October 17, 2014
Tracking MPE/iX Vulnerability to Shellshock
Security experts have said that the Shellshock bug in the bash shell program is serious. So much so that they're comparing it to the Heartbleed breach of earlier this year. Many are saying Shellshock is even more of a threat.
Once again, this has some impact on HP 3000s, just like Heartbleed did. But you'll need to be managing a 3000 that's exposed to the Internet to see some risks to address as part of system administration. Web servers, domain name servers, and other net-ready services provide the opportunity for this malware. There's not a lot of that running in the customer base today, but the software is still sitting on the 3000 systems, programs that could enable it.
Authorities fear a deluge of attacks could emerge. The US government has rated the security flaw 10 out of 10 for severity.
Bash is open source software, and our expert on that subject Brian Edminster is working on a specific report about the vulnerabilities. Hewlett-Packard posted a security bulletin that points to a safer version of the bash shell utility. But that version won't help HP 3000s.
It's not that HP doesn't know about the 3000 any longer. The patching menu above shows that MPE is still in the security lexicon at Hewlett-Packard. But Edminster thinks the only way to make bash safe again on MPE might be to port it a-fresh. "The 3000's bash is version 2.04, but the version that's considered 'current' is 4.x (depending on what target system you're on)," he said. "So if v2.04 is broken, the code-diffs being generated to fix the issues [by HP] in late-model bash software won't be of much (if any) use."One report in a UK newspaper suggested that "if online retailers use older, mainframe-style computing systems, they are likely to be vulnerable." That sounds like one way to describe the Ecometry sites still selling online with MPE versions of that software. Many of those customers do not have the 3000 directly exposed to the Internet, though.
The bug allows hackers to send commands to a computer without having admin status, letting them plant malicious software within systems.
HP has released a software update to resolve the vulnerability in HP Next Generation Firewall (NGFW) running Bash Shell. Version NGFW v126.96.36.19953 will fix the breach in that that product. But NGFW doesn't run on MPE/iX.
Edminster forwards this advice while he's working on his report.
It's most likely to be an issue for web services that use bash scripts to process web-page input for example, such as machines exposed to the Internet, and those that have services that can accept input from the 'net. I'll work to round up as many examples of potential places this can be felt on a 3000, so that folks know where to look.
Yep — this one is messy, because it's not quite so cut-and-dried as HeartBleed was.
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October 15, 2014
Signed malware stalks HP's Windows boxes
HP will be revoking a security certificate for its Windows-based systems on Oct. 21, and the vendor isn't sure yet how that will impact system reliability.
The bundled software on older HP PC systems has been at risk of being the front-man for malware, according to a report in the Kerbs on Security website. This code-signing is supposed to give computer users and network admins confidence about a program's security and integrity. HP's Global Chief Security Officer Brett Wahlin said the company is revoking a certificate it's been using even before 2010.
HP was recently alerted by Symantec about a curious, four-year-old trojan horse program that appeared to have been signed with one of HP’s private certificates and found on a server outside of HP’s network. Further investigation traced the problem back to a malware infection on an HP developer’s computer.
HP investigators believe the trojan on the developer’s PC renamed itself to mimic one of the file names the company typically uses in its software testing, and that the malicious file was inadvertently included in a software package that was later signed with the company’s digital certificate. The company believes the malware got off of HP’s internal network because it contained a mechanism designed to transfer a copy of the file back to its point of origin.
The means of infection here is the junkware shipped with all PCs, including HP's, according to HP 3000 consultant and open source expert Brian Edminster. In this case, the revoked certificate will cause support issues for administrators. The certificate was used to sign a huge swath of HP software, including crucial hardware and software drivers and components that are critical to Windows.
"This is one of the reasons that I absolutely loath all the 'junkware' that is commonly delivered along with new PCs," Edminster said. "I end up spending hours removing it all before I use a new PC." Recovery partitions on Windows systems will be at unknown risk after the certificate is pulled Oct. 21, too.HP's Windows computers have recovery partitions on the boot hard drive that can restore a system to its original, factory-shipped software configuration. That configuration includes the junkware.
"For me, this junkware is just chaff," Edminster said, "and an opportunity to clog up a machine that's supposed to be pristine and new. To say nothing of increased opportunities for the sort of thing outlined in the Kerbs article."
HP's Security officer Wahlin said that admins will have to wait to see the impact of that revoked certificate, according to the article.
The interesting thing that pops up here — and even Microsoft doesn’t know the answer to this — is what happens to systems with the restore partition, if they need to be restored. Our PC group is working through trying to create solutions to help customers if that actually becomes a real-world scenario, but in the end that’s something we can’t test in a lab environment until that certificate is officially revoked by Verisign on October 21.
October 10, 2014
When Smaller Can Be Better
Hewlett-Packard has chosen to cleave itself into two much smaller companies. It will take most of the next year to make that a reality. But it might be an advantage to return to working with a more nimble company. Well, an advantage to the 3000 site that's migrating to HP's other computer enterprise solutions, or has done so recently.
Over at the New York Times, the tech writers found something to praise even while they questioned the wisdom of the move.
In one day, Meg Whitman has created two of America’s biggest companies. All she had to do was break apart Hewlett-Packard, the company credited with creating Silicon Valley. HP Enterprise is targeting a market that appears full of potential innovations, while HP Inc. seems stuck in the low-margin consumer hardware business that has proved a slog for companies not named Apple or Samsung.
It appears Whitman has found a vision: one that looks a bit like the IBM of the West — with an emphasis on products rather than IBM’s consulting services — and another that looks a bit like Compaq Computer, a Texas computer company that HP controversially merged with 12 years ago.
A long time ago, in a marketplace now far away, 3000 owners wished for some breaking off. The HP 3000 wasn't a part of Hewlett-Packard's vision? Fine. Sell the unit off and let's get on with a focused future. At the time, the business was said to turn over $1 billion yearly. Even at half that size, it would've been big enough to survive with customer loyalty. If the 3000 had nothing else going for it, you could count on loyalty.
All opportunities now gone, you say. You just cannot break up an enterprise tech player like that. Then Whitman chops a massive company into two much smaller parts. Smaller has been better for the typical 3000 customer for a long time. Yes, there are times when there are advantages of being big: When a 3000 user got more from a company which sprawls to supersize, in sales and scope of solutions. You get predictability, alliances and headroom from companies sized HP. The vendor so lusted after being No. 1, which did not become a path to long-term success.
3000 community members understand that smaller can be better -- not bigger -- especially when they use what the independent vendor lives upon. Small companies respond faster, polish relationships, and commit for life.
Faster response can mean software that is enhanced sooner, or answers that resolve problems more quickly -- because a smaller company has fewer layers for a customer to dive through. Relationship polishing is the personal attention to a company of any size: the kind of experience that HP 3000 managers, who may now be CIOs and CTOs, recall getting from a smaller HP.As an example, the Support Group knows its customers on a first-name basis. The operations at this 3000 provider include a hotsite datacenter located about 100 yards from the call stations. This integration of support and cloud services is natural, seamless, and don't require a special manager to coordinate.
You can get that kind of integration in an encounter from HP for a migration platform. Whether it slips smoothly into the budgets of small to midsize companies is less certain. So much of the HP offerings don't come from Hewlett-Packard while the vendor engages smaller customers. Independent partners deliver services in what HP considers a smaller marketplace.
Then there's that "outside the product" call that a 3000 user makes to a long-time supplier. This call is really about the 3000, not the product in the support contract. But that doesn't make a difference to a smaller company than HP. Large IT vendors don't even have a coding category to let that call begin, let alone be resolved.
Finally there's the final chapter of a relationship between smaller customer and smaller provider. I call this "commit for life" because it represents the intention to maintain a relationship to the very end, not when a business strategy changes in a boardroom. Years ago, Robelle told the community it would support the 3000 until at least 2016. As long as there's still a customer around, STR Software says they'll support them on the Fax/3000 solution. Commit for life means a smaller vendor's lifespan, most of the time, -- not the lifetime of its business plans.
October 09, 2014
TBT: A 3000 Newsworthy Birth Day
The first issue of the Newswire ran its black and red ink across 24 pages of an early October issue. Inside, the first FlashPaper late-news insert had been waiting a week for main-issue printing to catch up with mailing plans.
In our ThrowBack to this week of 1995, the first issue of The 3000 Newswire rolled out into the mails. The coverage of the HP 3000 was cheerful enough to encourage a belief that the computer would run forever -- but 19 years of future was far from certain for either the system or the first 3000-only publication. Volume 1 (the year), Issue 1 came out in a 24-page edition, the same page count of the printed issue that just mailed this Fall. At the Newswire's introduction, one user group leader wondered aloud, on a bus ride during the Interex '95 conference in Toronto, "what in the world you'll might be able to find to fill up the news in Issue No. 2."
The last of the competing HP-only publications closed its doors 10 years later, when Interex folded its user group overnight. Interact, HP Professional, SuperGroup, HP Omni and others turned out the lights during that decade.
The Newswire's first mailed issue was carrying the news circulating in mid-August during an Interex conference. For the first time in 10 years, an HP CEO spoke at the Interex event. However, Lew Platt was a current CEO when he spoke to the 3000 faithful. David Packard was a former CEO and board member when he addressed the multitudes at Interex '85 in Washington DC.
Platt said that HP 3000 users had nothing to fear from a future where Unix was in vogue at HP. Earlier in the day, speaking before the full assembly of users, he said HP was going to making new business by taking out older products. At an editor's luncheon we asked him what that mission held for the 3000.
Platt explained his prior comments on cannibalizing HP's business to maintain steady growth. MPE/iX won't be served up in a pot anytime soon. "I don't mean leaving customers high and dry," he said. "HP has worked extremely hard with products like the HP 3000 to make the people who have bought them have a good future. We've put an enormous amount of energy out to make sure we can roll those people forward. I'd say we've done a better job than just about any company in the industry in providing a good growth path for those customers."
The CEO went on to explain how cannibalization would work. HP would take a product, such as a printer, that was doing perfectly well and may still be a leadership printer in the market -- and bringing in a new one before it's reached its end of life. If you substitute "business server" for "printer" in that plan, you can see how a computer that was doing perfectly well might see a new computer brought in before the end of its life. In that issue, the Newswire story noted that the project we'd learn to call Itanium six years later was going undercover, so that new product wouldn't lock up existing server business for a year before it would ship.
HP was calling the joint effort with Intel the Tahoe architecture, and Platt would be retired from his job before anything shipped.Sixteen more stories made up the news in that October of 19 years ago. The Series 9x9 line had an 8-user model introduced for just under $50,000. It was the era when a 3000's price was set by the number of its concurrent users. A 40-user 939 sold for $30,000 more, despite having no extra horsepower. User-limited licensing, which HP maintained for the 3000 while Windows was free of limits, would continue for the next six years.
An Interex survey said that three-fourths of 3000 customers were ready to reinvest in the line, but the article focused on the better value of the server in the users' estimation. HP's Unix servers were compared to the 3000.
The story atop Page One addressed the limits of those user-based licenses, and how a requested MPE improvement would help. SIGMPE's Tony Furnivall said that "if you could have multiple, independent job queues, the same algorithms ight be used to limit the number of active sessions." Any 8-user 3000s that were replaced with 800-user systems would be subject to more costly software licenses from third party firms. User-based licensing was prevalent, if not popular, in the 3000 world of October 1995.
On the first three inside pages were a story about the country's oldest pastime, a pointer to a then-new World Wide Web that included a Newswire page, and a full-page HP ad that said, "You want open systems computing. You don't want to move mountains of critical data to a new platform." Hewlett-Packard would hold that view for about six more years. The next 13 have made up the Migration Era, with a Newswire printed across every one of those years. The Newswire has been published more than twice as long during those migrations as all the years before HP announced the end of its 3000 plans.
Cal Ripken, Baltimore Orioles baseball all-star, was breaking a record for consequitive games played that began 13 years earlier. "We're here in your hands this month because of the legendary, Ripken-esque performance of the 3000 deserves more attention," an editorial crowed.
A PC and printer executive at HP got the job as chief of all computer business. It was the second additional layer of management inserted between the CEO and the 3000 group. Rick Belluzzo was 41, commanding a $20 billion sector, and didn't have a specific job title. Olivier Helleboid was 3000 General Manager three levels down.
Windows 95 was launched at that Interex show in Toronto with a mountaineer rappelling down the CN Tower, stopping halfway and "using Win95 from a wireless laptop. It was all too much for Birket Foster, president of HP 3000 channel partner M.B. Foster Associates and a supplier of Windows products."
"It's all a media event," Foster said. "Is the average user going to do that? It's all way too much hype for what's being delivered." A survey showed no manager had installed Win95 company-wide yet.
HP's managers shed their coats and ties at a roundtable en masse, after customers pointed out that IBM's officials dressed casual on the conference's expo floor. A technical article detailed the relief that PatchManager/iX delivered for MPE patch installs. New 3000 integrators were announced for manufacturing and FileNet workflow document services; the latter had six companies listed in the US.
One of those in-between HP managers said the company "now sees the 3000 as something sold to new customers mostly as an engine for specific applications, like manufacturing or healthcare systems." Porting applications from other systems would be made easier with the first C++ for MPE, the freeware GNU C++ suite, bootstrapped by ORBiT Software's Mark Klein. The GNU package made possible a host of open system tools within two years. "HP is helping to distribute GNU C++ form its HP 3000-based World Wide Web server on the Internet," the story added.
Ultimately, the Web server software HP shipped for MPE/iX was ported from Apache source code from the open systems world. HP told its DeskManager office communications users to expect enhancements first on HP's Unix systems. Helleboid, forecasting HP's final act in the 3000 world years later, said in the first Q&A that HP would collaborate with arch-rivals IBM, Digital and Sun to create "a complete environment for Unix applications."
Helleboid also said that the 3000's Customer First strategy would be presented to other HP computer groups such as its Unix group. "Customers are looking for this kind of relationship," he said in a forecast of using 3000 ideas to improve replacement business models.
October 07, 2014
HP decides to break up the brand
And in one stroke of genius, it's become 1984 again at Hewlett-Packard. Yesterday brought on a new chorus for an old strategy: sell computers to companies, and leave the personal stuff to others. Except that one of the others selling personal computers, plus the printers usually connected to PCs, is another generation of the company. The CEO of Hewlett-Packard is calling the split-off company HP Inc. But for purposes of mission and growth, you could call it HP Ink.
To be clear, that's a broad definition we used up there to define that stroke of genius. Brilliance is something else, but genius can be just a powerful force for good or for ill. Definition 3 of the word in Apple's built-in dictionary on my desktop calls genius "a person regarded as exerting a powerful influence over another for good or evil: He sees Adams as the man's evil genius." It's from Latin meaning an attendant spirit present from one's birth, innate ability, or inclination.
What's become the nature of Hewlett-Packard, its innate ability? The company was founded on one ability and then had a second grafted onto its first success. It's been 30 years now since 1984, when the vendor which invented MPE and the 3000 has been inventing products for consumers. The LaserJet opened the door for a torrent of ink and toner to sweep around traditional technology innovations. Before there was a need for a battalion of printing devices and a phalanx of personal devices, the old HP logo represented business and scientific computing. Plus a world-leading instruments business whose profile was an icon for what HP was known for best.
