Whitman has told the company that while it will shear off 27,000 jobs through 2014, HP's getting into fewer businesses. "My guess is that she's going to take a writeoff before the end of this year, so she can have a great year next year," Foster said. Some of the companies which HP bought, such as Autonomy and EDS, had a lot of services included, and those services have evaporated because there's a conflict. "If you're IBM, will you now buy Autonomy services once HP owns it?" Foster asks. A $5 billion purchase of Cognos in 2009 seems to block buying Big Data services from Autonomy, he suggests.
The Apple community is anticipating the demise of HP's laptop business as a factor in a red-ink quarter. iPads are on track to sell about 70 million units for 2012, while the rest of the industry's PC business has been fading. Dell's PC business has constricted so quickly the company has stopped calling itself a personal computing provider. Buy-ups like Quest hope to move Dell into the services arena.
The Associated Press moved a story today that predicts $9 billion in losses for the period which ended on July 31.
Facing up to its past mistakes is expected to saddle Hewlett-Packard with a quarterly loss of nearly $9 billion, the largest setback in the Silicon Valley pioneer's history.
The sobering results, due out after the stock market closes Wednesday, won't be a surprise. The company telegraphed the loss earlier this month when it disclosed it will absorb massive charges to account for an ill-advised acquisition and the initial costs of a streamlining program that will jettison 27,000 jobs to help boost HP's sagging profits.
Most of the damage stems from HP's $13 billion acquisition of technology consulting service Electronic Data Systems in 2008. The deal hasn't panned out the way that HP envisioned, forcing the company to write down the value of its Enterprise Services division.
HP also will record a charge of $1.5 billion to $1.7 billion to cover the severance payments to workers being pruned from the company payroll. The cuts, which will eliminate about 8 percent of HP's workforce, are being spread over the next two years.
On the other hand, HP has not shifted away from a forecast of August 8 predicting better than first expected profits.
HP is increasing its previously provided third quarter fiscal 2012 non-GAAP earnings per share (EPS) outlook to approximately $1.00 per share, up from a previous range of $0.94 to $0.97. Third quarter fiscal 2012 non-GAAP diluted EPS estimates exclude after-tax costs related primarily to the amortization and impairment of purchased intangible assets, goodwill impairment charges, restructuring charges and acquisition-related charges.
That AP financial writer's forecast which predicts that massive red ink fingers the EDS charges -- not laptop declines -- plus $1.5 billion in early retirement offers accepted that will pool the losses. These EER offers are being accepted at a rate that's surprising HP. What's working to help the HP numbers is reductions in costs.
Cost cutting is the main reason that HP fared slightly better during the latest quarter than management had anticipated. Add it all up, and it's expected to produce a loss of $4.31 to $4.49 per share during the three months ending in July. That translates into a loss of $8.5 billion to $8.9 billion, the worst quarterly showing since HP started out in a garage in 1939.
The AP writer thinks that investors will be more interested in the way Meg is restructuring HP than any single poor quarter.
Not many companies have never reported 51 successive years of black ink. By Wednesday we'll know if HP will maintain its string.
August 16, 2012
Moving Data in Migrations: the Tools, and Who Uses and Develops Them
Arby's sandwich chain turned off some HP 3000s recently, but moving its data stocked a menu's worth of practices and tools. Based on a report from Paul Edwards, the journey worked smoothest when expertise could be outsourced or tapped.
Edwards described part of the project as a move to Oracle's databases, facilitated by Robelle's Suprtool and Speedware's software. The former supplier has retained its name for 35 years by now. The latter has become Fresche Legacy, but DBMotion as well as AMXW software is still available for data transfers. In the photo at left, the veteran Edwards is in motion himself, flying on a 1968-69 US Navy tour on the USS Hornet. He figures he's been working with 3000s half his life, which would give him enough time in to witness Robelle's entry into the market, as well as the transformation of Infocentre into Speedware, and then to Fresche Legacy.
I'm standing on the right. The two young guys kneeling down are the enlisted operators that ride in the back of the plane. The guy standing on the left is our Crew 13 Aircraft Commander. The aircraft is an S-2E Tracker Carrier Based Anti-Submarine Warfare Navy aircraft. It has a large propeller attached to a 1500hp Wright R1820-82 engine -- one of two on the plane.
Some of the data moves at Arby's went to Oracle, he reports. "They were using Oracle for part of their operations. Using Speedware with Oracle was interesting. Most of that was dumping data with Suprtool or Speedware, then formatting it in the layout they wanted." Suprtool has been guided and developed by Neil Armstrong at Robelle for nearly two decades. He recently marked his 20th year with the vendor, according to the Robelle newsletter.
Arby's also took its payroll application off the 3000, "and it went off to a service bureau. We had the file layouts that bureau wanted, and so it was a lot easier. We just said, 'this field is the one on the HP system, and this field on your layouts is equivalent.' We just matched them all up. We had some where we could say 'forget about that field, we won't need it.' "
But the transition to Oracle, as performed by a team that was supposed to be experienced in the database, was not so easy.The Oracle contractors "had absolutely no clue about how to do migrations," Edwards said. "They'd never done any before."
The migration of data from a well-polished, longtime set of 3000 applications is just as crucial as moving code, selecting a replacement app, or testing what's been moved. And it's not as easy as it might seem to find contractors who've done a migration, especially any who know MPE. Plenty of systems from other vendors haven't been worth the time to migrate. The HP 3000, with its lengthy lifespan, often sports apps that are decades old. Almost as entrenched as Armstrong has been at Robelle.
The avid racing cyclist this summer completed 20 years' worth of "helping to make Qedit and Suprtool great products," Robelle reported in its newsletter.
Neil worked at one of our customers in Ontario, then worked for us in British Colombia, then worked for us in Alberta. At one point Neil moved to Anguilla in the Caribbean to work on Robelle software with Bob Green, our president. Lastly, he moved back to Canada and works on Suprtool and Qedit near Niagara Falls. He is currently our Software Architect, chief systems programmer and a big help for difficult technical support questions.
During his time in Anguilla, Armstrong raced in the 2004 John T Memorial Bike Race. The photo at left shows him with Bob Green cheering him on at the finish. Armstrong has been quick to the pedals for as long as I've known him; as a fellow cyclist, he rides at a rate I can only dream about. But his work in Suprtool -- especially in recent years getting it to Linux, and soon to Windows -- must have been as steady and careful as a rider navigating a busy, two-lane, no shoulders road. That's a tool that began its life in the 1970s, when Edwards was still in the Navy Reserve and working at HP as an SE. Imagine what's been changed in Suprtool over those decades to get it to Suprtool Open.
Sometimes great care to advance a product unveils its rewards when it's compared to other migration methods. It helps if you can call on some military precision during critical transits, too. At Arby's, Edwards and the IT staff seemed to be glad Suprtool was on the migration menu.
August 14, 2012
HP Services takes lumps, posts losses
One element consistent in HP 3000 migrations: the loss of support from the system's maker. HP's support operations include the HP Services unit, the artist formerly known as EDS. A couple of recent news items point at a loss in value when customers hire HP to support their systems.
A report in the Wall Street Journal's blog All Things Digital says that HP's CEO was in Australia last week, apologizing to a major bank about a Windows patching failure. It was serious enough that the mistake will take months to correct, according to another story in the Aussie tech website Delimiter.
One industry source with knowledge of the situation said they had never seen a situation quite like it in Australia. The problem is believed to have affected around a quarter of the bank’s desktop PC machines.
While HP's Meg Whitman was visiting the Commonwealth Bank of Australia, her company announced that the head of HP Services was "leaving the company to pursue other interests." HP also reported it will take an $8 billion charge on its Q3 finances as a result of "the impairment of goodwill within its Services segment."
Customers might wonder if a major bank IT meltdown and the Services charge are related. Whether they are or not, the Services engine that pushes HP profits and growth -- and contributes to some exodus of 3000 sites -- is sputtering this year.
HP appointed Mike Nefkens, currently senior vice president and general manager of HP Enterprise Services EMEA, to lead HP ES on an acting basis. HP also announced that J.J. Charhon, senior VP and CFO of HP ES, was appointed as COO for HP ES. "Charhon will focus on increasing customer satisfaction and improving service delivery efficiency, which will help drive profitable growth," HP promised.
Some analysts say the $8 billion writedown is happening because HP now admits it paid too much for EDS. The price was almost $14 billion in 2008; HP had to take on 144,000 employees, too. This doubled the HP payroll.
Although there is not a lot of activity in the 3000's homesteading group for services and support transfers, the mere fact that HP claims to support its Windows and Unix customers is enough to spark some migrations. Services contracts like the one at Commonwealth are not the same thing as line support from HP's Business Recovery Specialists. Hiring HP to do your IT, via its SE unit, is outsourcing via the vendor.
But this summer as part of its 27,000-employee purge, HP did a "workforce reduction" move on one BRS expert who served HP's Unix and Superdome systems. He'd been with HP for 16 years, and moved to his terminal HP job after supporting HP's 3000 customers. His first exposure to a 3000 was with a Series 68, when he was a $4 hourly operator at his father's employer.
Support, in all of its forms at HP, makes a lot of profit for the company. Shave off $8 billion and you're that much closer to a quarter where there's no profit to mention. HP's first quarterly loss might be in the offing, if not for some clever accounting. Expect to hear a lot of "non-generally accepted accounting practices" numbers in HP's Q3 report Aug. 22.
If your HP support is tied to a company posting a loss, it would be worthwhile to compare that strength to an independent's support of a 3000. That would be especially true if you're facing an exodus from an MPE system which is still running as well or better than any replacement package.
August 10, 2012
Community sage tracks HP's historic dream
While I'm researching the meaty bits of the 3000 for its autobiography, I found another rich resource in a chat with Birket Foster. Like few other vendors, he's celebrated 35 years this year of 3000 business. Yesterday he pointed me at a few dreamy links of HP concept videos.
These are the fond wishes of companies looking toward the future. The video of 1995 was broadcast to the press and the public during the year 1988, when the NewWave office communication products were just released. Ideals in this video -- which is full of office drama about winning a big contract -- include interactive agents tracking schedules and taking voice commands to create reports, plus presentation tools automated by spoken commands.
Everything was connected in an "all-in" concept using HP's NewWave foundation. The HP 3000 had a NewWave role, providing the data to make reports from a well-connected database. I thought 1995 was lost to dusty VCR collections, but Birket tracked it down via YouTube. Concept videos can be unintentionally comic. You can tell from this one it was written in the era of suspenders, white shirts and ties in the office. That's just about the time of the start of HP's shift-to-Unix campaign. And the HP 3000 and other product names are never used. Unlikely to be named, the 3000 just works.
This just-works ideal still lives in the 3000's heritage. A couple of interviews from industry veterans like Ron Miller of Amerigroup and Paul Edwards referenced that reliability pledge. Both said that when the 3000 just worked, the computer was demonstrating its strongest asset. Compared to the alternatives at the start of 3000 service, the MPE ideals must've seemed as far forward as a 1995 vison which was devised in 1989.HP has another concept video called Cooltown in the YouTube archives. Cool Town was unveiled in 2000, with a focus on a broader field than just business and enterprise computing. 2000 was the last full year when the HP 3000 had a cogent message delivered by HP about the system's future. "It's not Windows NT or Unix, but it has an essential role," summed up HP's concept about the 3000.
If you search for "concept videos" in YouTube, or just watch the 1995 vison, you'll see suggestions from other vendors' videos. Apple's got a couple including the Knowlege Navigator. The power of smartphones is suggested in both Cool Town and Apple's concepts, although they use PDAs that look a lot more like circa-2000 Palm Treos than the mobile computers Apple pioneered in 2007.
A concept video reminds us of how far a company can reach and dream to encourgage faith in technology futures. Or it proves that some visions didn't have the benefit of real world input. Instead, they're stories and scenarios built out of the labs and marketing focus groups. The HP 3000 is beyond concept videos in all but one place by now. Emulation of HP's MPE/iX hardware, plus a cloud computing potential for such emulators, would make a good concept video. Throw it out four years and no further and you might see hand-computing devices like HP's new business tablet or even smartphones controlling cloud servers, including MPE/iX partitions.
The markets of today need to show respect for individual environments which include things like MPE/iX for the platform to win a part in these fever-dream productions. It's more likely that just as in 1995, specifics of products fall out of the next concept story. Foster believes that cloud computing will continue to move server hardware out of IT datacenters, even more quickly now. "People will buy a server in the sky," he said. "We're at a crucial stage in the marketplace." Sometimes pie-in-the sky visions show a way toward new concepts, too.
August 09, 2012
Finding HP's MPE Patches and Papers
Speedware has become Fresche Legacy this year, but the vendor's still got its storehouse of HP 3000 documents, white papers and even HP patches available online. You just have to poke directly at the pages you want to hit.
When it became Fresche in the spring, the company put a new face on its website. For awhile it was tough to hop into any HP 3000 page from those Speedware days. But a direct link opens the path to documents which are not found many other places on the Web. HP-authored MPE whitepapers, for example.
The company announced this summer that it's just booked five outsourcing agreements with North American companies worth more than $10 million. These are application outsource contracts -- the sort of business resource which Fresche Legacy continues to offer in the 3000 marketplace.
However, there's still a good deal of resource online from the many years when Speedware was an HP Platinum migration partner, as well as a supplier of migration software such as AMXW. That software's still available today. The HP 3000 paper and patch site has a front door of www.speedware.com/HPe3000_resourcesThere's some surprising advice online that seems to retain its value for the 3000 homesteader, too. This kind of customer might be the one holding off on migrations until the budgeting is better. It's been a tough year for the economy in North America, and even tougher in Europe. One way to stretch the 3000's capabilities might be through open source software. That speedware.com address has a Powerpoint presentation on creating ports for open source products to MPE/iX. (Even more information on using existing open source tools on the 3000, right down to Unix fundamentals like tar, is at the mpe-opensource.org website run by Applied Technologies.)
Such HP-written papers used to be hosted on HP's Jazz server, pulled offline in 2008 when the MPE labs closed down. HP once hosted patches online, too -- including some that made it into beta test, but not general release. You can grab these on the speedware.com pages, too.
There's a lengthy EULA agreement that pops up automatically when you drive into the website, something HP's lawyers insisted upon before licensing this content to third party partners such as Client Systems. We clocked it at about 40 pages when we hit the "Agree" button more than three years ago. HP's Jazz never had such a requirement while its contents were hosted inside Hewlett-Packard.
In a way, HP's outsourced these paper and patches by putting them in the hands of Fresche and Client Systems. Outsourcing can be a good arrangement when an entity, either vendor or client, wants to move on to other opportunities -- like Fresche president Andy Kulakowski said about his new North American outsourcing deals.
These new outsourcing contracts further strengthen our legacy management position and further support our vision to make our customers’ businesses run better by making their IT run better. Organizations that outsource, or are considering outsourcing application management functions, are a perfect fit for our complete service offering.
August 08, 2012
HP's advice on passwords: Got C, but no IA
As 3000 users move out of their protected and obscure MPE/iX, they encounter more virulent environmental waters. Never mind the malware and spyware aimed at Windows and Macs. (Yes, Apple systems are targets, although few have been hacked en masse). This weekend's big story from popular blogger Mat Honan revealed he got his Gmail swiped, his Mac and iPad wiped remotely, his Twitter account heisted, and his iPhone hijacked. All in a matter of minutes because one password, off the new Apple iCloud, was stolen.
This kind of perfect storm happened because the blogger had plenty of computing systems protected by a single password. By coincidence of course, HP released an the HP Technology at Work IT business eNewsletter that suggests some good password practices. But it starts out with bad advice.
"Try putting your hands on the keyboard and just typing randomly -- a gibberish password can be very secure." This sort of consumer-grade instruction bypasses two of the three security requirements for passwords in the industry.
"There is an acronym in the security world: CIA," says Steve Hardwick, a CISSP pro whose current mission is security for the pre-payment systems at Oxygen Financial. "That's Confidentiality, Integrity, Availability. So the HP advice is true on one count, but not all of them. This is a very common security mistake."Hardwick, who's also worked security for Dell's Global Systems as part of a 30-year career in IT, says that making up a password out of nonsense works well only the first time you use it: when you apply it to an account which you secure.
"The HP advice addresses Confidentiality only," he says. "Other people would have difficulty guessing this password. However, it is very weak from an Integrity perspective, as it would be difficult to type in reliably without a reference by writing it down. Plus, it would be weak from an Availability perspective, as it would be very easy to forget without a reference -- again, which would require writing it down."
You could always enter the gibberish in an encrypted file, instead of a post-it note on your monitor. But un-encypting a file every time you forgot a gibberish password adds a lot of time to a workday. And to be clear, that Apple blogger had his password cracked after a hacker talked an Apple support staffer into revealing the password. As Bruce Hobbs, who's consulted and worked in 3000 shops for more than 25 years said, "This reminds me of some of the stories that Vladimir [Volokh] and Bruce Schneier tell: the core 'problem' is almost always people."
HP's got far better security options than gibberish passwords, but they'll cost an enterprise customer a lot more than a click on a eNewsletter. Its Enterprise Cloud Security (ECS) products for securing clouds -- such as Apple's iCloud -- include ECS-Continuity. HP says that service includes two-factor authenticated access to priviledged user accounts, along with NIDS/NIPS, firewall and VPN monitoring, OS hardening, physical data center security and SIEM monitoring.
The HP 3000 managers we've interviewed about cloud computing cite security as the top reason they're putting the cloud on a long simmer for migration plans. As for those passwords, Hardwick came up with a better strategy to create a password you're likely to remember.
Pick a number you know well from back in your history. Then devise a word that's not a word, like "mobolanium." Then alternate each letter and numeral to create a password. You may get something like "m9o7b5o3l2a1n4i6u5m" It might not be everything that ECS Continuity offers in its two-factor passworld access schemes. But it's got CIA. However like the other CIA, if you tell it you'll have to kill someone -- or at least a system.
August 03, 2012
Win for HP-UX's Present No Proof of Future
Over at the headquarters of HP's Business Critical Systems division, the streamers and sighs of relief float in the air this week. A court of California has ruled that Oracle must continue to do business with HP just as it always did. That threat of killing off its database for use on the Itanium systems -- as therefore, HP-UX -- was an empty one if Oracle follows the law and the ruling of a judge.
The HP 3000 had a similar close call more than once in its life. During 1993 and 1994 HP was hammering away at the core of the 3000 customer base. It used R&D managers and GMs to convince leading app vendors they'd be better served by porting to HP-UX. By the spring of '94 Adager organized a Proposition 3000 movement (like the California propositions, all numbered) complete with fine embroidered t-shirts. We wore them to the Interex Computer Management Symposium and lashed at the HP managers on hand.
Soon enough, sense seemed to prevail at HP. A revival of the tech investment began that brought out a better database, moved the system into the open source and Internet world, attracted new customers through the likes of Smith-Gardner ecommerce, and generally swung the sales meter upward. In the middle of this trend we started the NewsWire to spread the word about that year's renaissance.
But HP was a vendor with its own mission. A success in rebooting HP's 3000 business was certified by new sales, right up to the year Hewlett-Packard sounded its swan song for 3000 futures. We had won the battle with HP, but the damage was done with an internal wound. And so goes the same song for Oracle and HP-UX, and probably the future of that operating system inside HP this time. Oracle backs away with this court ruling. But this week's win delivers no proof there's a healthy future for Oracle's HP relationship. You cannot force a company to do business differently, not even if there are tens of thousands of customers who desire the same kind of love they've had for decades.The story chronicled above comes from the HP Chronicle, a newsmonthly which I helped launch in 1984 to cover all things HP. By the time this story surfaced I'd left the Chronicle to "pursue other interests," as they say about anyone who departs from a company with ideas of his own. I didn't leave with an idea about the NewsWire, but it came to my wife Abby, and then to me. I was still writing a guest column for the Chronicle when the above was printed. We saw a focused information opportunity that nobody wanted, and nobody thought would break even. Plus fresh evidence -- like that HP win this week -- that the 3000 was winning respect inside HP. Enough honor to stop the internal assault on the customer base to switch to Unix. Enough admiration to teach the Unix group how to engage with the Customer First in mind.