HP's been down this path before, splitting off those instruments into Agilent in 1999. A few months later Carly Fiorina won the approval of then-ink czar Dick Hackborn, placing her in the CEO's seat. Yesterday's announcement of splitting the company into two complementary entities returns the Hewlett-Packard name to enterprise computing. But it seems the core values of the only major IT vendor named after its founders won't rebound into favor. Not on the strength of just splitting off high-cost, high volume ink and PC business. HP needs to impress people with what it builds again. Not just what it can aggregate and integrate.
A few notes we took away from that announcement:
- HP says it aims to be two Fortune 50 companies after breakup, but more nimble and focused
- "The brand is no longer an issue," say HP executives, and breaking up the brand will create equal-sized businesses.
- An extra 5,000 layoffs come along with the split-up. The running total is now 55,000 on the clock that started in 2011.
- HP likes its own idea; prior chairman Ralph Whitworth called it a "Brilliant value-enhancing move at the perfect time in the turnaround."
- CEO Meg Whitman says HP's turnaround made the breakup possible.
- Its stock traded more than five times its usual daily shares on breakup news, and picked up almost 5 percent in share value. HPQ also gave away all of that gain, and more, the very next day.
That's how it goes in the commodity computing market: easy come, say the customers, and easy go. It might be why Whitman is helping the brand called Hewlett-Packard break away from the commodity business.Some analysts have noted the current board chair and CEO of today's un-split entity, the one still called HP, will take charge of the enterprise arm of the company's future. This, they reckon, is where the real innovation and action will take place. The part of the company that pulled Hewlett-Packard into the consumer reseller model, then swallowed up the second-place PC provider in Compaq 12 years ago, has been set free to float at the whims of a roiling market. HP Inc will have to compete without a dynamic mobile product line, and so we can wish the new-ish part of the vendor godspeed and good luck. They'll need it against the likes of Apple and Samsung, or even Lenovo and Lexmark.
HP's story last year was that the company was better together, after hearing seven years of calling for a split up. High volume, low profit business was suited to a market of 1999, but once mobile devices and the Web changed the game for data processing, PCs and printers just wanted different resources than servers and software demanded. Now CEO Meg Whitman says Hewlett-Packard and HP Inc. can focus and be nimble. From a 3000 customer's perspective, that focus would have been more useful 13 years ago, when growth demanded HP buy Compaq for $25 billion on the promise of becoming No. 1.
Being No. 1 didn't last long enough to pay the bills incurred to do so many things at once. Now Whitman says that three years of turnaround action has taught the company how to do more than one thing at a time. There's plenty to do. Maybe the first thing is to choose a new color to represent its oldest business. She said HP blue to going with the multi-colored ink of HP Inc.
Hewlett-Packard didn't need multiple colors to succeed on that 1984 day it added printers to its product line. But it was a company wrapped in a handsome slipcase of collegial traditions, still working to win its way to the front of enteprise IT selections. Canon and Hewlett-Packard collaborated to sell a laser printer to anyone, not just the customers buying HP's specialized business servers. Before long, the trails it blazed in consumer sales gave it an opening for its color ink, which at one point contributed 55 percent of the company profits. That's the consumables bringing home the bacon, not the nearly-disposable printing devices.
During the era when the 3000 was given its last several years of HP life -- first five, then seven, and finally nine -- IBM was happy to point out the passion for printing at HP. One thunderbolt of an IBM sales rep called the company Inky at a HP user group meeting speech in Houston. Those were the days when everyone in 3000 territory was looking at a new future. About three fourths of the business machines became computers without Hewlett-Packard on their badges. Still, the fungible nature of enterprise computing -- that ease of replacement that HP preached against MPE -- also turned out to be true for its own Unix business line. Somehow, the same Windows that would be suitable for 3000 shops was also a good-enough migration target for HP-UX customers.
Unix had its day, and Linux was the new wave and not channeled through a single vendor. HP invited comparisons. Now its customers can compare companies, starting next fall. Do business with HP Inc. and use Windows and probably Linux on HP's iron. Or choose a company that says it's now focused on the new style of computing: cloud services, big data, security and mobility. The company does not mean to suggest there's no place for in-house servers. But it's focused on those four areas, with a mention of software during yesterday's 45-minute presentation and Q&A.
Our readers will remember software. In MPE and IMAGE they got fine-tuned and refreshed software each year, although in some years the refreshes were faint. By the middle of the 1990s Hewlett-Packard had to embrace Windows to remain on planning short lists. Now the Hewlett-Packard Enterprise has to attract and retain ever-mobile business on the strength of in-house innovations. Because if you want industry-standard commodity computing, HP Inc. is ready to take that business. It will soon be loose from the legacy of Hewlett-Packard.
October 06, 2014
HP to break itself, dividing into 2 companies
Hewlett-Packard announced this morning that it will divide itself into two publicly-traded corporations, a move that shareholders and stock analysts have been demanding and predicting for years. The division of the company will be along product lines. The business server operations will be contained in the new Hewlett-Packard Enterprise, while PC and printer businesses will comprise the new HP, Inc.
The vendor said in a press release that the restructuring will "define the next generation of technology infrastructure." The reorganization will also spin out the least profitable, but largest, segment of HP's business into its own unit. HP still ranks in the top five among PC makers and is one of the largest makers of printers in the world.
Meg Whitman will be CEO and president of the Hewlett-Packard Enterprise company. Pat Russo will chair a new Hewlett-Packard Enterprise board of directors. Last month Hewlett-Packard -- the full corporation founded by Bill Hewlett and Dave Packard in 1939 -- had named Whitman as chairman of the board and CEO. By breaking up the company, Whitman will cede some control of its most competitive and popular product segments.
Dion Weisler will be the head of the new HP, Inc. as CEO and president. Whitman will chair the HP Inc. board of directors. HP said it will still meet its profit forecasts for the fiscal year that ends on Oct. 31. It also said that it "issues a fiscal 2015 non-GAAP diluted Earnings Per Share outlook of $3.83-$4.03." That is the sweetest way of forecasting a profit, using non-Generally Accepted Accounting Practices. But it's not clear if that's HP Inc. profits, or profits for Hewlett-Packard Enterprise. And the vendor said it would take all of fiscal 2015 to complete the transaction.
“The decision to separate into two market-leading companies underscores our commitment to the turnaround plan," said Whitman, who's led HP through three years of a five-year turnaround plan. "It will provide each new company with the independence, focus, financial resources, and flexibility they need to adapt quickly to market and customer dynamics, while generating long-term value for shareholders.
"In short, by transitioning now from one HP to two new companies, created out of our successful turnaround efforts, we will be in an even better position to compete in the market, support our customers and partners, and deliver maximum value to our shareholders."Much of the rest of HP's release deals with the visions and mechanics of dividing a $128 billion company into a classic and post-modern product manufacturer. Except that nothing is classic about the Hewlett-Packard Enterprise company, with the exception of its three proprietary operating systems: HP-UX, OpenVMS, and NonStop. The company has announced that HP-UX will be extending some of its enterprise-grade features to a version of RedHat. OpenVMS will be curtailed to only the newest generation of servers for the latest version of the OS. And NonStop, the most specialized of the three operating systems, is getting a full port to the x86/Xeon architecture -- an escape hatch from the Itanium chips that power Integrity servers.
But HP is retaining the Financial Services unit inside the Hewlett-Packard Enterprise corporation. It's a move the company noted will give financial advantages to customers and partners.
Hewlett-Packard Enterprise will have a unique portfolio and strong multi-year innovation roadmap across technology infrastructure, software and services to allow customers to take full advantage of the opportunities presented by cloud, big data, security and mobility in the New Style of IT. By leveraging its HP Financial Services capability, the company will be well positioned to create unique technology deployment models for customers and partners based on their specific business needs.
Additionally, the company intends for HP Financial Services to continue to provide financing and business model innovation for customers and partners of HP Inc. Customers will have the same unmatched choice of how to deploy and consume technology, and with a simpler, more nimble partner. The separation will provide additional resources, and a reduction of debt at the operating company level, to support investments across key areas of the portfolio. The separation will also allow for greater flexibility in completing the turnaround of Enterprise Services and strengthening the company's go-to-market capabilities.
"Over the past three years, we have reignited our innovation engine with breakthrough offerings for the enterprise like Apollo, Gen 9 and Moonshot servers, our 3PAR storage platform, our HP OneView management platform, our HP Helion Cloud and a host of software and services offerings in security, analytics and application transformation," continued Whitman. "Hewlett-Packard Enterprise will accelerate innovation across key next-generation areas of the portfolio."
R&D innovation has been a troubled business operation for Hewlett-Packard since the early years of this century, until Whitman announced a shift in the vendor's priorities in 2012. She named Martin Fink, the former leader of the embattled Business Critical Systems unit where those operating systems are built, to lead HP Labs. Within a year, the Labs were creating The Machine, a way forward into a new architecture for computing -- but one that could demand up to 75 percent of the Labs' resources.
It's not yet clear where HP Labs will go in the reorganization, but the Enterprise unit seems to make the most sense. Labs also contributes to product releases in the printer and PC lineups. HP mentioned the forthcoming 3D printer lineup in the breakup announcement.
HP was to have a meeting with financial analysts in just two days, but "as a result of this separation, its Oct. 8 2014 Securities Analysts Meeting has been postponed." A conference call took place at 5AM today, and is available for replay at the HP Investor Relations website.
Whitman said only a year ago that a single HP was the right approach. She said the same strategy is still the right approach, but added that breaking up the company will accelerate growth. "We now operate from a position of strength," she said, citing a strong balance sheet and returns to shareholders. The stock was nearing $40 a share in recent months, a profound rebound from prices in the teens at the lowest point of the turnaround.
After the split up, shareholders of the HPQ security will hold shares in both companies, CFO Cathie Lesjak said in the confence call. It's a move that will prompt instant investment in the new HP Inc.
September 24, 2014
Did Charon get to where HP could've gone?
The past can't be changed, but that doesn't mean it's not useful in planning. There are still a surprising number of companies that want to stand pat without regard to the future of their hardware running MPE/iX. Some of it is old already, while other servers -- even those newest -- are now moving into their 10th year of service.
Hewlett-Packard's planning for the future of MPE/iX hosts once included a bold move. The operating system was going to run natively on Itanium-based servers, the IA-64 Integrity line (above) that hosts VMS and NonStop today. It was a project that did not make HP's budget cuts of more than a decade ago, and so the whole lineup got canceled. There might have been another way, something that HP could arrive at -- years after Stromasys started selling the solution.
Native hosting is always the preferred solution for an OS and its iron, sure. But there's so much virtualization these days; VMware is a significant market force. What if HP had taken MPE/iX and just put it onto another operating system's back? What if the OS that drives 3000 apps might have taken a ride in a carriage of Unix, or Linux?
HP did this sort of miracle once for the 3000, calling it Compatibility Mode. There was a massive revison of hardware and software to arrive at the PA-RISC generation, but the changes were transparent to customers. You ran your apps in CM, until you could move them forward. In the '90s, companies used compatibility mode for years, installing newer hardware and moving up to better performance by revising their applications.
"If all HP had done was to create a Compatibility Mode for MPE on IA-64," said ScreenJet's Alan Yeo, "nobody would have batted an eyelid about swapping to an HP-UX box to run their company's software."
At its heart, this is what Stromasys has done with its software. The only difference to the customers is that it's a solution not sold and supported by their hardware vendor."There was a huge effort, like HP should've moved MPE to IA-64, Yeo said. "It was totally nonsensical." And costly, too. Stromasys was discouraged while there were still thousands of customers of HP 3000s choosing where to migrate. Key technical trade secrets were not being shared, so Charon for the 3000 had to be tabled. HP came back to the idea after they'd lost more than half of the installed base to other vendors.
For the record, Windows migrations count as another vendor. If not for the fact that HP sells ProLiant servers, that percentage of 3000 sites lost to the competition would be even higher. When you cede the OS to another company, you can lose the leverage to call a site Your Customer.
This matters when looking at where virtualization operates today. Using a wide variety of hardware hosting, from HP's iron to many others, Charon does the carrying of MPE while it rides in the vehicle of Linux. It might have been HP-UX at one time, if HP had just modified its plans to make that move to IA-64 a less costly lab project.
Almost three years ago, Hewlett-Packard announced it would introduce a new version of Integrity servers, Superdomes no less, that could run the x86/Xeon family of chips. There's no delivery date, and most recently we hear the vendor's building The Machine. New OS, new chip design. The same old sweeping vision that created things like VMS, MPE, and NonStop. Costly? Martin Fink wants about three fourths of the HP Lab budget to get it built and customer-ready.
But that NonStop environment has gotten the Big Promise of a new native version, capable of running on the Xeon family. No deadline for when that will be delivered, either, but HP wants to retain those customers. The complexity of applications in MPE can pale when compared to the ultimate real-time computer system. NonStop clients have lock-in that encourages HP to do the grand sweep into the future for them.
At the time that HP will have Xeon versions of Integrity ready -- services that could host Linux and therefore cradle a virtualized MPE server -- Stromasys will have about five years head start in selling that solution. We'll be generous and figure the Integrity models that are ready for Xeon blades will sell in 2017. There might be a market for that, for some companies that still want a big vendor to rely upon. But HP could've had that market a decade ago, just by aiming for a CM for MPE.
Customers don't really care that much about genuine PA-RISC iron, or something called an HP 3000 If they did, there would be no traction for Charon at all. With every passing week, that continues to be proven untrue.
September 12, 2014
Can HP's cloud deals ground enterprises?
Editors at The New York Times seem to believe the above is true -- or more to the point, that cloud business will come at the expense of HP's hardware revenues. Nobody knows whether this is the way that HP's clouds will rise. Not yet. But a deal to buy an open source software company caught notice of a writer at the NYT, and then came a saucy headline.
HP Is Committed to the Cloud, Even If It Kills. The bulk of the story was about Marten Mickos, who sold his company Eucalyptus to Hewlett-Packard and got himself named as General Manager of HP Cloud Business, or somesuch. Open source followers will know Mickos as the man who sold mySQL to Sun, sparking some fury in a customer base that didn't want any connection to major vendor. (As it turned out, Sun wasn't really a major vendor at all, just an object for Oracle acquisition.)
This only matters to migrating customers who use HP 3000s, so if you're still reading and you're homesteading -- or migrating away from HP altogether -- what follows is more for sport than strategic planning. But once more, I'll remind readers that HP is looking for anything that can lift its fortunes. Selling enterprise hardware, like the Integrity servers which are the only island where HP-UX can live, has got a dim outlook. Selling cloud services instead of hardware has plenty more promise, even if it's largely unrealized at HP today.
The rain-clouds in HP's skies come from Amazon, mostly, whose Amazon Web Services is the leader in a growing segment. Eucalyptus works with AWS, and that seems to be the major reason that Mickos gets to direct-report to HP's CEO Meg Whitman. Eucalyptus manages cloud computing systems. HP still sells hardware and software to host private clouds, but an AWS arrangement is a public cloud concept. HP wants to be sure an AWS user can still be an HP customer.