From the outlook of HP, however, that renaissance didn't have a future. By the late '90s new IA-64 design was becoming an engineering reality instead of swell PowerPoint slides shown to the big customers running 3000s and 9000s. HP had to decide if it would spend tens of millions of dollars to make MPE/iX ready for the latest chip design. It decided no. Then it recanted. Then the inevitable happened -- inevitable if you realize a Compaq-HP merger swung the ax on the necks of some products.
While the 3000 renaissance was rolling, and even after Y2K got beaten as soundly as Oracle did this week, the future looked bright. Especially when, like Oracle's forced march into HP's Itanium, there was a promise to bring what was by then called Itanium to the 3000 world. But forces high inside HP -- indeed, as high as Larry Ellison and Mark Hurd sit at Oracle -- didn't want a 3000 business around to compete with the newly-purchased, just as devoted, and much larger VAX-VMS lineup.
The 3000 left HP's futures. Just as surely, Oracle will leave the realm of HP-UX and Itanium, and take with it many of the very customers pumping billions in profits into HP. Support profits, mostly, since there's not a lot of new Itanium winning its way into companies. What's more, there's plenty of Itanium getting turned off, so HP's BladeServers with Linux will step in. Many blades will have nothing to do with HP.
Those of you who read me regularly on the subject of HP probably know where this is headed. "Oh, HP made a mistake then. They'll make another now. Investing in HP's Unix doesn't have a lengthy upside." I still believe all that, and I'm not alone. Some vendors are glad, however, that the FUD of Oracle and Itanium is going to have to go underground. But it's not going to go away.
It's good to have customers as well as prospects who are using HP-UX and Itanium, if that's the pulse of your profits model. But do not mistake this HP legal win for a renaissance of Itanium at Oracle. There was a time when that might have happened, but that time was back when there was no Internet, when faxes were the fastest, and when the USA Dream Team was making its basketball Olympic splash. Plenty has changed since Oracle and HP could do billions in business together without so much as a signed napkin. One of the biggest changes is that HP's old CEO, given the bum's rush by the Hewlett-Packard board, is now running an operation aimed at killing off Itanium.
Mark Hurd was such a key hire for Oracle that he had a remarkable clause in his employment agreement. We've learned from reading documents that Hurd had a provision for what might happen when Oracle purchased HP in a takeover. There's no need to go all tinpot-despot while sizing up the Oracle management chiefs. But any company that figured they could buy you up while they hired your former CEO isn't going to let one judge's ruling, plus $4 billion in damages, pull them off their windmill-tilting quest.
The drive-by shooting bystander in targeting Itanium is HP-UX, just hanging out on HP's chips and still outselling Solaris. Not Linux, though. Hewlett-Packard knows the enterprise future is Linux, too. So if you're hip-deep in HP's Unix and reading the 43-page victory announcement from the judge, enjoy it. We announced an HP renaissance about the 3000 in 1995, and it lasted six years until HP had to grow up and grow out of the operating system business. It won't take Hurd and Oracle's uber-meister Larry Ellison that long to get Itanium out of the way, even as they're discovering technical problems with new Oracle database releases for Itanium.
Those are the releases that will be court-ordered to run on what HP will call game-changing Itanium designs. However, we've heard from both inside and outside of HP that this FUD campaign of Oracle's has already landed a mortal blow to the Business Critical Systems group. Not even $4 billion in damages will offset what's going unsold, or return the top tech talent that HP's cut in its latest employment purge. The HP-UX and Itanium writing is still out there, but instead of being on the wall it's now it's in legal briefs waved in appellate courtrooms.
These 43 pages from the judge won't be enough to prove anything but Oracle violated an agreement, one struck under pressure when Mark Hurd lept to a rival overnight. Gaudy mistakes like axing the 3000, or kicking a hornet's nest in firing Hurd, come from a boardroom level at HP. The little people working magic in the labs, and the customers trying to protect investments, are the ones getting stung.
August 02, 2012
HP wins lawsuit ruling against Oracle
After more than a year of accusations, secret document dumps, and a glut of suits and countersuits, HP has a victory in its lawsuit against Oracle to save the Itanium servers. Hewlett-Packard didn't paint the suit in the Superior Court of Santa Clara County California as a battle for Itanium's future. But in winning the ruling from Judge James P. Kleinberg, HP will force Oracle to keep selling and porting its database for Itanium servers. Oracle believed that a clause in a lawsuit which settled hiring away Mark Hurd didn't force Oracle to stay in the HP market.
Oracle said it will appeal the ruling immediately. The next step of the lawsuit is to bring the matter in front of a jury to determine damages Oracle must pay HP. Hewlett-Packard estimated it would have lost $4 billion in HP-UX and Integrity business if Oracle had won. Much of it was calculated in support fees.
Legal and industry analysts, as well as members of the 3000 community, are not completely convinced this settles the future for Oracle on Itanium. The judge noted that Oracle and HP were once close partners. Kleinberg noted in his ruling that both companies made a lot of profit for many years working together. It all began to unravel in the spring of 2010, after the former HP CEO Hurd was cleared to take a systems leadership job with HP's rival Sun/Oracle.
Oracle must port its products to Itanium servers without charge, the judge ruled. Oracle said it decided to dump Itanium and HP-UX because it believes the chip is approaching its end of life. Oracle didn't say that about HP-UX. But the operating system only runs on Itanium servers by now, unless a company's got older, PA-RISC-based servers.
Alan Yeo of Screenjet, a provider of tools and services to modernize legacy interfaces on the 3000, believes HP isn't going to extend the HP-UX lifespan very much as a result of a court ruling. "HP don't want to be in the operating systems business anymore," he said yesterday. "That's not where they're going."Some members of the 3000 community are saying that it's very new and untested law to force one company to do business with another. "Forcing parents to stay together for the sake of the kids normally isn't a good idea," Yeo added. "Neither, I suspect, is compelling companies to be business partners." He thinks an exit strategy for Oracle-Itanium users is in order.
On a Wall Street Journalreport about the outcome, several commenters noted that Oracle has other means to keep its database out of Itanium/HP-UX IT centers. "The court may order Oracle to provide software and support, but there is nothing against pooling high-schoolers in Itanium support centre," said Mike Kichton.
"The court may be able to force Oracle to support Itanium," said another commenter, "but they can't make them do it well."
Inside HP, confidence remains high about the prospects for Itanium -- and by extension, HP-UX. Even while HP insisted that Oracle was bound to its promises to support Itanium, HP began to promote Postgres SQL as an alternative. The doubt and battles over the future of the database which is the most often installed on HP-UX have cost HP millions of dollars already. In the quarterly report from this year's Q1, HP's CEO named the Oracle battle as a factor in a 27 percent decline in the Business Critical server business, the group selling servers that run tanium chips. BCS numbers continued to drop in Q2.
The judge's ruling will be of no help for the BCS Q3 sales, which ended the day before the court edict was announced. HP called the ruling "a tremendous win."
Today’s proposed ruling is a tremendous win for HP and its customers. The Superior Court of the State of California, Santa Clara County, has confirmed the existence of a contract between HP and Oracle that requires Oracle to port its software products to HP’s Itanium-based servers. We expect Oracle to comply with its contractual obligation as ordered by the Court.
HP summarized the court's order in a brief statement on its Newsroom website.
August 01, 2012
Just how good were those good old days?
NewsWire subscribers who receive our email updates have heard that I'm collecting stories about the early 3000's days. I'm working on an autobiography of the 3000, written "as told to" me, by the system. I've fielded phone calls and gotten some nice email stories. Today's was great fun to read and instructive, too. That's because the negative experiences in our lives are remembered clearer than the positive ones.
What I mean to say is that war stories are more fun to read, chock-a-block with details. Before I offer an excerpt from today's story, I want to make an observation about the 3000's life. It wasn't always the better time we prefer to remember.
Even the president of the Connect user group falls prey to this memory. In his column in the latest user group magazine, Steve Davidek remembered days when HP was packed with people eager to service a 3000 customer. After a disk head crash in 1984, Davidek recounted three HP employees he knew by name who chipped in to resolve the problem. A different time indeed, when Davidek managed just one Series III HP 3000.
Our HP sales rep would visit every month or so just to see how we were doing. Some months he'd even bring a Systems Engineer along to check on things. It was amazing.
Dave Wiseman, who says that "Most of you will know me as the idiot dragging the alligator at the Orlando conference, or maybe as the guy behind Millware," told us a tale of days even earlier in the 3000's life. Buying a system from HP in 1978 meant investing in a terminal to test your application -- before HP would even fill the system order.One of the first three HP 3000 customers in Southern England, Wiseman was managing at an IBM shop looking for a better system. "I called the HP salesman and asked him in," he says.
What HP never knew is that if the project went well, there was a possibility that they would get on the shortlist for our branch scheme – a machine in every UK branch office. That would be 45 machines when the entire UK installed base of HP 3000s was around 10 at the time.
So the salesman came in and I said that I wanted to buy an HP 3000, to which he replied, “Well I’m not sure about that, as we’ve never done your application before. Why don’t you buy a terminal and an acoustic coupler first and make sure that your application works?"
"Okay," I said. "Where do I buy a coupler from?"
"No idea," he replied “but the 2645A terminal is $5,000."
So he bought the terminal, and then tested against HP's 3000 in a UK office. "I started dialing into the Winnersh office. (I still have the telephone number and address engraved in my heart). On occasion when I needed answers, I would drive over there and work on their machines."