Clouds have a penchant for carrying a customer away from a vendor. Or at least a vendor's hardware. In the NYT story, "HP will have to rely less on revenue from selling hardware, and more on software and service contracts. 'Success will be a tight alignment of many parts of the company,' said Mr. Mickos. 'We have to figure out how to work together.' "
If you go back 24 years, you can find some roots of this HP desire on a stranded pleasure boat in the San Francisco harbor. But until the business critical HP iron stopped selling, the company never believed it would have to set a rapid course for services.In the fall of 1990, HP hosted a CIMinar conference, mostly for the press and some big customers. The letters stood for Computer Integrated Manufacturing. There was a dinner party on a nice cruise boat as part of the event. When the engines died after dinner, the boat sat in the bay for awhile. We all went out to the deck to lean on the rail and catch some cool air and wait for the tug. That's when Charlie, HP media relations guy, explained that hardware would be on its way out.
"We don't want to sell servers in the long run," Charlie said, while we were talking long enough that he got to the soul of what he believed. He was a former trade press reporter and a good media guy, too. "HP wants to be in the services business, and maybe selling some software."
So here we are, close to a quarter-century later, and now HP's finally found a reason to buy open source software and the fellow who guided it into several hundred companies. Then name him head of HP Cloud making. They hope the whole deal will turn him and his software into a rainmaker for HP enterprise revenues.
While the Times article has got its problems, it got one stretch of the story pretty accurate. HP, like it has said for several decades, is just following its customers. Apparently, away from relying on HP's hardware.
Putting services and hardware together in new ways is part of "the hard hill we are in the process of climbing," said Martin Fink, HP’s chief technology officer and the head of HP Labs, where much of the development is taking place. "Is there uncertainty? There is always uncertainty." He added that Ms. Whitman has determined that this is where customers are going, so HP needs to adjust its business accordingly.
For years, the HP 3000 community wanted Hewlett-Packard to make recommendations to customers about which HP solution to employ. No dice. "We just want to be trusted advisors," HP said over and over. "The customer will tell us what they need, and then we will provide it."
And if the customer needs more legroom to use Integrity and HP-UX? Well, there's always that uncertainty that Mr. Fink mentioned.
August 25, 2014
Shopping While Lines are Dropping
HP's third quarter financial report showed that a company making adequate profits can also be making products that are not popular any more. The time comes to every product line, but the Hewlett-Packard of 2014 has made steady progress toward commodity-style enterprise computing. The pull into Windows has become a vortex -- and in a bit of irony, Windows' age helped HP's sales this quarter.
The overall numbers were impressive to the markets. Investors lifted the price of HP's stock more than $2 a share, after the briefing, sending it closer to $40 than it's been in years. Meanwhile, the continued downturn of Business Critical Systems scarcely earned a minute's mention. It's off 18 percent from the same 2013 quarter. But it gets less than a minute because BCS products like the HP Unix line, and VMS computing systems -- even the steady but meager business of NonStop -- only comprise 3 percent of the company's enterprise sales. In the circle above, BCS is the rounding error, the most slender slice. Click it to see a bigger picture of that smallest piece.
And Enterprise represents just one dollar out of every four that HP earns in sales. This is activity in the Industry Standard Systems. These are the ProLiant servers driving Windows and Linux, business that grew 9 percent. Specialized operating environments like HP-UX just aren't producing new business, and they're losing old customers. If you look over the last three years of Q3 numbers, each and every one shows a double-digit BCS decline. There's only so much clock time on that product wall before irrelevancy pushes a community off HP's futures map. It happened to the HP 3000, but MPE never ruled over HP business computing like Unix once did.
"When I look at the way the business is performing, the pipeline of innovation and the daily feedback that I receive from our customers and partners, my confidence in the turnaround grows stronger." -- Meg Whitman, CEO
So when HP's business in your installed platform shows poor numbers, what do you do? The rest of the company's report looked tame, although you'd wonder why anyone could be sanguine about the future of the company. Printing, Services, Software and Financial Services all dropped their sales top lines. The Enterprise Group grew its business 2 percent overall on a $27.5 billion HP sales quarter. This was accomplished by $57 million of expense cuts.
Only PC sales grew along with enterprise business. How can a company reporting a 27 percent drop in profits, one that missed its forecast by more than 10 percent, be rewarded on the trading floor? Jim Cramer of MSNBC said there's just enough to like about HP now. That might be due to the history the company has turned back. Everybody on the trading floor remembers HPQ at $12 a share with a fired CEO having followed an ousted CEO. Historic lows are a faded memory now, although the company's gotten no bigger over that stretch of clock time. The good feelings come from a turnaround tale that's still in the middle of its story.But it is history that is the biggest concern for owners of the plunging VMS and HP-UX servers. Hewlett-Packard may never kill off an enterprise product line again like it did with the HP 3000. But becoming irrelevant is a fatal blow, too. Customers choosing to manage their own datacenters are taking shelter in Linux and Windows, according to HP's report. The analysts are pleased with the company's net operating cash position, which at $4.9 billion is 80 percent higher than last quarter. But that's $2.2 billion extra not being spent on R&D for the company's specialized technology running in HP 3000 migrated sites.
This kind of sour outlook is like a chart-topping record back on '60s radio. As a customer you hear it all the time. But it's not a concern to the corporation making the Unix servers, or to the investors who propel that company into the future. You have to wonder why anyone else would care. It's an even more distant piece of history to recall the day MPE slipped into HP's under-a-minute bin. Enterprise outlook is not part of what Cramer likes about HP this month.
There's shopping until you drop, and shopping until the product line is dropped. The latter's probably years away for the enterprise products that are not commodities. The HP 3000 migrated base has experience in how to manage their investments in a line HP won't watch any longer. At some point they'll draw the line on whether their servers need to be powering Unix or VMS applications. It's the apps that steer operations investments. By this point, it would be news if BCS numbers did not drop.
It's a good thing that Windows XP dropped out of Microsoft's support plans. The demise of a popular OS left companies with a problem that required replacing aged PCs. The CEO is getting good at keeping HP's aged strategy from pulling down growth, but it's been flat for a long while. If there's a future to owning and staying loyal to Hewlett-Packard enterprise systems, few analysts can see it. You must look at customer applications -- and the dug-in nature of legacy computing -- to see the staying power.
August 12, 2014
Where a Roadmap Can Lead You
In preparation for its upcoming VMS Boot Camp, Hewlett-Packard has removed some elements of its roadmap for the operating environment. What's disappeared are no small thing: dates.
As the system neared its change of life at HP, customers of the HP 3000 saw their roadmap get less certain about its estimated time of arrivals. At the end of the vendor's interest in selling and creating more systems, an elaborate PowerPoint slide showed multiple levels of servers. The roadmap actually got a cloud creeping in from the right hand margin.
Okay, that was 13 years ago this very month in Chicago. But it was not the last HP World conference -- that would be one decade ago, this month -- not any more than next month's Boot Camp for VMS enthusiasts and customers will be the last. But there have been times when VMS had promises from HP's management of another decade of service. Here's the before, and the after.
Very few products last for lifetimes. Knowing when they're going, and how soon to make plans for replacement, is serious business for an IT manager.
During an August in 2001 when the future looked certain and solid for some customers, a PowerPoint slide told more than could be easily read in Chicago for HP 3000 customers. For the record, the slide below delivered everything promised up until 2003. The PA-8800 never made an entry into the N-Class.
That would be known, in the roadmap parlance, as a PA-8xxx. The PA-8yyy (8900) never made it into a 3000, either.
Roadmaps might be an old tradition, but they're moments to establish and renew trust in a partner. Specific, and follow-through, make that possible. Some VMS customers are already underway with their migration assessments.
August 05, 2014
Boot Camper laying down migration steps
More than a decade after HP began its migration away from MPE and HP 3000, there's another underway among the vendor's enterprise systems. OpenVMS customers are starting to look into what's needed to make a transition off the Digital servers. HP's announced that it will curtail the use of the newest VMS to the very latest generation of hardware. Thousands of servers are going to be stuck on an older OpenVMS.
That will be one element to spark the offers at next month's VMS Boot Camp in Bedford, Mass. We heard from a veteran HP 3000 and MPE developer, Denys Beauchemin, that his company is headed to the Boot Camp for the first time this year. There's engagements and consulting to be made in moving HP enterprise users to less HP-specific environments.
"We migrate them from VMS to Linux or other platforms," said Beauchemin, who was the last working chairman at the Interex user group before the organization went dark in 2005. "Another HP operating system comes to an end."
Boot Camp is a VMS tradition among HP's most-loyal general purpose computing community. (You can't call the 3000 community HP's any longer, now that the vendor is coming up on seven years without a working lab.) Boot Camps in the past were annual meetings to advance the science and solutions around VMS. But in more recent times they haven't been annual. Now there's migration advice on hand for the attendees. Some may view it with disdain, but when a vendor sends up signals of the end of its interest, some kinds of companies make plans right away to migrate.There is a strong presence in the VMS community for the Stromasys virtualized server solutions. Stromasys made its bones helping VAX and Alpha customers get away from DEC-branded servers; the company was established by the leader of the Digital migration center in Europe.
VMS might be just as essential in some companies as MPE has turned out to be. This is what's made Stromasys CHARON HPA a quiet success in your own community. As VMS customers face the end of HP's support for older hardware -- the latest OpenVMS won't run -- some of them may be looking to a virtualized version of the newer VMS systems. This strategy isn't without its efforts, too. Comparing migration to virtualization as a way into the future is likely to become a diligent task for another HP operating system customer base.
August 01, 2014
HP doubles down on x86 Intel, not HP-UX
IBM's giving up on another market that HP continues to prize, but the latest one is more relevant to the small-sized enterprise where HP 3000 migrators hail from. (Years back, IBM sold its consumer PC business to Lenovo.) Now the modest-horsepower x86 server field's going to Lenovo, since IBM's decided to exit another Intel-based hardware market.
A longtime HP 3000 software vendor took note of this transition. He wondered aloud if the message HP now sends to its x86 prospects has a shadowy echo of another advisory, one delivered a decade ago. From our correspondent Martin Gorfinkel:
Hewlett-Packard has been running full page ads in the New York Times with the lead, “Building a cloud? Your future is uncertain.” (The “un” in “uncertain” is crossed out.) The ad goes on to say that the "IBM decision to exit the x86 server market impacts your cloud strategy." Thus, they say, move to HP and be assured that HP will not leave you stranded.
Would I be the only former user/vendor in the HP 3000 market to find that advertising hypocritical -- and further evidence that the company we once relied on no longer exists?
The hypocrisy is probably on display for any 3000 customer who was told Hewlett-Packard was making an exit from the 3000 hardware market (and by extension, the MPE software world). Every vendor exits some part of their business, once the vendor gets large enough to sell a wide array of products. IBM is dropping away from x86. HP invites enterprises to "join us to plan your forward strategy." This forwarding strategy of moving to Windows and Linux differs from HP advice of 10 years ago. Going to HP-UX was the strategy du jour, beyond a 3000 exit in 2004.
The full-page ads in four colors in a national daily announce a redoubling of effort to win Intel x86 business. That's going to suck up some energy and mindshare, effort that 3000 customers who followed HP forward on HP-UX are probably going to miss.It won't come as much news to the migrated customer who's been listening to HP management comment about the future of its Business Critical Systems Unix products. "A formerly growing business" is the best that HP's chairman and CEO Meg Whitman can manage in quarterly briefings.
IBM's moving in different directions than HP these days. A recent announcement pulls Big Blue into step with Apple to win enterprise business for both companies at once. Microsoft was once the savior of Apple in hard times. Now it looks like Apple, which has a valuation well above IBM's, is going to perform some salvation. HP had a shot at working with Apple in consumer business, but it was back in the days when selling re-badged iPods seemed like a good idea.
HP's attraction of IBM customers has been a give-and-take that goes back decades. In 1995, IBM wanted HP 3000 customers to switch to AS/400s. Database issues stood in the way of that effort, but certainly a very few companies made the transfer once HP announced an exit of the 3000.
In the same way, HP executives are claiming wins for business in the hundreds, according to an article in eWeek
According to Antonio Neri, senior vice president and general manager of HP's servers and networking businesses, the efforts over the past six months are paying off. The company has seen its win rate against IBM increase more than 40 percent, accounting for several hundred new deals won against Big Blue.
Customers in those deals might be the only parties who still have to figure out how they feel about this change. IBM is happy to let loose of server business that was killing its profits, according to a NY Times article. The changes say a lot about how important these big vendors consider enterprise server business. On one hand, IBM says there's no enterprise-caliber profit in selling x86. On the other, HP is happy to take on whatever customers IBM was passing over to Lenovo.
[Vendors'] businesses like PCs are losing ground to mobile devices like smartphones, and the once-formidable computer server is increasingly viewed as one more commodity piece of globe-spanning cloud computing projects from a few elite players.
“We need to get an inventor’s profit, not a distributor’s profit,” said Steve Mills, senior vice president of software and systems at IBM. “Our investment in research and development is what makes IBM go. It’s hard to do that in markets that don’t give you credit for the innovations you bring.”
It’s stark how quickly that margin fell away. A year ago, IBM was talking about a sale of its server business to Lenovo for what was reported at the time to be $6 billion. Today’s deal for $2.3 billion kept for IBM some higher-value servers, like those that perform complex data analytics. But according to Mr. Mills, it also included agreements for IBM to buy from Lenovo some of the commodity, or x86, servers for IBM’s growing cloud business.
And so there's the interesting wrinkle for anybody considering their migration off HP 3000s. IBM isn't giving up on cloud computing, not any more than HP has; both vendors want to host your applications on cloud servers they'll set up and maintain for you. (So does Amazon, of course, and probably at a better price.) Clouds might be the only way to get a 3000 migration that carries a budget similar to sticking with HP 3000s. Everyone wants to know more about security on clouds, but they want to know about security everywhere these days.
One combination you won't see is clouds and HP-UX computing. HP's own Cloud cannot host HP-UX apps, just those running Windows or Linux. It's an Intel party up there in the HP Cloud. (In a big piece of irony, Apple's OS X Unix is one of the supported HP Cloud installs.) Going forward from the 3000 with HP has more options than going forward than with IBM, right? It's true if you don't count Unix. Hewlett-Packard shows its strategy, with full-page splashes, that Unix counts for much less at enterprises.
We invite any correspondents who see the full-page ads about HP-UX enterprise to alert us. Twenty years ago, the HP 3000 customers were measuring the HP love by way of ads and alliances. To reply to the other part of Gorfinkel's question, we believe that old HP still exists. The company that 3000 customers relied upon in the '90s is repeating its behavior. It's just leaving a different OS out of its forward strategy this time.
Gorfinkel added that he managed to put his opinions into the inbox of the HP CEO. "I got a promotional email from HP that included – if you follow enough links – an opportunity to email Meg Whitman herself," he said. "Could not resist sending the following:
I cannot believe that HP is running full page ads pointing out that IBM decided to exit the x86 server market and that HP can be trusted to keep your future certain. Is there no corporate memory of the HP exit from the HP3000 market? None of us who felt our future was certain with the most reliable, most secure hardware/software combination in the industry have forgotten. HP left us stranded with a few independent vendors working to pick up the slack. Those who know of HP's history will just laugh (or cry) over the ad; others may be fooled.
It is certainly ironic!
July 31, 2014
TBT: Java's promise spun 3000s into style
Just about 15 years ago from this ThrowBack Thursday, the HP 3000 was having its high moment of renaissance at Hewlett-Packard. The computer was going to make its stretch into the world of a Java-based interface for applications, in an era when Java was considered stylish. A new Java library was going to be patched into the operating environment, and the 3000 division was about to enjoy its fourth straight summertime with the same general manager, something we'd not seen in many years.
Harry Sterling pushed at the heartstrings of the customers during his tenure leading the division, and in 1999 he threw out the stops to make the HP World conference update on the 3000 memorable. The 3000 was always in style, Sterling maintained, just like the classics of yo-yos (a popular late '90s show giveaway) and tuxedos. Sterling managed to pull off a combination of the two at what amounted to a State of the Product address.
His hour-long talk was built around the theme of "The HP 3000: Always in Style," and featured a video of customer interviews comparing the system to classic dances such as the tango and the waltz. The general manager finished his talk spinning a yo-yo from his hand.
“Just like this yo-yo and just like my tux are always in style, so is the 3000,” Sterling said. The white-hot dot com boom was on, and Sterling felt the yearning from customers to feel the heat.
"You are seeing a new mindset at HP, doing the things that will make it possible for us all to be a pivotal player in Chapter Two of the Internet. Many of you are saying it’s about time — and I agree.”It was the last such speech he'd give. He retired from HP and his position later that year, handing over leadership of the group to Winston Prather. Y2K came and went, and the tuxedo-flashing era came and went, too. At the time of Sterling's talk, HP shared details of a GUI plan it called Visage, figuring that legacy-looking apps were not helping the 3000 hold and win customers. Mike Yawn, the CSY engineer who lead the Java project for the 3000, outlined elements of using Java to build GUIs for existing 3000 applications, as well as creating interfaces from scratch for new apps.
Technology refreshes like integrated Java were not moving as fast as HP's top management changes; commodity computing was cemented in the CEO's office by the march of Windows into business readiness. Visage never made it out of HP's labs, while faster 3000s using a new IO bus remained on the runway of the labs too long, in hindsight. But for a week in San Francisco, while Hewlett-Packard celebrated its 60th company anniversary, the view of the 3000's future was stylish to the max.
July 23, 2014
Migrators make more of mobile support app
A serious share of HP 3000 sites that have migrated to HP's alternative server solutions have cited vendor support as a key reason to leave MPE. Hewlett-Packard has been catering to their vendor-support needs with an iPhone/Android app, one which has gotten a refresh recently.
For customers who have Connected Products via HP's Remote Support technologies, the HP Support Center Mobile (HPSCm) app with Insight Online will automatically display devices which are remotely monitored. The app allows a manager to track service events and related support cases, view device configurations and proactively monitor HP contracts, warranties and service credits.
Using the app requires that the products be linked through the vendor's HP Passport ID. But this is the kind of attempt at improving support communication which 3000 managers wished for back in the 1990s. This is a type of mobile tracking that can be hard to find from independent support companies. To be fair, that's probably because a standard phone call, email or text will yield an immediate indie response rather than a "tell me who you are, again" pre-screener.
But HPSCm does give a manager another way to link to HP support documents (PDF files), something that would be useful if a manager is employing a tablet. That content is similar to what can be seen for free, or subject to contract by public audiences, via the HP Business Portal. (Some of that content is locked behind a HP Passport contract ID.) This kind of support -- for example, you can break into a chat with HP personnel right from the phone or tablet -- represents the service that some large companies seem to demand to operate their enterprise datacenters.
There's also a Self-Solve feature in the HP mobile app, to guide users to documents most likely to help in resolving a support issue. Like the self-check line in the grocery, it's supposed to save time -- unless you've got a rare veggie of a problem to look up.Remote system administration isn't unheard of in the 3000 world. Allegro Consultants' iAdmin got an update to iOS 7 this month. It supports MPE servers, as well as HP-UX, Solaris, Linux and OS X. iAdmin requires a back-end subscription for each server monitored, just like the HPSCm app. But iAdmin draws its information from a secure server in the cloud; the monitored systems feed their status to that secure server.
HPSCm offers one distinction from independent service arrangements: managers and companies can report they're getting mobile updates via HP itself -- instead of a more focused support company, like Pivital Solutions, which specializes in 3000 issues. Migrated sites have stopped caring about 3000 support, but those who are still mulling over the ideal of using more modern servers might try out the HP app. They can do so if they've already registered monitoring access for servers and such via HP Passport.
July 22, 2014
A Week When HP Gave OpenMPE the Floor
3000 community members at HP's facility for the OpenMPE meeting that replaced the scrubbed HP World 2005. From left, Walt McCullough, HP's Craig Fairchild and Mike Paivinen, Birket Foster (standing) and Stan Sieler.
It was a Maple floor, to be exact, in the Maple Room of the HP campus that's now long-demolished. On this day in 2005, in the wake of a washout of the user group Interex and its conference, the OpenMPE board met with HP to earn a space for an all-day meeting. HP extended use of its Maple Room -- where many a product briefing for the 3000 line had been held -- to the advocacy group that had fought for more time and better programs for migration and homesteading users.
In what feels like a long time ago, given all else that has changed, Interex closed its doors during this week in 2005 owing $4 million to companies small and large. The unpaid debts ranged from individuals owed as little as $8.30 on the unserved part of a yearly membership, to HP World booth sponsors who paid $17,000 for a space that the group could not mount in San Francisco. Then there were the hotels, which lost hundreds of thousands of dollars in unpaid room reservation guarantees. At five creditors to a page, the list of people and companies which the user group owed ran to more than 2,000 sheets. The file at the Santa Clara courthouse felt thick in my hands.
There was little money left at the end, too. The Interex checking account held $5,198.40, and a money market fund had $14,271.64 — neither of which was enough to satisfy the total unpaid compensation for an outside sales rep ($65,604 in unpaid commissions) or executive director Ron Evans (who had to forego his last paycheck of $8,225).
That OpenMPE meeting in August, in place of the Interex show, was notable in way that Interex could never manage. 3000 managers and owners could attend via phone and the web, using meeting software that let them ask questions and see slides while they could hear presentations.Webinars were not uncommon by 2005 for the 3000 community, but this web and phone conference poked further into the realm of interaction by adding the meeting software with the ability to raise your hand for a question, chat between attendees, and more. That same flavor of software, updated for our current decade, is on display at the MB Foster Wednesday Webinars of this year. (The latest is set for August 6.)
HP was gracious enough to provide a lunch for those who attended in person on that August day in 2005. The event was proof of the communication that OpenMPE sparked through its work up to 2008, when the 3000 labs and MPE experts closed off their doors and timesheets.
The meeting of nine years ago included a promise from HP's division managers that it would enable a time-honored tradition of a hobbyist's license for operating systems. It was supposed to give the 3000 community a way to teach itself and experiment with MPE for non-commercial research and education. But HP's method of licensing MPE/iX to the programmers and students of the environment was supposed to use the proposed emulator license, an agreement that required an emulator to surface for HP 3000 hardware.
Alas, the first emulator to surface for the 3000 arrived in 2012, a few years after HP stopped issuing new MPE/iX licenses. There's no hobbyist license per se today from HP. The freeware version of the CHARON emulator makes its users promise they've already got a valid 3000 license, since they've got to enter a HPSUSAN number to get started. A true hobbyist license requires no other OS-hardware license. OpenVMS has a hobbyist license, but that was begun by Digital.
As far as 2005's user group meetings went, the OpenMPE seminar was the only one to follow its proposed schedule. HP said that anybody who'd paid to attend the Interex show could shift their paid registration to the first-ever HP Technology Forum. That event was to be held in New Orleans in the thick of hurricane season. And a whopper emerged, Katrina, which wrecked the city so badly that HP's September show was moved to Orlando.
July 18, 2014
HP gives leadership to Whitman top-down
Hewlett-Packard announced that it's giving the leadership of its board of directors to CEO Meg Whitman, after two chairmen had led the board but not the company in the years following CEO Mark Hurd's ouster.
Whitman joined the HP board in 2011, arriving about five months after Hurd left the company, but she didn't take her CEO role until the fall of that year. She's wrapping up her third year as CEO. Analysts see the addition of chairman to her duties as proof that HP's now her company to lead in totality.
Over the last two decades, only three other people have chaired the HP board as well as held the CEO role: Hurd, Carly Fiorina and Lew Platt. It's usually been an ultimate vote of confidence about a CEO's track record. None of the CEOs began their leadership of the company while heading up the board as well. Platt took his chairman's role from founder David Packard within a year of becoming CEO. Fiorina took the post from Dick Hackborn, 14 months after becoming CEO. Whitman becomes the third woman ever to lead the HP board, following Fiorina and Patricia Dunn. The latter took her job in the wake of Fiorina's ouster.
Leadership of Hewlett-Packard remains an issue for the migrated as well as migrating 3000 customers -- at least those who are investing in HP's alternatives to MPE. Whitman's record since taking her CEO duties has been admirable and at times heroic. She presided over a company in the early winter of 2012 with a stock valued at under $12 a share. In the course of her CEO term, Whitman's weathered the detritus of weak acquisitions such as Autonomy as well as the steep slowing of its services business growth. Whitman voted for Autonomy's acquisition as a board member, early in her directorship. But since 2013 she has championed growth through R&D rather than purchasing companies such as EDS and Compaq.
The board now contains only one longstanding HP employee, Ann Livermore, who serves as executive advisor to Whitman. More than 15 years ago, Livermore was passed over for the CEO job in favor of Fiorina -- but Livermore represents one of the last board members whose pedigree is in technology rather than business management. Livermore has been an HP employee since 1982.
Ralph Whitworth, who's reported to be in poor health, resigned the chairmanship he held since last year to make way for Whitman, as well as vacating his board seat. Klaus Kleinfeld, chairman and chief executive of Alcoa, arrives at the board to take Whitworth's seat.
July 10, 2014
TBT: The month fem-power first led HP
You only have to go back 15 years to find a Throwback Thursday photo that captured watershed change for the HP 3000's creators. Carly Fiorina was named as HP's sixth CEO on a Monday in July, the start of the finale for a company's business way which created Hewlett-Packard-designed products as its biggest business.
Fiorina was all of 44 years old when she took a chair that had always been held by men over the first 60 years of HP's existence. In a BusinessWeek story that marked her ascent, the woman who'd become known only as Carly explained that she'd talked Dick Hackborn into staying on HP's board of directors. Telling readers that "Carly Fiorina has a silver tongue and an iron will," reporter Peter Burrows relayed Carly's own admission of feminine business power. The CEO-to-be said she was interviewed in a Chicago airport club restaurant.
"You can't tell me there's a better person for the job,'' she told Hackborn as the Gaslight's waitresses, clad in skimpy uniforms and fishnet stockings, made their rounds. Over the course of three hours, Hackborn agreed [to helm the board]. ''And no, I did not put on fishnet stockings,'' Fiorina says with a laugh. ''Don't even go there.''
At the time of her ascent, the business media had pegged Carly as the most powerful woman in business, with Oprah running number 2. “She is quite simply the ideal candidate to leverage HP’s core strengths in the rapidly changing information-systems industry and to lead this great company well into the new millennium,” said board member Sam Ginn, who led the search committee. It was a move that would lead the staid company into new eras of panache.
HP’s board said it was pushing for the company’s first outside CEO to lead the company in its new e-services push. Heading up AT&T spinoff Lucent’s $20 billion Global Service Provider division, Fiorina was named America’s Most Powerful Businesswoman in 1998 by Fortune magazine. Her selfies with pop stars came later.Six years later, HP was shucking off a CEO who'd brought exactly what the board thought HP needed -- commodity products to sell alongside high-profit enterprise computing systems. The Compaq merger she pushed, adding PCs to the top of HP's sales results, meant the end of some HP product lines that overlapped with Digital servers that Compaq was selling, such as the OpenVMS-MPE collision.
Within one year of Fiorina's ouster, Burrows had written Backfire, his history of the Carly era at HP. Interviewed on PBS, Burrows gave his take on why the sizzle of a CEO -- who hired pop star Gwen Stefani to headline a tradeshow beside her -- didn't satisfy.
I think she is a very polarizing figure. Initially people almost always, you know, sort of think the world of her and are sort swept away with her charisma and her good ideas and her passion. But I think that over time, a lot of people at HP particularly I know, lost faith when it became clear that her ideas just weren’t working.
Fundamentally, HP was a great printer company and a very average to poor computer company. She went out and did a merger that doubled the size of the poor business, and now they’re stuck in a lousy — a very challenging PC industry.
She got that deal done against all odds, and sort of against the market’s wisdom. Investors hated the deal. They took 17 percent out of the stock immediately when it was announced.
June 12, 2014
Virtualization still demands real iron
In the span of time between the publication of a hopeful magazine article and the close of this year's HP Discover conference, the vendor made a point about its hardware heritage. The point might have been unintentional, but it appears that the future is still a destination you'll achieve riding the vehicle of The Machine.
A lot of computing is going out of sight these days. The costs to careers are real, as companies decide that managing IT staff and in-house resources is a discretionery budget item. When they job out your computing systems to a cloud provider, all that remains is to keep up with the needs of your applications and business processes. That's a lot fewer jobs across our industry. The demands for information keep accelerating, through brontobytes of data and onward.
But HP believes that there's still going to be a need for a machine to run it all, one that they're trying to build from the concepts of tomorrow. A blog post on the HP website HP Next explained why the biggest HP Labs project in 20 years is being called The Machine.
Why do we call it The Machine? When we first started developing it, we wanted to be very careful not to call it a server, workstation, PC, device or phone, because it actually encompasses all of those things. So as we were waiting for Marketing to come up with a cool code name for the project, we started calling it The Machine—and the name stuck.
HP talks about a centralized learning engine. So that's another physical reference, one that will be powered by The Machine. "With The Machine, we have the opportunity to rethink security, data governance, data placement and data sovereignty from ground up and embed them into all of our products. This revolutionary project is on its way to changing the industry—and the way we compute."
The promise, really just a dream, is that a "a doctor could compare your symptoms and genomics with every other patient around the world to improve your health outcomes, instantly, without language barriers or privacy breaches."
That magic will still require real iron somewhere, managed by an IT pro. Iron, a box, or a virtual array of compute engines, they'll all an un-changing part of the way our industry computes. That's why the revolution of a virtual HP 3000 server still needs a ProLiant computer to emulate the old PA-RISC MPE system. That's why even at HP, tomorrow's data dream is called The Machine.
June 11, 2014
HP to spin its R&D future with The Machine
Calling it a mission HP must accomplish because it has no other choice, HP Labs director Martin Fink is announcing a new computer architecture Hewlett-Packard will release within two years or bust. Fink, who was chief of the company's Business Critical Systems unit before being handed the Labs job in 2012, is devoting 75 percent of HP's Labs resources to creating a computer architecture, the first since the company built the Itanium chip family design with Intel during the 1990s.
A BusinessWeek article by Ashlee Vance says the product will utilitize HP breakthroughs in memory (memsistors) and a process to pass data using light, rather than the nanoscopic copper traces employed in today's chips. Fink came to CEO Meg Whitman with the ideal, then convinced her to increase his budget.
Fink and his colleagues decided to pitch Whitman on the idea of assembling all this technology to form the Machine. During a two-hour presentation held a year and a half ago, they laid out how the computer might work, its benefits, and the expectation that about 75 percent of HP Labs personnel would be dedicated to this one project. “At the end, Meg turned to [Chief Financial Officer] Cathie Lesjak and said, ‘Find them more money,’” says John Sontag, the vice president of systems research at HP, who attended the meeting and is in charge of bringing the Machine to life. "People in Labs see this as a once-in-a-lifetime opportunity."