Wiseman goes on in his early history to praise the improvement that the 3000 delivered to Commercial Union Assurance.
I recall our durability test was to unscrew the feet on the 50MB disc drive and push it until the disc drive bounced off its HP-IB cable. On more than one occasion the cable came out and you could just plug it back in and carry on working. Try that with an IBM and you could expect two days of work to get it restarted.
The IBM guys couldn’t understand how we could run so many users on such a small box, but we were always looking for improved performance -- as we already had the largest HP 3000 around. There were no tools available in those days, so we used tricks like putting a saucer of milk on each disc to see which one curdled first. (Okay, that's not really true. But we did spend a long time just standing there touching the drives lightly just to see what got hot.) We did a full system unload and reload every three months, and unloaded and reloaded most databases at the same time.
Davidek recalls his warm feeling of having ample HP support, but he does recognize it as a bygone emotion. "The customer experience today is probably not ever going to return to those days, but I would love to come close," he writes. "HP is working on this issue, and with a little luck, we may get there."
War stories are useful for more than the warnings about potential pitfalls. Even from 30 years ago, they remind us the good old days were not as good as we remember. They also remind us how our initiative made the bad times manageable. That's a confidence builder in these uncertain career times.
A 3000 manager needed a little luck, all the way back to the beginning. I'd like to hear about your lucky and unlucky days. Call me at 512-331-0075 if you want to chat, or email me. By recalling both the good and the bad, we can chronicle the middle path for that autobiography.
July 09, 2012
HP proprietary versus commodity hosts: Unix v. MPE
Analysis is spreading about HP's mission for its last in-house computer environment. Hosting will be moving for HP-UX. This is happening at the same time as hosting is on the move for MPE/iX. One distinction is the hardware platform. One is ready now, the other a good while later. You might guess wrong on which is which.
On the HP-UX, there's much work to be accomplished to get HP's Unix onto the Intel Xeon/x86 chipset. No, the entire OS is not on the move, not like MPE/iX is gliding onto Intel i7 multi-core chips. HP's working to get the best of its Unix running on a hardened Linux. The combination will be served from a customized configuration.
At the ServerWatch website, an article quotes the head of HP Industry Standard Servers, who says Unix now moves forward on x86.
The effort will eventually lead HP to favor x86 and Linux over Itanium and Unix, according to Scott Farrand, vice president of Industry Standard Servers and Software in the Enterprise Group at HP.
"Our go-forward strategy for mission-critical systems is shifting to an x86-based world," Farrand said. "It's not by coincidence that folks have de-committed from Itanium, specifically Oracle."
In the same manner, MPE/iX is also moving to x86. The Stromasys HP 3000 emulator, HPA/3000, is running on industry standard PC hardware. It was not demoed on that kind of system in its most recent appearance. The CAMUS user group saw the emulator perform flawlessly running on a custom-built PC. It's the kind of system we once called a white box. By now you might call it Build To Order, if there was a major vendor's label on the front.
It was convenient to use a BTO or white box PC to show off HPA/3000. But users of this solution won't be trying to save $500 building their own PC configuration when they spec up an HPA/3000 host. They're going to want to go high horsepower -- just the right decision considering the $25,000 price of this solution. The genuine and lasting value here is the software.Software transformation magic has been a classic part of the 3000 experience. You could start by considering MPEX, an expansion of MPE's powers that was created by VEsoft when the computer was still new. Later on there was Chameleon from Taurus Software, which did one thing well: it let customers emulate the then-new PA-RISC MPE/XL operating system commands on Classic MPE V systems.
HP added its own magic in software transformation when it built MPE/XL, designing it to execute programs written for MPE V and earlier. This object code translation was a groundbreaker -- and so unique that OCTCOMP was one of the programs that HPA/3000 product manager Paul Taffel fired up during that April CAMUS demonstration.
However, like more than a few veterans in the 3000 community, VEsoft's Vladimir Volokh has opinions on how HPA/3000 should be shown, and sold. In the first aspect he counsels for a different plan. For the other, he believes Stromasys can help customers see the value in a $25,000 investment.
Specialized hardware configurations should be avoided. "You should sell it as running on a regular PC," Vladimir said. "Why save $500, and leave some doubt in users minds? No manager will build such a computer for their MPE programs."
But that $25,000 price tag -- the current entry-point in the product line -- is a fair match for what a 3000 does: runs businesses. "If you compare it to the size of your business, and the price of the alternative, it should not seem expensive," Vladimir said.
Even the Linux alternative is not going to seem less expensive once HP finishes with what's named Project Dragon Hawk. According to ServerWatch, this target for new business-critical projects "will provide 32-way partitionable processors, certified to run RedHat Enterprise Linux 6." The software that's known as RHEL 6 comes ready for unlimited guests at $3,249, plus numerous add-on essentials, running from $199 to $399 each year. That price only covers two CPU sockets. And that's all to be paid before HP gets its license fee for the Unix-hardening features it'll add to Linux.
There's an important distinction between the industry-standard MPE/iX host and the industry-standard HP Unix host. The former is ready today. HP hasn't announced a delivery date for Dragon Hawk -- which sort of makes HPA/3000 more ready for the new mission-critical projects. HP's not recommending new Unix business on its Itanium systems, if Farrand's go-forward is to be followed.
June 25, 2012
HP's deepest woes: ahead, or just behind?
The financial press is treating the HP 3000 customer to a full spectrum of Hewlett-Packard analysis by now. At the close of June 25 trading, the company's stock was at a seven-year low of $19.55 per share. (And that November, 2004 price was four years after a 2:1 split.) The price is tied to market valuation and makes this vendor of 3000 migration replacement systems a more attractive takeover target. This is no longer just a matter of HP's employees keeping fair value in their retirement accounts.
But HP's been within 10 percent of this newest low before, even within the last year. How much this should matter in selecting a replacement enterprise system -- well, it depends on who you're asking. Even the customers have views on this, although the ones making their stand on the 3000 have been more eager to speak up.
In response to one report on an HP breakup, which said even last summer "the reality is that Itanium is dead, dead, dead," Tracy Johnson said circling sharks wouldn't bite on HP's morbid tail. Sharks like Oracle haven't been imagined in HP's waters.
"Is it really a matter of Itanium, or any other product line?" Johnson wrote on the HP 3000 Community at LinkedIn. "HP is already the walking dead. It's not the sharks; sharks prefer live prey. It is rather the vultures and jackals that feed on carrion that will pick on HP."
Strong sentiment, but not unusual among the customers which HP left behind to maintain systems and an ecosystem without vendor assets. However, the business finance community has a few analysts who see this week as the deepest of HP's stock troubles. Some are believing HP's now got nowhere to go but up.In the San Jose Mercury News, an article said that the company's shareholders are already growing impatient with CEO Meg Whitman's turnaround.
Keeping investors happy isn't something corporations take lightly. In many companies, including HP, the top executives own much of the stock themselves and don't want to see it devalued. If the share price sinks too low, other investors may seek to oust management, the company could have a harder time raising money for acquisitions or capital improvements, and it could become vulnerable to a takeover. Moreover, if the value of its stock options plummets, it might have trouble retaining and attracting the skilled workers it needs.
Pessimism, or the extra dose of realism, is the most direct assessment of the company's futures. One writer at Seeking Alpha, however, sees at least a stock rebound in the near future. Tiago Romao writes that what he considers a hardware company in turnaround is being pummeled too hard in the markets.
"This company is very attractive and it has been consolidating at the present values for almost a month," Romao wrote last week. "Notice the book value per share is $20.87 and the market price has made a technical support around this value. In short, HP is a profitable company with an attractive price to earnings ration, good margins, trading near its book value and technically has been consolidating for a while and may be preparing a rebound."
NASDAQ's GuruFocus, which tracks picks of top investors, noted that 18 of 30 investors increased HP holdings in the last quarter. HP Chairman Ray Lane increased his holdings by more than 20 percent.
The other response to the decline of the company's fortunes and futures: sadness. One article in Fortune, just after Whitman arrived, detailed the live-blogging of her speech to employees, critical reports "that wish HP ill" coming right out of the room where she was speaking.
"It's so sad to see this happen to HP," said Kees den Hartigh, CTO at the social media provider Progmic. "I never worked for them. Probably never will." Progmic and den Hartigh develop communications to reach HP's consumers. As a career open systems technology expert, he's also posted from the Connect user group's Twitter feed as recently as last year.
Short of the science fiction needed to revive a CEO genius like Steve Jobs -- or as some in the LinkedIn community wish, the resurrection of HP's founders -- Hewlett-Packard is facing a long return to its strength in the era when it canceled its 3000 futures. From the stock split just a year before that 2001 event, to talk of sharks, carrion and a rebound back into the $20s and back into earnings and revenue growth, is a long trek as well. At the HP-UX group of LinkedIn, the discussions among those Itanium users are technical instead of business-related. The Unix customers may as well keep their eyes on IT tactics, since they can't do much for the strategy outlook, except look upward.
June 15, 2012
Oracle's legal jousts missing Media's marks
HP and Oracle have been squaring off in court over the future of the database on HP's Unix servers, jousting since the first week of the month. But after a break on Wednesday to attempt to settle the battle out of court, these two companies were back at it after talks crashed. Oracle's got HP's database futures in its hands, and testimony from its executives asserts those hands have crimping sales of HP's Itanium Business Critical Servers.
But that's just not enough to keep the attention of some Itanium owners. One migrator is already heading away from HP's Unix and onto Oracle's Unix. But the death-knell that Oracle wants to spread about the HP-UX platform isn't spooking Greg Barnes.
Barnes has an 3000 background that dates back to MPE III, but his company took its time getting away from 3000s. Media General, which agreed to sell off nearly all of it newspapers to a Berkshire Hathaway subsidiary, was using publishing software from Collier-Jackson until the late 1990s, when the shift started off 3000s. Barnes said the Oracle jabs didn't rattle him a bit in HP Unix management.