Fast, cheap, persistent memory is at the heart of what HP hopes to change about computing. In the effort to build The Machine, however, the vendor harks back to days when computer makers created their own technology in R&D organizations as a competitive advantage. Commodity engineering can't cross the Big Data gap created by the Internet of Things, HP said at Discover today. The first RISC designs for HP computers, launched in a project called Spectrum, were the last such creation that touched HP's MPE servers.
Itanium never made it to MPE capability. Or perhaps put another way, the environment that drives the 3000-using business never got the renovation which it deserved to use the Intel-HP created architecture. Since The Machine is coming from HP's Labs, it's likely to have little to do with MPE, an OS the vendor walked away from in 2010. The Machine might have an impact on migration targets, but HP wants to change the way computing is considered, away from OS-based strategies. But even that dream is tempered by the reality that The Machine is going to need operating systems -- ones that HP is building.
OS compatibility was one reason that Itanium project didn't pan out the way HP and Intel hoped, of course. By the end of the last decade, Itanium had carved out a place as a specialized product for HP's own environments, as well as an architecture subsidized by Fink's plans to pay Intel to keep developing it. The Machine seems to be reaching for the same kind of "change the world's computing" impact that HP and Intel dreamed about with what it once called the Tahoe project. In a 74-year timeline of HP innovation alongside the BusinessWeek article, those dreams have been revised toward reality.PA-RISC is denoted in a spiraling timeline of HP inventions that is chock-a-block with calculator and printing progress. The HP 2116 predecessor to the HP 3000 gets a visual in 1969, and Itanium chips are chronicled as a 2001 development.
The Machine, should it ever come to the HP product line, would arrive in three to six years, according to the BusinessWeek interview, and Fink isn't being specific about delivery. But with the same chutzpah he displayed in running Business Critical Systems into critical headwinds of sales and customer retention, he believes HP is the best place for tech talent to try to remake computing architecture.
According to the article, three operating systems are in design to use the architecture, one open-source and HP proprietary, another a variant of Linux, and a third based on Android for mobile dreams. That's the same number of OS versions HP supported for its first line of computers -- RTE for real time, MPE for business, and HP-UX for engineering, and later business. OS design, once an HP staple, need to reach much higher to meet the potential for new memory -- in the same way that MPE XL made use of innovative memory in PA-RISC.
Fink says these projects have burnished HP’s reputation among engineers and helped its recruiting. “If you want to really rethink computing architecture, we’re the only game in town now,” he said. Greg Papadopoulos, a partner at the venture capital firm New Enterprise Associates, warns that the OS development alone will be a massive effort. “Operating systems have not been taught what to do with all of this memory, and HP will have to get very creative,” he says. “Things like the chips from Intel just never anticipated this.”
June 10, 2014
Security patches afloat for UX, for a price
If an IT manager had the same budget for patches they employed while administering an HP 3000, today they'd have no patches at all for HP's Unix replacement system. That became even more plain when the latest Distributed Denial of Service (DDoS) alert showed up in my email. You never needed a budget to apply any patches while HP 3000s were for sale from the vendor. Now HP's current policy will be having an impact on the value of used systems -- if they're Unix-based, or Windows ProLiant replacements for a 3000. Any system's going to require a support contract for patches.
For more than 15 years, HP's been able to notify customers when any security breach puts its enterprise products at risk. For more than five years, one DDoS exploit after another has triggered these emails. But over the past year, Hewlett-Packard has insisted that a security hole is a good reason to pay for a support contract with the vendor.
The HP 3000 manager has better luck in this regard than HP's Unix system owners. Patches for the MPE/iX environment, even in their state of advancing age, are distributed without charge. A manager needs to call HP and be deliberate to get a patch. The magic incantation when dealing with the Response Center folks is to use transfer code 798. That’ll get you to an MPE person. And there's not an easy way for an independent support company to help in the distribution, either. HP insisted on that during a legal action last spring.
In that matter, a support company -- one that is deep enough to be hiring experts away from HP's support team -- was sued for illegal distribution of HP server patches. HP charged copyright infringement because the service company had downloaded patches -- and HP claimed those patches were redistributed to the company's clients.
The patch policy is something to budget for while planning a migration. Some HP 3000 managers haven't had an HP support contract since the turn of this century. Moving to HP-UX will demand one, even if a more-competent indie firm is available to service HP-UX or even Windows on a ProLiant system. See, even the firmware patches aren't free anymore. Windows security patches continue to be free -- that is, they don't require a separate contract. Not even for Windows XP, although that environment has been obsoleted by Microsoft.HP said the lawsuit was resolved when the support company agreed to suspend their practices that were alleged in the suit.
HP, like Oracle (owners of Sun) and other OS manufacturers, have chosen to restrict updates, patches, and now firmware to only those customers that have a current support agreement. Indie support companies can recommend patches; in fact, they're a great resource for figuring out which patch will fix problems without breaking much else. But customers are required to have their own support agreement in order to download and install such patches and updates.
Even following the links in the latest HP emails landed me in a "you don't have a support agreement to read this" message, rather than the update about DDoS exposure. It's more than the patches for migration platforms that HP's walled away from the customer base. Now even the basic details of what's at risk are behind support paywalls.
The extra cost is likely to be felt most in the low to midrange end of the user community. Dell's not getting caught up in what HP calls an industry trend to charge for repairing malformed software or OS installations that get put at risk. Dell offers unrestricted access to BIOS and software updates for its entire server, storage, and networking line.
June 05, 2014
A World Where Amazon Trumps Big Blue
It almost sounds like grandpa-talk to say "things have changed so much." Life is built from changes, and since our industry runs at a pace faster than almost every other, our rate of change is exemplary. There are long-held rules that are giving way, too.
Most of the HP 3000 managers remember the saying that "nobody ever got fired for buying IBM." It was an unfair advantage. Big Blue was the default IT choice for most of the 3000's lifespan as an HP product. But during the decade-plus since MPE started to vanish from Hewlett-Packard's mindscape, IT hosting and computing resource defaults have been reset. The changes are serious enough that Amazon trumped IBM on a $600 million project to build a compute center for the CIA.
Unlike the NSA (No Such Agency), the CIA exists and processes countless pieces of information. A story in BusinessWeek reported that the CIA wanted to build its own private cloud computing system. This is the type of IT project that would've been handled on the ground, not in the cloud, while HP was selling 3000s. A type of project IBM would've been a finalist in. Indeed, IBM finished in the top two. But IT pros now live in a world where buying compute power with a credit card is a valid strategy. The stakes were high for the winner.
For the bidders, more was at stake than a piece of the lucrative federal IT market. Whoever won the 10-year, $600 million contract could boast that its technology met the highest standards, with the tightest security, at the most competitive prices, at a time when customers of all kinds were beginning to spend more on data and analytics.
The CIA awarded the contract to Amazon.com. The e-commerce company had persuaded the spymasters that its public cloud could be replicated within the CIA’s walls. Amazon had been bleeding IBM for years—its rent-a-server-with-your-credit-card model was a direct threat to IBM’s IT outsourcing business—but this was different. Amazon beat IBM for a plum contract on something like its home turf, and it hadn’t done so simply by undercutting IBM on price. IBM learned that its bid was more than a third cheaper than Amazon’s and officially protested the CIA decision.
The 3000 community lives in a world where cloud computing is being selected for large-scale projects -- and it's being chosen from companies like Amazon who don't have the ballast to carry you'll see from HP, IBM, Dell or others. The servers, and the expertise to make them sparkle, work elsewhere. HP's got a cloud offering, as does IBM. But Amazon Web Services is way ahead of these classic server providers. IBM's gotten so far off the server sales strategy that it sold its low-end servers group to Lenovo.
To put it another way, IBM's selling as many small servers this year as HP is selling 3000s.
In the BusinessWeek story, the demise of IBM being fireproof got exploded. At least while going up against Amazon.
A federal judge agreed, ruling in October that with the “overall inferiority of its proposal,” IBM “lacked any chance of winning” the contract. The corporate cliché of the 1970s and ’80s, that no one ever got fired for buying IBM, had never seemed less true. IBM withdrew its challenge.
May 29, 2014
They knew what they had before it was gone
In the classic Joni Mitchell song, she asks, "Don't it always seem to go, you don't know what you got 'till it's gone?" However, in the HP 3000 world, the advocates, fans and users know the special place the 3000 held in their lives -- and long before it was really gone.
At the now-defunct Boyle Engineering, the last in a long line of HP 3000s was sold for scrap this month, according to Harlan Lassiter. When Boyle was purchased in 2008, the site that housed the 3000 was closed down. Equipment was left behind, but Lassiter -- who worked at Boyle 27 years -- kept track of an abandoned 3000 Series 928. He reported he was sad to see it go. One last boot-up was all that Lassiter wanted at Boyle, whose services were engaged to plan, design, and construct infrastructure projects.
Last time I was in the building, in the corner of the raised floor computer room, was our HP 3000 928 system, console monitor and LPQ1200 printer. Yesterday it was gone. Apparently it was picked up late last week as scrap. Also picked up and sold for scrap from the room were about 50 Dell LCD monitors (some new, still in bubble wrap) and perhaps 30 Dell desktop computers, APC battery backup systems, server arrays, and other assorted computer equipment. Much of the equipment could have been donated to organizations that could use a computer system, even though it would not be the most current.
That 928 was the last in a series of HP 3000 systems for the company, having begun with a Series II when I first started with Boyle in 1979 . We came a long way. I started as a programmer and left as the system manager. The system ran all of the company in-house accounting, finance, payroll and project tracking reports and engineering software. All software was developed in-house and was written in FORTRAN. As FORTRAN evolved through the years, so did the software. Files were converted from serial (flat) files to KSAM and eventually to IMAGE databases. What used to take overnight to process took less than an hour in later days.
It was a great learning experience. I guess I was hoping to fire the system up one more time just for nostalgia's sake, since I am the only one left that would be able to do such a thing.
Another piece of HP history, a living one that served both the 3000 and HP-UX systems, has been bulldozed, right off the ground of the old Hewlett-Packard Cupertino campus.Apple now owns the acres of Cupertino where the HP 3000 grew into a business powerhouse. The HP buildings have been razed, and Jim Hawkins of HP reports that even the grove of redwood trees is no more. Apple's building a spaceship-like headquarters in its place. Employees and retirees held picnics there, along with the historic Glendenning Barn which HP maintained as a reminder of the property’s pioneer-era life as an apricot orchard and farm. Hawkins, one of the last 3000-focused engineers at Hewlett-Packard, celebrated those redwoods as a place of the 3000 community.
The HP Cupertino Site, home for (most of) the HP 3000 R&D teams, and manufacturing source of (most) pre-RISC MPE servers, is now scraped clean in preparation to land Apple's "Steve Jobs memorial spaceship."
The redwood grove where execs used to serve us hamburgers during beer busts is all cut down, as are apparently all other trees except those on the borders of Pruneridge, Wolfe, Homestead, and Tantau streets.
After reading Lassiter's farewell, Ed Effinger shared a memorial in waiting. His was report of a forthcoming shutdown at Conestoga College in Kitchener, Ontario. "We have a similar story to what mine will be next March," Effinger said, "as we plan to pull the plug on our Series 929. We also started with HP in 1975-76, to replace our old Honeywell system -- and I too have done all things here."
These are customers of more than 35 years of MPE computing, and that redwood grove was servicing the community at HP's campus even before that time. At least these veterans of the ecosystem know what they're losing, and how much that loss stings. At the old HP campus, it looks like Apple's paving paradise to put up a an underground parking lot.
May 27, 2014
Does cleaning out HP desks lift its futures?
Migration sites in the 3000 community have a stake in the fortunes of Hewlett-Packard. We're not just talking about the companies that already have made their transition away from MPE and the 3000. The customers who know they're not going to end this decade with a 3000 are watching the vendor's transformation this year, and over the next, too.
It's a period when a company that got bloated to more that 340,000 companies will see its workforce cut to below 300,000 when all of the desks are cleaned out. The HP CEO noted that the vendor has been through massive change in the period while HP was cleaning out its HP 3000 desks. During the last decade, Meg Whitman pointed out last week, Compaq, EDS, Automomy, Mercury Interactive, Palm -- all became Hewlett-Packard properties. Whitman isn't divesting these companies, but the company will be shucking off 50 percent more jobs than first planned.
Some rewards arrived in the confidence of the shareholders since the announcement of 16,000 extra layoffs. HP stock is now trading at a 52-week high. It's actually priced at about the same value as the days after Mark Hurd was served walking papers in 2010. Whitman's had to do yeoman work in cost-cutting to keep the balance sheet from bleeding, because there's been no measureable sales growth since all 3000 operations ceased. It's a coincidence, yes, but that's also a marker the 3000 customer can recall easily.
When you're cutting out 50,000 jobs -- the grand total HP will lay off by the end of fiscal 2015 in October of next year -- there's no assured way of retaining key talent. Whitman said during the analyst conference call that everybody in HP has the same experience during these cuts. "Everyone understands the turnaround we're in," she said, "and everyone understands the market realities. I don't think anyone likes this."
These are professionals working for one of the largest computer companies in the world. They know how to keep their heads down in the trenches. But if you're in a position to make a change in your career, a shift away from a company like HP that's producing black ink on its ledger through cuts, you want to engage in work you like -- by moving toward security. In the near term, HP shareholders are betting that security will be attained by the prospect of a $128 billion company becoming nimble, as Whitman vowed last week.In truth, becoming nimble isn't going to be as important to an HP enterprise customer as becoming innovative. Analysts are identifying cloud computing as the next frontier, one that's already got profitable outposts and the kind of big-name users HP's always counted in its corral. During an interview with NPR on the day after the job cuts rolled out, Michael Regan of Bloomberg News pointed out that most of HP's businesses have either slipped, like printers and PCs, or are under fire.
Servers are under a really big threat from cloud computing. HP formerly, you know, their business was to sell you the server so that you can store all your data yourself and have customers access the data right off of your server from the Internet.
The big shift over the last few years has been to put it on a cloud, where basically companies are renting space on a server, and consumers a lot of times aren't even buying any Web applications. They're renting them over the cloud, too. All three of [HP's] main business lines are really under a lot of competition from tablets and cloud computing.
This isn't good news for any customer whose IT career has been built around server management and application development and maintenance. Something will be replacing those in-house servers at any company that will permit change to overturn its technology strategy.
Cloud computing is a likely bet to replace traditional server architectures at companies using the HP gear. But it's a gamble right now to believe that HP's strength in traditional computing will translate to any dominance in cloud alternatives. IBM and Amazon and Google are farther in front on these offerings. That's especially true for the small to midsize company where an HP 3000 is likely to remain working this year.
During the NPR interview, Regan took note of the good work that's come from Whitman's command of the listing HP ship. But the stock price recovery is actually behind both the Standard & Poors average and the average for technology firms during Whitman's tenure. She's floating desks out the door, but that probably won't be enough to float the growth trend line upward. When extra cuts are needed to keep all those shareholders happy, one drooping branch could be the non-industry standard server business.
Any deeper investment in any HP strategy that relies on catching up with non-standard technology should float away from procurement desks for now.