"I'm not aware that the snipe-fest had any effect whatsoever," he said, while reporting on the company's in-house migration to the Itanium servers. "Like much of the death knells I’ve read over the years, I have better things to ponder." Among his new interests are Oracle's direct competitor to HP-UX, Solaris. Media General is now phasing out the five HP-UX systems left in its datacenter. It's also focusing on its TV business, post-newspapers.In a shop that runs "an awful lot of Oracle," migrating away from those CJ applications led Media General to Solaris. Peoplesoft HR and FIS, as well as DSI Circulation, either required or recommended Solaris platforms. HP has said for months that Oracle's been attacking the Unix business with success, spreading doubts. But the FUD from Oracle, and its pointing at a sketchy future for the only processors that run HP-UX, was not clouding Media General decisions. Replacing the likes of Collier-Jackson's AIM -- the last of the 3000 apps to go -- determined the OS platform. It was the apps, not how long the chips would be enhanced or supported, that steered every decision.
"At 15 years [of migration], it was very gradual," Barnes said about a shift that started in 1997. "CJ AIM was the last to go, and the new app Mactive also required Solaris."
We originally ran CJ Payroll and AIM. The Circulation and FIS systems were home-grown. They all had their limitations, and management were looking for more features and less programmers.
Payroll was the first to go and that went to PeopleSoft using Oracle. That transition was a major zoo. Next went FIS to the same PeopleSoft/Oracle arena, and that was slightly better. Then AIM to Mactive. Circulation went from the HP 3000 to HP-UX using DSI. We are still migrating it from HP-UX to Solaris.
I was the last man standing to manage MPE: Two 969KS-320s running MPE 6.0. Now I'm the last man standing managing both HP-UX and Solaris, plus Solaris x86 OS.
Barnes reports he was working on HP 3000s just four years after the systems had their true 1974 release. While he jokes that he thinks he's getting entirely too old for this kind of churn, he does have four major operating systems in his resume. "Try managing both Unix and MPE systems, remembering the commands, and not messing up anything if you want a challenge," he says.
Oracle's been meeting challenges of its own since it purchased all of Sun, both software and servers. The latter have seen large sales dips since the 2011 acquisition closed. Selling Unix to new sites has become a trial for HP as well. It's that Oracle database that's got a comfortable spot in places like Media General.
What's slipping away are owned operating profits of more than $2 billion a year off HP's Itanium business that relies on Oracle. A memo from HP's enterprise server chief Dave Donatelli in 2010 said these servers were more profitable than HP's massive PC business. According to an article from All Things D's Arik Hesseldahl, HP's been drawing about 15 percent of its earnings from Itanium business.
HP’s Business Criticial Server business combined with its Technology Services business, which includes the support and services associated with the Integrity line of servers that uses the Intel-made Itanium chip, was at that time larger on a revenue basis than HP’s personal computer business.
And even if HP prevails in its suit, Whitmore isn’t seeing much benefit: “Regardless of the outcome of this particular suit, we expect HP-UX customers to continue fleeing what is increasingly looking like a dead platform — creating a major headwind for HP’s medium-term earnings.” Ouch.
June 13, 2012
Is HP porting HP-UX to Xeon, or not?
Just as soon as it seemed obvious HP's Unix was going to run only on its Itanium processors and the Integrity/Superdome servers, new data has emerged to change that limited future. HP CEO Meg Whitman was interviewed as part of the Wall Street Journal's All Things D conference last week. She tossed off a message that HP-UX is on its way to the Intel Xeon processor line.
"She also said that HP will create a version of HP-UX, its version of Unix that will run on Intel’s mainstream server chip known as Xeon," reporter Arik Hesseldahl wrote in Hewlett-Packard CEO Meg Whitman Has a Lot to Say. Drilling into the text of the interview, the HP CEO seems to acknowledge that Project Odyssey and a Xeon-native HP-UX are two distinct projects.
We have a lot of customers on Oracle Itanium who... do not want to get off of HP Unix and on to something else. And they kinda like what they have and they’d like to stick with it. I think either way, [the VP of HP Servers, Storage and Networking] Dave Donatelli’s got in the works the next generation of Business Critical Servers on a more open platform. It’s called Odyssey, which is pretty cool. Ultimately we’ve got to build Unix on a Xeon chip, and so we will do that.
"We've got to build Unix on a Xeon chip" means something very different from Dave's Odyssey. The first is a project that HP calculated at $100 million in costs five years ago. The Odyssey takes the best of HP's Unix and puts it into a "hardened Linux" from SUSE. Long before Whitman got to HP, Hewlett-Packard managers at HP SSN decided that the $100 million port was a non-starter. It all reminds me of the no, then yes, then no dance of MPE into, then out of, the Itanium architecture. HP called it IA-64 back then. It used a TV broadcast to its offices to step back from IA-64, then relented a few years later.
But having a CEO confirm a business unit-level project can be scant assurance, especially while talking to anyone but internal HP executives. Carly Fiorina once pledged fealty to the 3000's future, after all.
About one year before the HP 3000 lost its futures inside HP's plans, Fiorina was introducing a sunnier prospect at the 2000 HP World conference. "HP World has grown out of a single customer commitment, one that has lasted 27 years,” Fiorina said. "In 1972 HP introduced the HP 3000, our first multipurpose enterprise computer, a product that has been praised as one of the computer industry’s more enduring success stories. But it didn’t begin that way," she added. "In fact by many counts it got off to quite a rocky start."
The first few systems were plagued by software glitches. And Dave Packard’s personal commitment to his customers turned the HP 3000 story around dramatically. First he sent teams of engineers to work around the clock until the system worked flawlessly. Second, he made sure that any customer upgrades could be easily integrated into existing 3000s. And thanks to his promise to be flexible and grow with the customer, what we’re now calling the e3000 has experienced almost three decades of success, and continues to thrive with a loyal following.
Ann Livermore, another HP executive who's left the HP business unit management team, then followed up Fiorina, telling 3000 customers that their future was unlimited. At least that was the view from her podium during the fall which followed the Y2K transition.
"We know that you count on the e3000 as part of an always-on infrastructure, and also that it needs to continue to deliver competitive price performance," she said, adding another promise. "It’s a great platform. We really appreciate the strong loyalty you’ve shown HP, and we commit to show that loyalty back to you. If you ever want to transition to another operating environment, we intend to be the best possible partner to help you do that. And if you want to use the e3000 forever, that’s great, too."
It all felt good at the time, with the 3000 having crossed Y2K successfully carrying millions of lines of '80s-era code, plus the new PCI-bus servers ready in the wings. But things changed in a dramatic way with HP's acquisition of Compaq. Those 3000 shops who've migrated to HP-UX and Oracle might not want to make a change, and so they will want to draw assurance from the latest public comment from HP's CEO. But it's Donatelli who makes that call about where HP-UX is going -- into a future locked onto Itanium, or toward a commodity platform like Xeon.
June 07, 2012
Chief Meg roars out HP's future at Discover
While the HP Discover party animals rock out to Don Henley and Sheryl Crow tonight, a swan song rings in their ears. HP CEO Meg Whitman sang off the grow-to-be-big era of Hewlett-Packard at the annual show of HP and its partners. About 10,000 were on hand in Vegas, but only a modest fraction of them heard the notes of a coda to consumerization strategy. HP will pivot to IT pros even while its consumer operations retract. It will be quite an act to observe, worthy of anything in the zoo of Madagascar, to see the needed cash emerge for overdue R&D.
HP will still sell its products to the world at large. Whitman said he loves HP's printers, and she decided to hang onto the PC unit after HP tested the concept of a spinoff. But she's calling a tune that leads Hewlett-Packard back to business computing. The company is so far off that track that Whitman is calling the new strategy a turnaround, one that's going to take years to finish. Longer than your average Dreamworks animated feature takes to draw and render, using HP's systems.
Meg's keynote, complete with a finale from a cartoon lion, wasn't viewed live by all that many working on the busy expo floor, each trying to connect with as many prospects as the three days would allow. CEO speeches are given for big customers who don't need to see things at an expo, the analysts who tell these customers what to think and buy, and user group officers and volunteers. They shouldn't expect overnight change, which may disappoint the investors who put money behind a company that has been getting bigger for being the sake of No. 1, ever since Carly Fiorina became the first non-HP CEO in 1999.
"Most turnarounds in American industry are anywhere between four and five years," Whitman said. "And we’re at the beginning of the journey, not the end of the journey." HP's been bleeding new business and seen its stock at five-year lows at the start of that turnaround. The shares are down 8 percent since she took over nine months ago. This was her first HP Discover keynote.Patrick Thibodeau, covering the show for Computerworld, quoted Whitman's speech in his article as a credo of confidence.
"The kind of turmoil that HP has had at the top of the company can take a toll on companies, employees, shareholders," said Whitman. "But I've been surprised at the resilience of HP people -- HP is a remarkably resilient company." As the wall-to-wall screens displayed a large flock of birds literally darkening the sky, Whitman said "HP will darken the skies with the magnitude of our response."
Thibodeau, who covered the 3000's ouster from HP's product line for Computerworld, had the classic press experience during Whitman's talk. He sat next to a customer and watched what they took down for notes, then asked afterwards how they felt. Most of them didn't think the future of Itanium was of any express concern. But the enterprise manager still using HP products has a different scope of future than most of us. One manager who runs a NonStop system -- HP bought up this business when it acquired Tandem -- thought even half a decade away from too soon to weather changes in his server. He called it "the Tandem." This gives an idea of the loyalty HP bought into when Tandem become NonStop. It all runs on Itanium now.
Arens said the coming layoffs are a concern, but HP, the company, seems solid. His main worry is about Itanium. A platform change, if it were to happen, would be at least five years off. But even that time frame would make him "a little nervous."
"There's too much on the Tandem that is mission-critical [and] to jump out of it five years from now would be crazy," said Arens.