May 22, 2014
HP's migration servers stand ground in Q2
The decline of HP's 3000 replacement products has halted
(click on graphic for details)
CEO Meg Whitman's 10th quarterly report today promised "HP's turnaround remains on track." So long as that turnaround simply must maintain sales levels, she's talking truth to investors. During a one-hour conference call, the vendor reported that its company-wide earnings before taxes had actually climbed by $240 million versus last year's second quarter. The Q2 2014 numbers also show that the quarter-to-quarter bleeding of the Business Critical Systems products has stopped.
But despite that numerical proof, Whitman and HP have already categorized BCS, home of the Linux and HP-UX replacement systems for 3000, as a shrinking business. The $230 million in Q2 sales from BCS represent "an expected decline." And with that, the CEO added that Hewlett-Packard believes its strategy for enterprise servers "has put this business on the right path."
The increased overall earnings for the quarter can be traced to a robust period for HP printers and PCs. Enterprise businesses -- the support and systems groups that engage with current or former 3000 users -- saw profits drop by more than 10 percent. HP BCS sales also fell, by 14 percent versus last year's Q2. But for the first time in years, the numbers hadn't dropped below the previous quarter's report.
The decline of enterprise server profits and sales isn't a new aspect of the HP picture. But the vendor also announced an new round of an extra 10,000-15,000 job eliminations. "We have to make HP a more nimble company," Whitman said. CFO Cathie Lesjack added that competing requires "lean organizations with a focus on strong performance management." The company started cutting jobs in 2012, and what it calls restructuring will eliminate up to 50,000 jobs before it's over in 2015.
Enterprise business remains at the heart of Hewlett-Packard's plans. It's true enough that the vendor noted the Enterprise Systems Group "revenue was lower than expected" even before the announcement of $27.3 billion overall Q2 revenues. The ESG disappointments appeared to be used to explain stalled HP sales growth.
But those stalled results are remarkable when considered against what Whitman inherited more than two years ago. Within a year, HP bottomed out its stock price at under $12 a share. It was fighting with an acquired Autonomy about how much the purchased company was worth, and was shucking off a purchase of Palm that would have put the vendor into the mobile systems derby.
If nothing else, Whitman's tenure as CEO -- now already half as long as Mark Hurd's -- contains none of the hubris and allegations of the Hurd mentality. After 32 months on the job, Whitman has faced what analysts are starting to call the glass cliff -- a desperate job leading a company working its way back from the brink, offered to a woman.As the conference call opened on May 22, HP's stock was trading at close to three times its value during that darkest month of November, 2012. At $31 a share valuation, HPQ is still paying a dividend to shareholders. Meanwhile, the company said it has "a bias toward share repurchases" planned for the quarters to come.
There's still plenty of profit at HP. But the profits for the Enterprise Group, which includes blades and everything that runs an alternative to MPE, have been on a steady decline. A year ago before taxes they were $1.07 billion, last quarter they were $1 billion, and this quarter they're $961 million. Sales are tracking on the same trajectory.
Whitman noted the tough marketplace for selling its business servers in the current market. She also expressed faith in HP's system offerings. It's just that the vendor will have to offer them with fewer employees.
"I really like our product lineup. But we need to run this company more efficiently," she said. "We're going to have to be quicker and faster to compete in this new world order."
When an analyst asked Whitman about morale in the face of job cuts, she said people at HP understand the economic climate.
"No company likes to decrease the workforce," she said. "Our employees live with it every single day. Everyone understands the turnaround we're in, everyone understands the market realities. I don't think anyone likes this." HP believes the extra job cuts will free up an additional $1 billion a year, "and some of that will be reinvested back into the business."
There's also money being spent in R&D. At first during the Q&A session, the CFO Lesjack said that "the increase of R&D year over year is very broad-based" across many product lines. Whitman immediately added that there have been increases for R&D in HP's server lines. The servers which HP is able to sell are "mission-critical x86" systems. That's represents another report that the Integrity-based lineup continues to decline. BCS overall represents just 3 percent of all Enterprise Systems sales in this quarter.
HP's internal enterprise systems -- which were once managed by HP 3000s -- are in the process of a new round of replacements. SAP replaced internal systems at HP last decade. Whitman said the churn that started in 2001 with the Compaq purchase has put the vendor through significant changes, ones that HP must manage better.
"This company has been through a lot," Whitman said during analyst questioning. "The acquisition of Compaq. The acquisition of EDS. Eleven to 20 software acquisitions. It's a lot of change. We're putting in new ERP programs and technology to automate processes that frankly, have not been done in awhile."
May 20, 2014
Who's SUSAN, and what's her CPUNAME?
The MPE operating system, first booted for genuine use some 40 years ago, is a most unique creature of the computer ecosystem. This is software that does not have its own license, specifically. According to HP, the ownership of any MPE/iX version is determined by owning an Hewlett-Packard 3000 server, one built to boot up MPE/iX.
We reached out for clarity about this when a very large aircraft maker tipped us off -- once again, it will examine replacing HP's 3000 iron with CHARON licenses on Intel systems. After the MPE/iX software is turned off on any replaced 3000 hardware, does its hardware-based license then expire? The operating system license, according to HP's MPE Technical Consultant Cathlene Mc Rae, is related to the HPSUSAN of the original HP hardware.
So wait a minute. Are these HPSUSAN numbers of 3000s considered de-licensed, even if they're going to be used on the CHARON emulator? Mc Rae explained.
The HPSUSAN number is different from the MPE/iX license, although there is a relation between the two. The ability to use MPE/iX on the emulator is a result of completing a Software License Transfer. The original MPE/iX license on the HP e3000 would then no longer exist.
In the hardware world of HP 3000s, HPSUSAN takes the original serial and model numbers on the system. It remains the same, as long as the customer owns the system. This combination was used to ID the hardware and enable diagnostics for the correct system.
However, that transferred license for the MPE/iX installation on the CHARON emulator -- available via a $432 Software License Transfer Fee -- won't be getting a new HPSUSAN number during the process. HPSUSAN gets re-used, and so it leads us to see what HPSUSAN stands for, and how the HPCPUNAME is a key in emulator installations.The U in HPSUSAN stands for Unique, as in System Unique Serially Assigned Number. Mc Rae said that HPSUSAN is one of a kind for HP-built 3000 systems. But SUSAN doesn't designate an MPE/iX license, even though MPE is licensed via hardware ownership.
Mc Rae explained to us, and to the CHARON prospective user, "MPE hardware and software was created before the technology of virtual systems and emulators, in the 1970s. Licenses were based on hardware ownership."
This sounds familiar. HP once compared the licensing of MPE/iX to license plates issued for a car. They could not be separated, these numbers and the car that was the HP 3000 iron. (Let's just put aside the common practice of those metal-plate days, when they'd give you a new number after your plate was older than 8 years in Texas.)
In 1999, HP was busy suing Hardware House and a few other resellers over the resellers' separation of HPSUSANs from HP's 3000 hardware cars. The House was taking other PA-RISC servers and pressing valid HPSUSAN numbers onto the non-3000 iron. People went to jail. Lo-jacks were ordered for ankles.
Thanks to the passage of 15 years' time, an HPSUSAN number can now move to a USB thumb drive plugged into a CHARON Intel- or AMD-based server. Those license plates can travel to a newer model of car. The emulator's HPCPUNAME, however, can only be designated as an A-Class or N-Class system, according to HP's knowledge. That'll likely be a reason to contact all software vendors whose products operate on the replaced HP 3000 iron.
You see, vendors use a combo of HPSUSAN and HPCPUNAME to control licensing. Products such as Infor's MANMAN or PowerHouse not only want to read HPSUSAN -- which you can move to CHARON -- but also HPCPUNAME. If you're moving off a Series 979, for example, "979-100" isn't an emulated system under CHARON. No 979-100 for HPCPUNAME. You've got to get license permission from your software vendors to enable an A-Class or N-Class HPCPUNAME.
The HPCPUNAME on the CHARON system may not be set to 979, Mc Rae said. "Based on the CHARON HPA/3000 family, it is assumed that the HPCPUNAME will be set to an A-Class or N-Class CPUNAME," she said. "For example: HPCPUNAME = SERIES e3000/A500-200-50. As far as I know, CHARON can only emulate A- and N-Class systems." That's true: a Series 9xx model isn't on the HPA/3000 product list.
The silver lining in this cloud is that you're only doing this contacting and CPUNAME-changing once. Moving to an A-Class or faster CPU from a 9x9 system is the last time you'll be changing from an unsupported CPUNAME to something included in the CHARON product line.
In short, independent software vendors are going to have to be contacted, if they've licensed their products with the HPCPUNAME-HPSUSAN combo on a Series 9xx. Contacting your software vendors about a system upgrade is a fair business practice. But it's more than the right thing to do. Series 9xx users headed to the emulator look like they need that refresh to boot up their indie software.
May 09, 2014
HP bets "Hey! You'll, get onto your cloud!"
Hewlett-Packard announced that it will spend $1 billion over the next two years to help its customers build private cloud computing. Private clouds will need security, and they'll begin to behave more like the HP 3000 world everybody knows: management of internal resources. The difference will reside in a standard open source stack, OpenStack. It's not aimed at midsize or smaller firms. But aiding OpenStack might help open some minds about why clouds can be simple to build, as well as feature-rich.
This is an idea that still needs to lift off. Among the 3000 managers we talk with — who've been in computing since the 1980s — they are inclined to think of clouds much differently than time-sharing, or apps over the Internet. Clouds are still things in Rolling Stones or Judy Collins choruses.
The 3000 community that's moving still isn't embracing any ideal of running clouds in a serious way. Once vendor who's teeing up cloud computing as the next big hit is Kenandy. That's the company built around the IT experience and expertise of the creators of MANMAN. They've called their software social ERP, in part because it embraces the information exchange that happens on that social network level.
But from the viewpoint of Terry Floyd, founder of the manufacturing services firm The Support Group, Kenandy's still waiting for somebody from the 3000 world to hit that teed-up ball. Kenandy was on hand at the Computer History Museum for the last HP3000 Reunion. That gathering of companies now looks like the wrong size of ball to hit the Kenandy cloud ERP ball.
"Since we saw them at the Computer History Museum meeting, Kenandy seems to have has re-focused on large Fortune 1000 companies," Floyd said. There are scores of HP 3000 sites running MANMAN. But very few are measuring up as F1000 enterprises. Kenandy looks like it believes the typical 3000 site is not big enough to benefit from riding a cloud. There are many migrated companies who'd fit into that Fortune 1000 field. But then, they've already chosen their replacements.The Kenandy solution relies on the force.com private cloud, operated by Salesforce.com. Smaller companies, the size of 3000 customers, use Salesforce. The vendor's got a force.com cloud for apps beyond CRM. But the magnitude of the commitment to Kenandy seems larger than the size of the remaining 3000 sites which manufacture using Infor's MANMAN app.
"Most MANMAN sites don't meet their size requirements," Floyd said. "I have a site that wants to consider Kenandy next year, but so far Kenandy is not very interested. We'll see if they are serious when the project kicks off next year, because we think Kenandy is a good fit for them."
The longer that small companies wait out such cloud developments as HP's $500 million per year, the better the value becomes for getting onto their cloud, migrating datacenter ops outside company walls. HP is investing to convince companies to build their own private clouds, instead of renting software from firms like Kenandy and Salesforce. Floyd and his company have said there's good value in switching to cloud-based ERP for some customers. Customization of the app becomes the most expensive issue.
This is the central decision in migrating to cloud-based ERP from a 3000. It's more important than how much the hardware to support the cloud will cost. HP's teaming up with Foxconn -- insert snarky joke here -- to drive down the expense of putting up cloud-optimized servers. But that venture is aimed at telecommunications companies and Internet service providers. When Comcast and Verizon, or Orange in Europe, are your targets, you know there's a size requirement.
You might think of the requirements for this sort of cloud -- something a customer would need to devote intense administrative resources to -- as that sign at the front of the best amusement park rides. "You must be Fortune 1000 tall to ride this ride," it might say. Maybe, over the period of HP's new cloud push, the number on the sign will get smaller.
April 08, 2014
Here it is: another beginning in an ending
Today's the day that Microsoft gives up its Windows XP business, but just like the HP 3000 exit at Hewlett-Packard, the vendor is conflicted. No more patches for security holes, say the Redmond wizards. But you can still get support, now for a fee, if you're a certain kind of Windows XP user.
It all recalls the situation of January 2009, when the support caliber for MPE/iX was supposed to become marginal. That might have been true for the typical kind of customer who, like the average business XP user, won't be paying anything to Microsoft for Service Packs that used to be free. But in 2009 the other, bigger sort of user was still paying HP to take 3000 support calls, fix problems, and even engineer patches if needed.
A lot of those bigger companies would've done better buying support from smaller sources. Yesterday we took note of a problem with MPE/iX and its PAUSE function in jobstreams, uncovered by Tracy Johnson at Measurement Specialties. In less than a day, a patch that seemed to be as missing as that free XP support of April 8 became available -- from an independent support vendor. What's likely to happen for XP users is the same kind of after-market service the 3000 homesteader has enjoyed.
Johnson even pointed us to a view of the XP situation and how closely it seems to mirror the MPE "end of life," as Hewlett-Packard liked to call the end of 2010. "Just substitute HP for Microsoft," Johnson said about a comparison with makers of copiers and makers of operating systems.Should Microsoft Be Required To Extend Support For Windows XP? The question is being batted around on the Slashdot website today. One commenter said that if the software industry had to stick to the rules for the rest of the office equippers, things would be differerent. Remember, just substiture HP (and MPE) for Microsoft and XP.
If Windows XP were a photocopier, Microsoft would have a duty to deal with competitors who sought to provide aftermarket support. A new article in the Michigan Law Review argues that Microsoft should be held to the same duty, and should be legally obligated to help competitors who wish to continue to provide security updates for the aging operating system, even if that means allowing them to access and use Windows XP's sourcecode.
HP did, given enough time, help in a modest way to preserve the maintainability of MPE/iX. The vendor sold source code licenses for $10,000 each to support companies. In at least one case, the offer of help was proactive. Steve Suraci of Pivital Solutions said he was called by Alvina Nishimoto of HP and asked, "You want to purchase one of these, don't you?" The answer was yes. Nobody knew what good a source code license might do in the after-market. But HP was not likely to make the offer twice, and the companies who got one took on the expense as an investment in support in the future.
But there was a time in the 3000's run-up to that end-of-HP Support when the community wanted to take MPE/iX into open source status. That's why the advocacy group was named OpenMPE. Another XP commenter on Slashdot echoed the situation the 3000 faced during the first years of its afterlife countdown.
(Once again, just substitute HP and MPE for Microsoft and XP. In plenty of places, they'll be used together for years to come.)
XP isn't all that old, as evidenced by the number of users who don't want to get off of it. It makes sense that Microsoft wants to get rid of it -- there's no price for a support contract that would make it mutually beneficial to keep tech support trained on it and developers dedicated to working on it. But at the same time, Microsoft is not the kind of company that is likely to release it to the public domain either. The last thing they would want is an open source community picking it up, keeping it current with security patches and making it work on new hardware. That's the antithesis of the forced upgrade model.