Whitman didn't address specific product lines in her speech. We're reminded of the direct shout-out HP managers forced onto Carly in 2000, when a CEO speech assured the users at HP World the server had a certain future in HP's plans. What sort of future was revealed about a year later.
HP's Services unit, now working to justify its 140,000 headcount, came in for special mention in Whitman's speech. "That's our future," she said. "The power of hardware, software and services, delivered as solutions." HP will play out its comeback with the pieces it's got left on the game board. No more consumer-aimed tablets, no devotion to making a reseller model built for printers do the job on enterprise business. That last one was former board director Dick Hackborn's dream, after building a massive printer empire that made HP a household name in ink.
The one hour of Meg's keynote is online. It's complete with a visit from the lion Alex of Madagascar 3, the summer film opening tomorrow that the studio's Jeffrey Katzenberg said wouldn't be possible without HP computing. "Don't worry," Meg said after Alex was onstage. "Alex is one lion that Jeffrey and I can both handle."
The roar of a reboot of HP is another kind of beast that can't be herded onto the stage of the future so easily. HP wants to capture the future with its cloud concepts. That's going to take as long as the company's comeback, so Whitman wants time to discover how to make users disregard massive layoffs and focus on big product ideas.
May 24, 2012
Why HP Financials Should Remain Relevant
File this article under News You Can Use. I'm about to make a case for why the quarterly reports of Hewlett-Packard -- a company posting more than $125 billion in annual sales -- should still matter to you. If your job is to plan IT resource deployment, like who's learning what skill or where investments go in 2013 and beyond, HP's reports remain relevant.
We've been dividing ourselves into two camps since late 2001: those leaving the 3000 and those remaining. For the ones who are leaving, or have a migration right behind them in the rear-view, HP's profile in 2012 is even more important than it was a decade ago. Hewlett-Packard is probably driving your technology and services choices. The success of adopting its products in Unix, Linux, servers or even the cloud gets reflected in HP sales numbers. And HP still announces strategies when it talks to securities analysts.
As an example, the CEO Meg Whitman told employees in a letter yesterday, prior to the quarterly results release, that this round of 27,000 layoffs is going to be different from layoffs of 2005. "Another difference from years past is what we plan to do with the savings," she said in her letter. "The majority of savings [via employee cutbacks] this time around will be invested in the business. We'll be investing to drive leadership in the three strategic pillars – cloud, security and information optimization."
HP drove its previous layoff savings right out to the shareholders, not the customers. As a continuing customer of HP products, these words of investing are finally those that you want to hear. Cloud has little to do with HP's consumer business. Same for security and information optimization. This is an enterprise play on a field where HP is way behind, by Whitman's own scoring.
Even though HP stock hit a 52-week low before her comments, today it's having a relatively good day. The investors just got told they won't see direct profit increases because of HP's changes, and its okay with them. Like you, the majority of them have got a long-term relationship with Hewlett-Packard. Of course if that's not true for you, then getting your homesteading choice reinforced makes the quarterly results relevant, too.The 3.5 percent rebound the stock's enjoying today is about finance, not company futures. "HP beats estimates on earnings," the headlines go, playing the forecasting card about expected profits -- instead of the downward trend since last year.
Whitman knows, like you do, that "Our business is still declining," in part because customers like homesteaders are not with HP anymore. And the migration segment of the 3000 populace has left HP-centric alternatives behind, in the majority. Whitman said HP still needs to "invest to drive R&D and innovation in our core businesses of servers, storage and networking." It's work that's undone, and now the company will be taking what's special about its Unix and delivering it to the Linux market, pretty much without reward.
The Gartner Group looked over the exit-Itanium Odyssey Project and found that it's going to level the sales playing field for Linux at HP. That's what happened to the HP 3000 at Hewlett-Packard back in the early 1990s. Eventually the product that had less in common with HP's innovation (read: MPEand IMAGE) and had to march uphill. The trend from the top managers in HP servers remains the same as it was: follow the sales. Gartner thinks Odyssey is good for HP -- to the extent it can stop the steep decline of the HP Unix business. But it's inevitable.
As these enhancements roll out, Gartner believes HP will be more inclined to market and sell Linux on an even playing field to Unix, which will add more market momentum to Linux and greater decline of Unix. As this decline occurs, HP will be able to delay migrations or reinforce HP-UX user loyalty by diverting its generally loyal base to a strong mission-critical alternative and viable replacement for Itanium. By accelerating the pace of x86 adoption for mission-critical workloads, HP will drive down the margins that it has traditionally enjoyed as a vendor of large-scale, non-x86 Unix servers. Although BCS only represents 10% of HP's server, storage and networking revenue, the margins are at a much higher proportion.
Those italics are ours, not Gartner's. With that language, any companies no longer doing business with HP can hear an echo of their chaos and trauma over the last 10 years. Although the HP 3000 represented a small part of the company's server revenue, its margins were at a much higher proportion. Now this kind of profitable business is ebbing away even more. HP's not going to chase PC business like it once did. (It's got a project in place now to examine the value of the Compaq brand it acquired in 2001.) But it's more than one annual buying cycle away from generating hope of innovation, much less a fresh value for companies who want integration -- or as HP likes to call it now, convergence.
You might have left HP behind years ago, but need to defend that decision as a homesteader. Or your choice going forward is the success of HP's strategy. Either position needs current information, the kind that can be tracked over time and pinned to a point of profits, sales and plans.
May 23, 2012
HP to cut 27,000 jobs, reports 24% profit dip
Hewlett-Packard watched two indicators drop during its latest quarter, and then pushed a third number downward on its own. Company revenues fell 3 percent in HP's Q2 of 2012, while profits dropped 24 percent versus last year's second quarter. So while HP dispensed the sour news of its quarterly report, it also announced it would cut 27,000 jobs over the next two years. That's 8 percent of its workforce, the largest cut since the 10 percent layoff of 2005 when 14,500 jobs went on the block.
The company said it will save up to $3.5 billion yearly by the time these layoffs are complete in October, 2014. HP's current yearly revenue rate is about $120 billion, so the 8 percent job cuts will yield savings of less than 3 percent of revenues. But that $3.5 billion is a chunk of money equal to 40 percent of last year's profits. The company says it will invest in "research and development to drive innovation and differentiation across its core printing and personal systems businesses, as well as emerging areas." HP said the moves are a "multi-year restructuring to fuel innovation and enable investment."
The cutbacks are going to cost HP in the short run, a total of $1.7 billion within the next six months. The last time the company cut back this deeply, it was an enterprise of 144,000 employees. In spite of those 2005 job losses, Hewlett-Packard now employs close to 350,000 people worldwide. CEO Meg Whitman said these cuts "are necessary to improve execution and to fund the long term health of the company."
The enterprise computing operations at HP, which include replacement systems for migrating HP 3000 customers, came in for special mention in the layoff announcement. The company plans to drive some of the saved money into more R&D.
Enterprise Servers, Storage and Networking (ESSN) will invest to accelerate its research and development activities to extend its leading portfolio of servers, storage and networking. Together these assets create a Converged Infrastructure which is the foundation for top client initiatives such as cloud, virtualization, big data analytics, legacy modernization and social media.
Wall Street analysts were noting that the company beat earnings estimates for the second quarter, a development that can sometimes impress investors. The stock closed at $21.08 just before the restructuring announcement and quarterly results were released. After-hours trading was pushing the stock back above $23. For the first half of fiscal 2012, HP's profits are about half of where they were in 2011.
The last time HP announced a cut this deep in its workforce, it also froze pensions and retiree's medical programs. This year the company is offering an early retirement program to entice some staff to leave.
Business Critical Systems -- the Itanium-based business that's been under siege from Oracle's Fear, Uncertainty and Doubt campaign -- registered another drop of 23 percent in its sales. Overall, the ESSN unit's revenue declined 6 percent year over year. Even Industry Standard Servers revenue was down 6 percent.
After purchasing Autonomy's software operations for $10.2 billion last year, HP Software sales were up 22 percent. It's about a $170 million sales increase. HP will "help improve Autonomy's performance" by replacing Autonomy's founder Mike Lynch with Bill Veghte, HP's chief strategy officer and executive VP of HP Software.
May 22, 2012
A 3000 plucked barren of IMAGE never flew
"Options offering a lower-priced version of the Series 920 server, without database software, are available on the July HP price list."
With those words, HP went to war on the wings of a bundled database. IMAGE was not only the heart of the 3000's value. IMAGE had become the rocket fuel of the 3000, a constant in a formula that produced better transaction values than anything offered by Hewlett-Packard. Or elsewhere in the industry.
But HP didn't know how to sell it. You can read as much at hpmuseum.net, where a July Channels newsletter about the "confusion" over 3000 pricing was being cleared up. Sort of. "Our objective is to price the HP 3000 systems at a price/performance advantage for transaction processing over our HP 9000 family." Fair enough. But then "We anticipate that much of the confusion regarding price/performance may have been caused by the higher prices of the HP 3000 version of a PA-RISC processor."
Except there was no such version. The same chip was used in both 3000 and 9000 server. HP had just locked the 3000's software to the higher prices. There was a version of prices that was higher, to be sure. So HP looked around for what it could clip from the 3000 value. It tried IMAGE for a month or so, until its partners and customers revolted in public, in the lap of the industry press.
Unbundling databases became the norm for the classic business computing vendors, even through the HP 250 Business minicomputer included a version of IMAGE when HP brought it out in 1979. A good thing, too, for current business computer users who are planning or deploying a move away from the 3000. The HP 250 gave wings to Michael Marxmeier and his Eloquence database, starting in 1987. It's the only drop-in replacement for the 3000's IMAGE, using its TurboIMAGE compatibility mode. Eloquence is also getting a turbocharged full-text search ability this summer. The open beta test program for 8.20 just started; full release is in July.In a summer more than 20 years ago, one thing that seemed fast to IMAGE users was HP's move to strip it out of the 3000's value. By August of 1990 IMAGE had been part of every HP 3000 sale for 14 years. This was the period that built the MPE application base. Companies invested in applications that used IMAGE underneath, or they bought tools that relied on IMAGE to roll their own apps. Languages like COBOL, Speedware and Powerhouse called IMAGE directly through intrinsics. Or developers used software that improved upon this common coin of a database, such as Suprtool and Adager.
In spite of customer devotion, at the Boston Interex show of 1990 HP felt heat beyond the summertime swelter of New England. Vendors and consultants and members of Special Interest Groups organized passionate meetings at the show around the HP unbundling scheme. They rose up to lash HP in a public forum, complaining bitterly in front of a host of reporters from national IT weeklies like Computerworld and InformationWeek.
HP lost face at the meeting while its top enterprise management tried to defend the business re-arrangement. IMAGE remained an included part of the 3000. A bonus from this revolt -- some called it the Boston Tea Party -- was extra investment in the SQL interface for IMAGE. The database went from being called TurboIMAGE to IMAGE/SQL over the next two years. That SQL capability delivered opportunity for Open DataBase Connectivity middleware between IMAGE and outside tools on desktops and elsewhere. MB Foster's ODBCLink became part of the 3000's bundle in an simplified SE version.
This year Foster is hosting a three-day conference on the newest querying tool for Eloquence. July 25-27 will deliver training for developers and application architects on the latest enhancements for the database that's more than two decades mature and still improving. Even though HP won't be making IMAGE any better, there's 25 years of development on Eloquence so far. Marxmeier has shipped upgrades to Eloquence every year since before HP shuttered its MPE labs. He made a sound case for flying toward technology advances on Linux, Windows and even HP-UX -- the places that Eloquence operates.
Eloquence keeps evolving. Even for 3000 emulator users, there’s a good question to be answered. There might be some workarounds to implement some of the technology changes like PCI and encryption -- but does it make sense? Can you afford to miss all those changes that the outside world might be demanding from your business and your application?
We want to show the value that makes sense for applications. What’s important about this full text indexing in Eloquence 8.20 is that it will look like Google, where you it gets you a million results within a fraction of a millisecond. Eloquence was always designed to support IMAGE applications. Our original customers used IMAGE, too. Eloquence is a second- or third-generation IMAGE, I believe.
May 21, 2012
HP runs ahead and behind, then and now
The iconic entity called Interex emerged this month 28 years ago. HP had announced it would catch up to 32-bit computing with Spectrum. And the vendor whose sales still didn't exceed $7 billion said in 1984 that touchscreens were the most intuitive interface. Being ahead and behind all at once is a sign that you're still developing, making leadership while you catch up your customers
Hewlett-Packard used the 1980s in your community to push out new ideas. Touch-based personal computing hit the market in the HP 150, one of the Series 100 PCs that transformed the International Association of Hewlett-Packard Computer Users. Before HP cast its seeds of PC innovation, Interex didn't exist. In a May column from executive director Bill Crow in InterACT magazine, the user group renamed itself "to define the association's independence" from HP.
Although that user group has been in the grave more than six years, its members' insights haven't evaporated. An era of ink on paper (click above for detail) has preserved milestones like HP running more than 25 years ahead of the industry with touchscreens. It's easy to forget your community was reaching for a breakthrough office experience even while it was dragging along chips devised a decade earlier.
Ed McCracken, a GM of HP's Business Development Group, announced in early '84 the seven basic principles guiding HP's "office automation strategy:
1. The workstation is the most important component, followed by the distributed data processing system (DDS)
2. All workstations will be personal computers
3. The touchscreen is the most intuitive interface
4. Workstations will not tie directly to mainframes but to an intermediate DDS
5. A pragmatic approach to open architecture is required
6. High quality is essential
7. There must be an intuitive integration linking managers' workstations, secretarial workstations, and the other components of the system.
Number 3 is the most striking of the guides offered by McCracken, the man who drove the genius of bundling the rising DDS of the 3000 with a crack database. But in '84 HP was already considering IMAGE a database that needed a successor. The vendor was following in IBM's wake, right down to a new partnership with a small company built by an IBM ex-pat. Interex also recognized that Alfredo Rego -- "the man behind Adager" -- was on par HP's CEO, John Young. Both gave 1984 user conference speeches, but Rego recognized that IMAGE was to remain the force behind the 3000's success.
It wasn't going to come through a new processor family -- although the Spectrum project's 32 bits were critically overdue. Like today, software mattered more than hardware like Itanium. Oracle's database, built upon the same IBM roots, will determine the fate of the last remaining OS that HP ever built with its own R&D. Databases are lynchpins.HP saw as much when it partnered with Esvel Inc. The firm founded by Kapali Eswaran, one of the founding members of the IBM System R relational DB product, would develop "scalable database architecture for HP." The next product turned out to be Allbase, but HP already wanted a common database among its real-time, scientific (HP-UX) and office systems.
Like then, the vendor's reaching for some commonality with its Itanium futures. Last year Intel was announcing new underwear for the chip the industry forgot, promising that Xeon architecture would share base elements with Itanium. HP wants to have it both ways -- a market in a the commodity space along with the power of software built on proprietary hardware. You've still got that kind of power in your MPE-IMAGE world. Because Oracle's got HP by the scruff of its enterprise neck, the software still calls the plays. But now HP doesn't control the database -- to the point of seeing customers define themselves as Oracle shops. Oracle's not leaving HP computing. It's departing the computing most profitable to HP.
Esvel was the first step that HP took toward embracing an industry standard for its enterprise business. Back in 1984 the little company had already delivered the seeds of DB2 to IBM. HP was chasing Big Blue in every field but instruments back then. The vendor which created the HP 3000 believed in a pragmatic approach to open architecture: standards were less important than reliable value. In less than seven years HP didn't believe that anymore, driving the Open Enterprise with open systems.
Allbase earned a few footholds in the Open Enterprise, but IMAGE ruled the 3000's roost. Just like Oracle does today, HP's database had become the common coin of computers for HP business. You couldn't switch over billions of records without a lot of magic in 1984. Hewlett-Packard had the right idea about touch interfaces, but the wrong technology and message. This May the message is in the hands of the software providers, not the hardware makers. HP used have R&D enough to be both, which is what still makes the 3000 value durable beyond all accepted wisdom.
May 18, 2012
Rising Sun, setting Unix: HP's next migration unfolds in secret slides, emails
Ever wonder what the demise of the 3000 inside HP looked like? The event that reshaped all of our careers surfaced suddenly for some. For other community members, the vendor's departure was inevitable, given the indicators they followed. The week the US courts lifted the inevitable veil off HP-UX. Hewlett-Packard used its business acumen to decide the lifespan of its 3000 business. Now we can see what that kind of review looked like, thanks to Oracle and a fired HP CEO.
There is little explanation for how Oracle knew which secret emails and slides to uncover but one -- Mark Hurd and his leave-behinds at HP had these maps in hand. They knew exactly what to request in the discovery phase. It's unprecendented, to my eye. I saw an HP purchase order for $22 million per quarter paid to one vendor. If you wonder what something like an $88 million annual PO looks like, click on the graphic above. HP was spending like this for years, all to ensure that Intel would keep developing and creating Itanium processors. It wasn't spending anything to migrate HP-UX to a non-Itanium, commodity chip. Before long, these Unix customers -- plus ones using VMS, NonStop and more -- will do that migration instead. Linux on Intel. I can't even guess what NonStop or VMS will do.
These are the heart of HP's remaining proprietary computing environments. NonStop, OpenVMS and HP-UX use Itanium as crucially as a liver in a human body. Pull out Itanium from HP's futures and you have no more reason for any customer to leave their apps on these operating systems. Because the OSs don't run anywhere else. HP knew this and talked about it, both in its internal meetings as well as high tension negotiations with Intel. It's just that HP was saying something very different to the public. So was Intel. Anybody who believes Intel has other ideas about Itanium futures needs to read a few of the released emails.
If you don't have time for that, just scan the PowerPoint slides. There's a stunning one below from 2007, mapping steep declines to zero for the Itanium computers. (Click it for details.) You can look at the "Blackbird" proposal from an exhibit, too -- the one where HP sized up the pros and cons of buying Sun. (View the Blackbird)
A reporter from All Things D, the tech website run by the conservative Wall Street Journal, posted these emails and slides that were once secret, but now released by the court hearing lawsuits. Arik Hesseldal's article is must-reading for anyone who needs to plan an IT architecture or report on futures to CEOs or VPs of Finance. Hesseldal sums up HP's own view of the future of the company's only single-vendor 3000 migration target.
Key phrase: HP-UX, its version of Unix developed specifically for Itanium servers, “is on a death march” because of Itanium’s inevitable demise.
Why care, if you're already migrated off the 3000? It's as simple as an ostrich. If you've put your company's money on the HP-UX platform -- and think it's got a good run left in it -- you're hiding in the sand. It pains me to have to acknowledge anything that Larry Ellison's Oracle asserts. But there's no other reason to believe this won't work out the same as the 3000's evaporation off HP PowerPoints, strategy statements or price lists. The end is more than near. It's nearly here.
Update: HP's also dropped its own stink-bomb of documents, later in the same day, several emails plus pages of text message transcriptions between Oracle salesmen and execs. Most notable: an email from Lorraine Bartlett last March, just days before Oracle's pullout from Itanium. Bartlett, VP of Marketing for the HP-UX host Business Critical Systems, is effusive in praising her company's message about HP-UX futures. HP's "Kinetic" strategy, shared with analysts in March that was "a big hit, and really resonated," included messages about "HP-UX unbound" and a common socket design that Intel was announcing to give Itanium chips the same underwear as Xeon chips. The texts between Oracle sales people and managers have a college frat-boy tone to them -- but seem to be in HP's bomb only to show that Oracle knew the HP-UX competitor Solaris was "a pig with lipstick." (Warning, salty language there.)How close is the HP-UX end? Five years ago HP planned to end its Itanium revenues by 2013. Yeah, next year. Even that decision was costing the vendor $488 million over four years. HP spent it to keep its customers on HP-UX and the other OSs. All along, HP insisted again and again that Intel was doubling down on Itanium's future. It has even gotten some veteran customers to dig heads into the sand. That's easy to explain. Like concussion stats in US football, reports of HP leaving proprietary environments threaten long-time careers. Plus clients the size of Amtrak and McGraw-Hill.