Note: MPE/iX has been made to work with new hardware via the CHARON emulator. Patches are being written, too, even if they are of the binary variety. XP will hope to be so lucky, and it's likely to be. If not, there's the migration to Windows 7 to endure. But to avoid that expense for now, patches are likely to be required. The 3000 community can build many of them. That's what happens when a technology establishes reliability and matures.
April 07, 2014
MPE patches still available, just customized
Last week a 3000 manager was probing for the cause of a Command Interface CI error on a jobstream. In the course of the quest, an MPE expert made an important point: Patches to repair such MPE/iX bugs are still available. Especially from the seven companies which licensed HP's source code for the HP 3000s.
This mention of MPE bug repair was a reminder, actually, that Hewlett-Packard set the internals knowledge of MPE free back in 2010. Read-only rights to the operating system source code went out to seven companies worldwide, including some support providers such as Pivital Solutions and Allegro Consultants.
The latter's Stan Sieler was watching a 3000 newsgroup thread about the error winding up. Tracy Johnson, the curator of the 3000 that hosts the EMPIRE game and a former secretary to OpenMPE, had pointed out that his 3000 sometimes waits longer than expected after a PAUSE in a jobstream.
I nearly always put a CONTINUE statement before a PAUSE in any job. Over the years I have discovered that sometimes the CPU waits "longer" than the specified pause and fails with an error.
A lively newsgroup discussion of 28 messages ensued. It was by far the biggest exchange of tech advice on the newsgroup in 2014, so far. Sieler took note of what's likely to be broken in MPE/iX 7.5, after an HP engineer had made his analysis of might need a workaround. Patches and workarounds are a continuing part of the 3000 manager's life, even here in the second decade of the 3000's Afterlife. You can get 'em if you want 'em.A workaround is the more likely of repairs for something that's not operating correctly in MPE, by this year. Patches were a free HP 3000 element, and those that HP created still are free today -- unlike the situation for HP's still-supported servers. The dilemma is that the final round of patches HP built weren't tested to HP's satisfaction. Plus, there's no more vendor work on new repairs.
Enter the third party supporters, the companies I call independent support providers. They know the 3000 as well as anybody left at HP, so long as they're a party to the source code for the operating system. In many cases, a binary patch isn't what a customer wants. Such a thing has to be tested, and a lot of production 3000s are under lockdown today. Changes are not invited.
But in the case of an MPE/iX jobstream PAUSE error, there's always a chance for a fix. HP's Jim Hawkins looked at Johnson's problem and ranked the causes Nos. 1-4. Number 4 was "possible MPE/iX bug."
Sieler said that it looked like this was a genuine MPE/iX flaw. What to do, now that the MPE/iX lab at HP -- which once included Hawkins -- has gone dark? Sieler pointed to patching.
After analyzing hxpause, the executor responsible for implementing the CI PAUSE command, I suspect there is a bug in the MPE/iX internal routine "pausey", which hxpause uses. The bug appears to be triggerable by :BREAKJOB/:RESUMEJOB, but I have not characterized precisely what triggers it. It is, however, apparently the result of the equivalent of an uninitialized variable.
I believe Allegro could develop a patch, should a customer be interested in it.
Patches beyond the lifespan of an HP lab are a touchy topic. A binary patch, as Allegro's Steve Cooper describes this kind of assignment, is likely to live its life in just one HP 3000 installation. It's a creation to be tested, like any patch.
And now it seems that patches are not only a for-pay item, but something to be guarded. HP even pressed a lawsuit against an independent company when the vendor observed that its patches were being distributed by the indie. No money changed hands in the suit settlement, but the support company said it would stop redistributing HP's patches.
This kind of protective culture from systems vendors is endemic by now, according to Source Direct's Bill Hassell. "This is a hot topic, both for customers as well as third party support organizations," he reported. "There have been very strong reactions from customers to recent statements about firmware restrictions." Hassell, well-known as an HP-UX expert among former Interex user group members, pointed to a handful of articles from HP's own blog and the industry press such as ZDNet, or one from PC World.
But the first one Hassell pointed at was the message from HP's own Mary McCoy, VP of Support for HP Servers, Technology Services. It's titled Customers for Life. In essence, the February posting says HP's firmware only gets an upgrade for "customers with a valid warranty, Care Pack Service, or support agreement."
We know this is a change from how we’ve done business in the past; however, this aligns with industry best practices and is the right decision for our customers and partners. This decision reinforces our goal to provide access to the latest HP firmware, which is valuable intellectual property, for our customers who have chosen to maximize and protect their IT investments.
In the face of this, and other HP announcements such as ProLiant patch availability, the customers who are commenting at HP's website are not happy. One noted that "the customer segment who will suffer the most from this revision in HP firmware availability will be the small and medium businesses performing their own in-house IT support." Some say the pay-for-patch mandate is only going to drive them to other vendors for small business servers. HP asserts that every vendor is doing this by now.
Enter the indie patching potential for MPE/iX. Binary patches are much more of a possibility when source code is in the hands of a support company. As far as I know, the source for HP-UX, or any other proprietary Unix, isn't in the wild, and the same can be said for Windows. Linux source is always available, of course. Nobody is going to be tagged as a Customer for Life when they choose Linux.
But that's also true of MPE/iX. Enter an indie support relationship and you get the benefits of that vendor's expertise, based upon the level of their understanding of MPE. Leave that relationship and you're not penalized. You're just on the hunt now for another support vendor of equal caliber.
A support company's caliber is measured by the way it conducts its business practices, not just what it knows how to create or fix. This vendor lock-in is something familiar to a 3000 owner. But it was technology, not business decisions, which enforced such lock-in during the 20th Century. The indie companies have a patch for the current era's lock-in error.
March 21, 2014
Shadows of IT Leaders, at HP and Apple
Earlier this week, the Reverend Jesse Jackson made an appearance at Hewlett-Packard's annual shareholder meeting. He used the occasion of a $128 billion company's face-up to stockholders to complain about racial bias. In specific, Jackson complained that the HP board, by now, should have at least one African American serving on it.
HP's CEO Meg Whitman took respectful note of Jackson's observation, which is true. After 75 years of corporate history that have seen the US eliminate Jim Crow, and the world shun apartheid, HP's board is still a collection of white faces (10 of 12). Hewlett-Packard always had a board of directors, but it didn't become a company with a board in public until it first offered shares in 1958. We might give the company a pass on its first 20 years, striving to become stable and powerful. But from the '60s onward, the chances and good people might have been out there. Just not on HP's board, as Jackson pointed out.
But that story about the vendor who created your HP 3000s, MPE, IMAGE and then the systems to replace all, is incomplete. It's just one view of what Hewlett-Packard has become. In spite of Jackson's accurate census, it overlooks another reality about the company's leadership. HP has become woman-led, in some of its most powerful positions. Whitman had the restraint to not to point to that. But she's the second woman over those 75 years to be HP CEO.
Companies with potent histories like HP will always be in the line of fire of misunderstanding. The same sort of thing happed to Apple this week. This rival to HP's laptop and desktop and mobile space was inked over as a company still run by the ghost of its founder Steve Jobs. Like the Jackson measurement of HP's racial diversity at the top, the Ghostly Jobs Apple story needs some revisions. HP's got diversity through all of its ranks right up until you get to the director level. Given what a miserable job the board's done during the last 10 years, it might be a good resume item to say "Not a Member of Hewlett-Packard's Board."
Regarding Apple, the misunderstanding is being promoted in the book Haunted Empire. The book that's been roundly panned in reviews might sell as well as the Steve Jobs biography by Walter Issacson, but for the opposite reasons. Jobs' biography was considered a hagiography by anybody who disliked the ideal of Apple and "Computing for the Rest of Us." He indeed acted like a saint in the eyes of many of his customers, and now that very sainthood is being devolved into a boat anchor by the writer of Haunted Empire. It doesn't turn out to be true, if you measure anything except whether there's been a game-changer like a tablet in the past four years.
Similar things happened to Bill Hewlett and Dave Packard after Hewlett died in 2001, leaving HP with just the "HP Way" and no living founders. Whatever didn't happen, or did, was something the founders would've fought for, or wouldn't have tolerated. The Way was so ingrained into the timber of HP that the CEO who preceded Whitman, Leo Apotheker, imagined there might be a Way 2.0. Tying today to yesterday can be a complicated story. There was an HP Way 0.5, according to Michael Malone's history of HP, Bill and Dave.
And the term "Bill and Dave" is invoked to this day by people as disappointed in 2014's Hewlett-Packard as Jackson is impatient with its diversity. Like the Ghostly Apple story, WWBDD -- What Would Bill and Dave Do -- can be told with missing information. Accepting such missing data is a good way to show you know the genuine HP Way. Or if you care, the correct state of the Apple Empire.Since my reader will care far more about WWBDD, let's just move to Malone's book, well-reviewed and available for the cost of shipping alone. Under the section An Army of Owners, he outlines the discounted HP employee stock ownership, one product of the Way.
One of the least-noticed aspects of Hewlett's and Packard's managerial genius was their ability to hide shrewd business strategy inside of benevolent employee programs, and enlightened employee benefits within smart business programs -- often at the same time.
Having so much company stock in the hands of HP employees ultimately meant that Bill and Dave could resist any pressure from Wall Street to substitute short-term gains for long-term success.
Malone goes on to note that employee stock purchasing gave Bill and Dave a great engine to make cash, as well as keep lots of stock out of the hands of institutional investors. That HP Way 0.5 came out of the period when Hewlett and Packard established their business ideals -- then crafted the story about it in a way that was true, but missing some of its most potent context.
When HP employees' stock descended into the nether regions of popularity -- share price plummeting into the $20s and qualification for the program becoming tougher -- Mr. Market of Wall Street started to take over. The board let the vendor chase big markets like PCs, as well as cut down small product lines to make way for a new way of doing business at HP. Bigger was sure to be better, even if it sparked lawsuits and besmirched the HP patina built over all those decades.
But at the same time, the company was getting on the right track with diversity. One of the last general managers the 3000 group had was Harry Sterling. He came out as a gay man before he left his job, and diversity for gender preferences was written into HP's codes.
The New York Times story about Jackson's visit to the meeting emphasized that representation of gender was not Jackson's chosen subject.
HP has a female chief executive, a female head of human resources, and a female chief financial officer, perhaps the largest representation of women in power of any major Silicon Valley company.
Meg Whitman, HP’s chief executive, cited what she said was a long record of civil rights activism on HP’s part. Mr. Jackson noted that HP did not currently have a single African-American on its board. “This board, respectfully, does not look like America.”
Ms. Whitman later said she would meet with Mr. Jackson on the subject.
HP's diversity, or the success of the post-Jobs Apple, are subjects to be misunderstood. Past injuries -- from dropped products, or envy of a supplier that made its fortune on mobile while others did not -- tend to shape beliefs about all that follows. Some 3000 owners will never forgive this vendor for losing its belief in unique platform environments, starting with MPE. Other pragmatists still have an all-HP shop, including decade-old 3000 iron. Leadership changes, sometimes more swiftly than products are eliminated. If Whitman and her board figure that naming an African-American is part of a new HP Way, they're likely to do so. Directors Shumeet Banerji and Rajiv Gupta would remind Jackson HP's board already has some diversity. HP isn't supposed to look like America, but present a world view.
March 05, 2014
What does a performance index represent?
I know this may be a tough question to answer, but thought I'd at least give it a try.
I'm doing an analysis to possibly upgrade our production 959KS/100 system to a 979KS/200, and I see the Hewlett-Packard performance metric chart that tells me we go from a 4.6 to 14.6. What does that increase represent? For instance, does each whole number (like 4.0 to 5.0) represent a general percentage increase in performance? I know it varies from one shop to another, so I'm just looking for a general guideline or personal experience -- like a job that used to take 10 hours to run now only takes 7 hours. The "personal experience" part of this may not even be appropriate, in that the upgrades may not be close to the metrics I am looking at.
Peter Eggers offers this reply, still worthy after several years
Those performance numbers are multiples of a popular system way back when, based on an average application mix as determined by HP after monitoring some systems and probably some system logs of loads on customer systems. No information here as to where you are on the many performance bell curves. The idea is to balance your system resources to match your application load, with enough of a margin to get you through to the next hardware upgrade.
People mention system and application tuning. You have to weigh time spent tuning and expected resource savings against the cost of an upgrade with the system and applications as is. Sometimes you can gain amazing savings with minor changes and little time spent. Don't forget to add in time to test, QA, and admin time for change management.
There are a many things to consider: CPU speed and any on chip caching; memory cache(s) size and speed; main memory size and speed; number of I/O channels and bandwidth; online communication topography, bandwidth, and strategy; online vs. batch priorities, and respective time slices; database and file design, access, locking, and cache hit strategies; application efficiency, tightening loops to fit memory caches, and compiler optimizations; and system load leveling.
Since you didn't understand the performance numbers, you might hire a good performance consultant that knows the HP 3000. Of course, look for the "low hanging fruit" fruit first for the biggest bang for the buck, and continue "up the tree" until you lose a net positive return on time invested.
You'll also hear it mentioned that adding memory won't help if the system is IO-bound. That is typically not the case, as more memory means more caching which can help eliminate IOs by retrieving data from cache, sometimes with dramatic improvements. This highlights the need for a good performance guru -- as it is easy to get lost in the details, or not be able to see "the big picture" and how it all fits together.
Aside from Eggers' advice, we take note of the last time HP rated its 3000 line.
At HP World in 2002, it announced the final new 3000 systems, all based upon the PA-8700 processors. At the high end, HP announced a new N-Class system based upon the 750 MHz PA-8700 processor. The new N4000-400-750 was the first HP e3000 to achieve an MPE/iX Relative Performance Units (MRPU) rating of 100; the Series 918 has an MRPU of 1.
HP contends that the MRPU is the only valid way to measure the relative performance of MPE systems. In particular, they maintain that the MHz rating is not a valid measure of relative performance, though they continue to use virtual MHz numbers for systems with software-crippled processors. For example, there are no 380 MHz or 500 MHz PA-RISC processors. Unfortunately, the MRPU does not allow for the comparison of the HP e3000 with other systems, even the HP 9000.
HP has changed the way it rates systems three times over the life of the HP 3000. During the middle years, the Series 918 was the standard with a rating of 1. In 1998, HP devised a new measurement standard for the systems it was introducing that no longer had the Series 918 at 1. It is under this new system that the N4000-400-750 is rated at 100. Applying a correction factor, AICS Research has rated the N4000-400-750 at 76.8 relative to the Series 918’s rating of 1.
February 27, 2014
Unix-Integrity business keeps falling at HP
Numbers reported by Hewlett-Packard for its just-ended quarter show the company's making something of a rebound in some areas. One analyst said to CEO Meg Whitman that she'd been at the helm of the company for three-and-a-half years, and she had to correct him during the financial briefing last week.
"Actually, I've been here two-and-a-half years," Whitman said. "Sometimes it feels like three-and-a-half, but I've been here two-and-a-half years."
It's been a long 30 months with many changes for the vendor which still offers migration solutions to 3000 customers making a transition. But one thing that hasn't changed a bit is the trajectory of the company's Unix server business. Just as it has over each of the previous six quarters, sales and profits from the Business Critical Systems fell. Once again, the BCS combination of Integrity and HP-UX reported a decline in sales upwards of 15 percent from the prior fiscal year's quarter. This time it was 25 percent lower than Q1 of 2013. That makes 2014 the fourth straight year where BCS numbers have been toted up as lower.