At least now our community's customers can now see examples of the language and philosophy and schemes that made up the 3000's departure. "Don't possibly signal to world end of roadmap..." versus "We'll have roadmap updates in the future." A product relies on growth from the outside market, plus the technology becomes too costly for HP's budget. That's the 3000's story from HP's view. No different, except in number of customers, from today's Itanium story. Five years ago HP worked up an estimate of the price to move HP-UX to the commodity Xeon chips. About $100 million, it learned, to make the Itanium dead-end go away. But HP opted for a $88 million per year alternative with a short future for its commodity environments. It propped up the chip instead of reinvesting in development its own OS products. It made those decisions while its CEO slashed R&D budgets below the bone.
And that CEO continues to determine the future of HP-UX, even after HP fired him. See, Mark Hurd got himself hired by a company working to kill off HP's Unix. Larry Ellison called the board's ouster of Hurd -- after Hurd's creepy and sad debacle of chasing a reality TV actress, instead of his wife -- one of the worst decisions HP ever made. With the release of these secret emails, it looks like HP made a decision even worse. To a customer who uses HP's Unix, VMS or NonStop, HP never should have let a competitor in the Unix market hire Hurd.
A few months ago a respected tech icon in the NonStop market wrote about the future of HP-UX. Dr. Bill Highleyman thought that the forecast which I'd offered on Itanium was dubious -- that announcing an Odyssey project to get the best of HP's Unix onto Linux meant the end of Itanium, therefore also HP-UX -- and it was nearby. I would invite Dr. Highleyman, plus anyone in our community who remembers losing hundreds of thousands or even millions of dollars of MPE business, to have a look at the archive of documents that's been curated by All Things D.
Some of the least fortunate customers will now have to migrate away from HP's Unix. Or they can live in the fine-tuned OS afterlife beyond HP. Given the health of Hewlett-Packard's business these days, maybe that post-HP afterlife will seem more lively.
At the least, life in the afterlife will honor the economic advantage of an OS built for a chip the vendor owns, like MPE and PA-RISC. Unix planners are being invited on an HP Odyssey to commodity computing. How anybody can cost-justify that journey, instead of a genuine commodity solution -- well, that feels like a well-kept secret. What's going to be out in the open in the lawsuit trial is more muck, and murk, around the genuine future of the last proprietary OS that HP's ever going to build.
May 17, 2012
Emails show HP studied Itanium's end in '07
Oracle released a thick sheaf of HP emails this week to prove HP-UX has a dim future. Oracle sells an alternative to HP's Unix, Solaris, a campaign led by former HP CEO Mark Hurd. There's juicy goo in these pages that shows how a loyal customer base using an HP product gets treated during that product's downturn.
In Oracle's campaign to convince customers that HP's been managing an Itanium demise for years, lawsuit emails are the ammo. The two companies are at legal war by now, dueling lawsuits that will go to trial later this year. HP wants a database for its Itanium server customers. Oracle wants to quit maintaining development for the Integrity machines. Being ever-eager to do battle, Oracle released documents for the public to "use in deciding who's right about Itanium's future." You can look over the originals online. The emails are from HP executives and are part of the lawsuit evidence.
Over and over, in emails between the GM of Business Critical Systems Martin Fink and others at the top of HP's computing food chain, the messages show that Itanium -- and the future of HP's Unix -- has long had an inevitable end. One that HP has seen clearly and communicated less so. HP has been pressing Intel to continue with Itanium development for almost five years by now. While Hewlett-Packard hasn't been planning the end of HP-UX, the end of Itanium amounts to nearly the same thing -- because HP's Unix won't ever be ported to the Xeon/x86 Intel processors.
The flood of HP's email from Oracle offers a look into HP's corporate plan to hang onto enterprise customers who use a proprietary HP enterprise platform. It's a situation similar to the one HP 3000 users faced in 2001, when Hewlett-Packard made an internal decision to stop developments on MPE/iX and to shift onto the Itanium hardware. HP held all the cards in that decision: OS, PA-RISC chip design and manufacture, even the database. This Email-Gate, however, shows how relying on Intel and Oracle for the Unix chip and database left HP with a "binodal" choice, according to a 2007 company email to HP's Executive Council. At that time HP was a strong supporter of converting your HP 3000 to a Unix system.
Binodal, for anyone not familiar with thermodynamics, is "the boundary between the set of conditions in which it is thermodynamically favorable for the system to be fully mixed, and the set of conditions in which it is thermodynamically favorable for it to phase separate." HP had a point in '07 where Intel told the vendor that carrying Itanium further required core redesign. Costly, in the set of conditions to rebuild. Or Intel could crash-land the processor family, and move away from the wreckage.
"The choices appear binodal," said the email from Joe Lee in Sept. '07 about Itanium strategy. "An expensive plan vs. a crash landing. [Intel CEO] Paul [Otellini] added that we need to address the inevitable on the future of Itanium, stressed that Intel cannot keep losing money on the product line, and asserted that what's really needed is a compelling migration story."
That would be a migration from the Itanium-driven Integrity servers to the HP ProLiant systems run by the Xeon family of chips. HP didn't tell Intel it was developing a project called Octane, a next-gen mission-critical business system to be run on AMD chips. "[CTO] Shane [Robison] says they are most freaked about Octane," Lee wrote, "but discovering that we weren't porting HP-UX rocked their world. Shane wants the data on what it will take to port HP-UX to x86."
That's a port that Fink just told the world wouldn't be happening. Itanium's leash looked so short in '07 that both sides thought it wouldn't be alive in 2014. HP might have had a reason to move its Unix forward, if they'd bought Sun like they proposed in 2009. There's a fascinating PowerPoint deck that describes that proposal, too. HP figured it might help prolong Itanium's lifespan.
The HP documents released by Oracle are online in a Scribd storage area for anyone to read. One PowerPoint deck says that HP-UX "is on a death march" because of Itanium's demise. But HP was more worried about IBM at that point than about Oracle. IBM might have bought Sun, and "it [then] isolates and exposes HP-UX as 3rd tier player, accelerates our decline (product/service) as customers look to consolidate vendors." HP threw its money into supporting extra Intel manufacture and design of Itanium's 9300 and Poulson series, while Oracle gambled on the Sun Unix. The lawsuit's outcome might help determine who won in the short run.
May 11, 2012
Smiles, but less joking at 2012's HP Discover
HP's announced its executive keynote lineup for the June HP Discover 2012 show, the biggest HP-centric conference for the year. At the last HP Discover the company was still debating with Oracle over the future of the database on HP servers, but it stood on the verge of a splash into the tablet marketplace. That was just two months before the TouchPad belly-flop and one quarter in front of the ouster of a second CEO in as many years.
Current CEO Meg Whitman will speak on Making Technology Work for You, "focusing on the challenges that enterprises face today, and the breadth and depth of HP solutions that help them to address those challenges." The conference runs June 4-7 in its usual location on the Las Vegas strip, this time at the Venetian Hotel and Sands Convention Center. A SWSMYT code at registration earns a $300 discount.
Like last year, another Discover keynoter has a strong entertainment platform. DreamWorks Animation CEO Jeffrey Katzenberg will be onstage with Whitman and later hosts an exclusive preview of DreamWorks' Madagascar 3: Europe's Most Wanted. Less obvious comedy won't be on the stage this year, after Jake Johannsen opened for CEO Leo Apotheker in 2011. One ironic Johannsen joke that's not likely to be recycled: "As a comic, it seems to me there'd be a joke I could make about HP's last CEO... but there's not."
Whitman might not see the humor in such a barb, but the commentary on HP's show -- produced with the aid of the Connect user group -- may run just as unfettered. Last year the vendor hosted a raft of bloggers in a new program to earn more notice for the conference. Geekzone made the conference a feature on its tech blog, and the longest keynote of that show was an HP Cloud marathon full of boardroom-level buzzwords for IT planners. HP's putting the buzz on after-hours with a closing show a bit less legendary than last year's Sir Paul McCartney concert. The closing celebration sponsored by Intel starts with Sheryl Crow and finishes with the founder of the Eagles, Don Henley.The executive VP of HP's enterprise computing business is now Dave Donatelli, more entrenched than ever after HP kicked Ann Livermore into the company's board of directors suite. Donatelli leads the list which HP offered of its key executives speaking at the show. Todd Bradley appears, now executive vice president of both Printing and Personal Systems, even after that TouchPad debacle. Others include Bill Veghte, chief strategy officer and EVP for HP Software; Mike Lynch, executive vice president, Information Management; and John Visentin, executive vice president for the company's support and consulting arm, Enterprise Services.
HP's Q2 '12 quarterly results report (on May 23) will be about two weeks behind in the rear view mirror when HP Discover opens up. This has always been a show aimed at an audience well below the financial analyst crowd. The company discounts professional certification for IT workers who attend. Last year's show had more than 10,000 attendees and 1,000 partners on hand, the vendor reported.
Discovering something to hear before the gentle humor of Madagascar or the dulcet tones of Crow can be planned using the online session discovery tool at the event's website. Three months ago, only four sessions were listed online as being delivered from customers. Now that wing of content is beefed up to 160 with the likes of a strategy review from Brian O'Reilly of the Las Vegas Sands, who's giving a case study to show "how Las Vegas Sands (Venetian) accelerated its IT transformation program." IT managers from Royal Bank of Canada, Blue Cross Blue Shield of Florida, and payroll provider Paychex will also speak.