"We continued to see revenue declines in business-critical systems," Whitman said. Only the Enterprise Group servers based on industry standards -- HP calls them ISS, running Windows or Linux -- have been able to stay out of the Unix vortex.
"We do think revenue growth is possible through the remainder of the year on the enterprise [systems] group," Whitman said. "We saw good traction in ISS. We still have a BCS drag on the portfolio, and that's going to continue for the foreseeable future."In a small victory among the runaway slide of HP-UX and Integrity sales, Whitman predicted that HP will pick up two points of market share in the business critical system marketplace.
"Listen, we are turning the enterprise group around," Whitman said. "You can see it in the success in ISS revenues, as well as networking and storage. We've still got more work to do on the margins. When you consider the significant headwind of the declining BCS business, the technology services operating profit performance was strong. Business critical systems continues to be impacted by a declining Unix market. BCS revenue declined 25 percent year-over-year, to $228 million."
As a marker of how small a slice that's become at HP, consider that the profits alone from HP's lending operations were more than $100 million. And the ISS revenues are 15 times higher than Integrity, at $3.2 billion.
Total HP revenues for the quarter were $28.2 billion, down 0.7 percent year-over-year and up 0.3 percent in constant currency. Total profits were HP's been stuck on $28 billion quarters since 2013. Whitman said the company has been in pivot mode "to the new style of intellectual property, around investment in innovation."
I think we've been hard at work on doing a lot of things that are going to position us as this industry continues to go through some very challenging changes. The pace of change and the magnitude of change here is as great as I've seen in my career. I think we're reasonably well positioned take advantage of those changes.
Changes in business are dictating new outlooks for older businesses at HP. It's always been that way at the vendor which cut off its 3000 futures during a post-merger closeout of product lines.
"We have businesses that are declining businesses," Whitman told the analysts, who were sometimes complimentary of where she's leading the company over the two-plus years. "We understand where the declining businesses are, we understand what we need to do with them. We've got businesses that are holding in terms of revenue, and then we've got growth businesses."
What's growing at HP will be getting whatever investment and energy the company can manage. "We have pivoted investment," Whitman said. "We've pivoted people. We've pivoted go-to-market to those growth areas in the company."
January 31, 2014
The Final 3000 Quarter at Hewlett-Packard
It's the final day of HP's Q1 for 2014, so in about three weeks we'll know how the company has fared in its turnaround. Analyst sites are rating the stock as a hold, or giving the company a C+ rating. It's instructive to see how much has changed from the final quarter when 3000 customers sent measurable revenues to Hewlett-Packard.
That would be the Q1 of 2009, including the final two months of HP's regular systems support sales of November-December of 2008. At the end of '08 HP closed its MPE/iX and 3000 lab. And without a lab, there was no way business critical support would offer much of an incentive to keep HP's support in a 3000 shop's IT budget.
The customers' shake-off of HP's support revenue didn't happen immediately, of course. People had signed multi-year contracts for support with the vendor. But during the start of this financial period of five years ago, there was no clear reason to expect HP to be improve for MPE/iX, even in dire circumstances. Vintage support was the only product left to buy for a 3000 through the end of 2010.
In Q1 of 2009, HP reported $28.2 billion in total sales. In its latest quarter, that number was $29.1 billion. Nearly five years have delivered only $900 million in extra sales per quarter, despite swallowing up EDS and its 140,000 consultants and billions in sales, or purchasing tens of billions of dollars worth of outside companies like Autonomy.
In January of 2009, HP 3000 revenues were even more invisible than the Business Critical Systems revenues of today. But BCS totals back then were still skidding by 15-20 percent per quarter, 20 quarters ago. And even in 2009, selling these alternatives to an HP 3000 was generating only 4 percent of the Enterprise Server group's sales. Yes, all of enterprise servers made up 2.5 percent of the 2009 HP Q1. But that hardware and networking is the short tail of the beast that was HP's server business, including the 3000. Support is the long tail, one that stretched to the end of 2008 for MPE, more than seven years HP announced the end of its 3000 business plans.
It's easy to say that the HP 3000 meant a lot to HP's fortunes. In a way it certainly did, because there was no significant business computing product line until MPE started to get stable in 1974. But the profits really didn't flow off the hardware using that 20th Century model. Support was the big earner, as the mob says of anybody who returns profits to the head of the organization. HP 3000 support was always a good earner, right up to the time HP closed down those labs and sent its wizards packing, or into other company divisions.
It had been a small business all along, this HP 3000. A billion dollars was a great quarter's worth, and the 3000 division never came close. But all of HP's business critical servers together only managed $700 million in sales -- five years ago. The profits from such customers were only significant because of support relationships. This is why those contracts were the last thing HP terminated.
This eventually became a good thing for the stalwart support companies that remained by the 3000 manager's side. At least there was no HP to quote against a company like Pivital Solutions that specializes in real MPE/iX support, for example. No vendor claims of "we can engineer a patch or software fix" that a system vendor uses to retain a customer. By January of '09, HP Support took on the remaining 3000 operations and briefed customers but offered no clue on how much contact the community might expect from support. HP's community liaison to the 3000, its business manager and lab experts departed.
The final months of 2008, which made up that very last HP 3000 quarter, capped a year with many months of no information whatsoever from the vendor. HP didn't appear eager to address much except the migration nuances still available to companies leaving the platform. To nobody's genuine suprise, Hewlett-Packard wasn't winning much migration business from 3000 customers making a transition.
We know that's true because of a report from Stromays during 2010. Sometime during 2008, HP re-established contact with the only company that made a concerted effort to emulate an HP 3000. According to Stromasys CTO Dr. Robert Boers, three out of every four departing 3000 sites chose a non-HP environment. And without MPE/iX to support, the only money a former 3000 owner would be sending -- if they were pragmatic, and not incensed -- would've been for HP's Intel-based Proliants, running Windows.
The quarters of 2009 and 2010 might have eked out a bit of revenue from 3000 owners. Some were determined to purchase the HP support that had no hope of fixing problems via new engineering. But HP was not encouraging this by the final months of Q1, 2009
HP strongly recommends that customers request all available PowerPatches and SW Media that they may need for the remainder of the life of their e3000 systems, before December 31, 2008. Customers under Mature Product Support without Sustaining Engineering (MPS w/o SE) can still request PowerPatches and SW Media during the remainder of the Limited Support Extension, through their local HP Representative or Contract Administrator; however, processing and delivery time may vary.
The one and only source of revenue today from the HP 3000 community to HP -- something that will comprise a scant trickle of cash -- is the $432 license transfers, still in place after five years to enable an emulator to replace a 3000.
The HP Software License Transfer process will continue to be used in the event an HP customer wishes to transfer an existing MPE/iX Right-To-Use (RTU) license from a valid e3000 system to an emulation platform of the customer’s choice that runs on other licensed HP products. It will be a system-to-system transfer, regardless of the number of CPUs on the destination platform.
Even in the situation of forcing companies off a server that was working, Hewlett-Packard attempted to keep them on hardware "that runs on other licensed HP products." Classy to the end. HP signed off in January of 2009 with a thanks for all the fish message, urging everybody to get to a lifeboat. But few of the boats would be flying an HP flag, despite these lyrical hopes.
Finally, we want to take this opportunity to thank OpenMPE, Interex, Encompass, and Connect for their dedication to customer advocacy over the years, our HP e3000 ISVs, tools, and support partners that have contributed a rich set of products and services on top of MPE/iX for our customers, and our migration service and tools partners for their invaluable services and products in assisting our customers with their migrations to other HP solutions. Most of all, our sincere thanks to our valued customers. HP looks forward to continuing to provide our customers the best-in-class services and the opportunity to serve you with other HP products.
January 13, 2014
HP to surf legacy OS onto new platform
HP's Unix customers aren't so lucky, but the companies that rely on the NonStop OS have been told they're getting an x86-ready version of their fault-tolerant environment.
“No matter what HP NonStop hardware architecture you choose, you will continue to get 100 percent NonStop value that makes what you do truly matter,” CEO Meg Whitman explained to the installed base. It's a message that might make an HP-UX customer wonder if what they're doing, strictly on Itanium hardware, will truly matter.
What matters to HP is the stickiness of the NonStop customer. They demonstrate the same kind of product and company loyalty that the 3000 customer did, at least until HP announced the end of its MPE business. Technically, there are possibilities for c7000 blades to run the environment first released when Jim Treybig left HP to form Tandem.
There are no promises here, and no roadmap for release of this transitional product. It's much further out than the reality of running MPE/iX on Intel servers -- and that Stromasys solution won't require special Intel hardware from HP. But it's more of a future than the OpenVMS and HP-UX enterprise customers are facing.NonStop is in heavy use in the banking industry, and the dollars it brings to Hewlett-Packard are rich with profits. There's never been a transition that HP has managed to sweep a legacy -- sorry, proprietary -- OS like NonStop onto the wave of commodity hardware. MPE/iX got its marching papers, HP-UX was kept on the Itanium leash, OpenVMS was leashed until last year -- when its customers learned the OS was going to freeze on the current generation of Itanium chips.
But it's possible that this vendor is finally seeing a way to model another kind of migration, one that delivers more options to a customer instead of declining levels of support and relevance. A broad-brush HP document that waves the flag toward the future is online. NonStop is about three years younger than MPE/iX, and it's been a part of HP since the Compaq acquisition of 12 years ago.
This is what choice might have looked like for three other HP-owned operating systems. It's also the first significant product announcement that could have an impact on the careening fortunes of the Business Critical Systems group. If there's going to be a migration in the future for this group of business computer customers, HP would rather see the transition from one set of hardware with an HP badge to another.
December 30, 2013
2013 emboldened 3000 changes for both migration and homesteading practices
As a service to readers who crave summary and broad strokes, we hearby sketch what the year 2013 meant to the 3000 community. It's too much of a cliche to say that the previous 12 months were driven by change. That's been an essential element for the community since 2001. But a dozen years has now spread changes onto the migrating community member, as well as those who have made their mission one to homestead.
The HP 3000 CHARON emulator from Stromasys showed more promise this year, but some of its impact lay in the way it held migrations in check without even being deployed. Another factor came from the economy. By year's end the markets were flying at an all-time high, but the recovery has its blind spots, according to some 3000 users. Couple the proposed savings in keeping MPE apps virtual with with an uncertain future for HP's replacement solutions, and the movement away from the 3000 slowed.
Even with that evidence, some shutdowns of systems stood out. A major installation of 3000s that had been serving the airline industry saw their work moved to .NET replacements, as Open Skies became New Skies. We also saw Hewlett-Packard closing down its own internal HP 3000 operations at long last, powering off the final four systems, just 12 years after advising its customers to do the same.
The year also offered a chance to see what remained on the field a decade after the community marked the World Wide Wake of 2003. The server got its first iPad app when a terminal emulator emerged for iOS, even as other experts found other ways to get an MPE console onto a tablet. And the exit of expertise continued throughout our 3000 world, even as some stalwart resources remained online.HP set the pieces in place long ago for its 3000 strategy to evolve away from the need for physical hardware. The Apps on Tap strategy that led to the Open Skies offering -- where networked 3000s serve up apps to customers who don't have servers onsite -- is now being echoed in Software as a Service.
Sites that moved off HP 3000 installations for ecommerce software watched their vendor get acquired, then see the open version of their software slip into a 140-product lineup. It was an example of how migrations became a part of life at those 3000 sites that had already left MPE behind. Even among the sites where server migration hasn't occurred, data migration is already afoot. Customers are now looking at a migration off of Windows XP for their users, and some are facing the same reluctance and lack of budget they saw for 3000 diaspora.
Hewlett-Packard had its share of problems to overcome, from shuffling the pathways to MPE documentation online to keeping its enterprise mission critical business from evaporating. Each of the four quarters of revenues for its BCS group posted a 20 percent sales decline from the previous year's numbers. It was a continuation of a 2012 trend. The company's CEO and CFO called the Unix server business a formerly growing venture. Then there was the announcement of curtailing another HP business OS, OpenVMS, starting in 2015 when new Integrity systems won't run on the environment. Things got so critical for BCS and its bretheren that HP reorganized the whole enterprise server operation into a single unit, then removed its executive VP from the job.
Emulator news emerged from two fronts. Stromasys built out its management for the CHARON product and opened the doors on its North American rollout with a May Training Day event. The latter was the first 3000-specific event in almost two years. In the snows of February in Europe, a similar event for CHARON recalled HP's final organized event for the 3000, nine years earlier. Early in the fall, a group of freeware developers was trying to create a not-for-commerce version of what it called a simulator of HP 3000 hardware. Successful booting remained elusive.
In the meantime, the offering of an emulator had customers checking HP's rules and processes for license transfers, some three years after the company shut down all other 3000 operations. It helped to be able to ask for the right process, and ask the right person.
Another trend emerged in the longevity of the 3000 expert. Outlasting the 3000 server was a duel that some experts were giving up. One company in LA made a shift to Windows because its IT staff for the 3000 was aged 67 and 72. But among those who continued to keep the MPE lamp lit, techniques to continue 3000 operations still emerged. Replacing HP's disks with third party alternatives got detailed to swap in fresh hardware for decade-old drives. Moving store to disk files with attributes intact is possible with newer open source archiving software.
The year showed that change itself has changed for the community. The long run of the HP 3000 unreels into the dark of the as-yet-unlit future. There was even a careful examination of the costs of remaining on the 3000 for 5-10 years.
December 02, 2013
While you were away, what HP put into play
We're back after a 4-day holiday. The Thanksgiving holiday period can be interesting times for watchers of Hewlett-Packard. We count ourselves among that group, even though the company has little to do with the lives of homesteading 3000 users. (But not nothing at all -- we heard last week that HP Support contracts for 3000-connected HP peripherals have been altered. End-of-support-life dates have been adjusted, according to our source. Check your contract; indie providers are available as an alternative.) HP announced the Odyssey program to give a Linux future path for Unix customers during the week. Of course, the 3000 exit notice took place just a week before Thanksgiving in 2001.
However, much broader items than tactical details of contracts surfaced over this holiday weekend. The most splashy was the news that Hewlett-Packard is now the company providing infrastructure for the US Healthcare.gov website. That's the site that turned away about 80 percent of users during October because of technical and bandwidth problems.
HP signed a $38 million contract with the US Health and Human Services agency this summer, but Terraform (a subsidiary of Verizon) had built out the website hosting that blocked many an attempt to use it. Over the weekend, healthcare.gov doubled its bandwidth and can now reportedly serve 50,000 users simultaneously. That sounds like a lot, but about 800,000 citizens tried to open an account. (Just as a note, as of 2 PM today, we registered an account and shopped for the first time online.)
The largest simultaneous user count we've ever heard reported for a single HP 3000 server was 2,200. Consider that was a single server, built with PA-RISC (two generation-old chips) using SCSI IO. Redundancy has been an essential high-volume aspect of 3000s since Quest Software built its NetBase/Shareplex replication solution in the 1980s. Quest, now a division of Dell, still supports HP 3000 sites using the product, according to John Saylor there.The problem at healthcare.gov has been its architecture, rather than the horsepower of the iron. HP seems to have little to lose in taking over this contract. By the accounting at the Wall Street Journal, 36 states rely on application through healthcare.gov and just under 27,000 people were able to enroll in a plan during the first month. The 14 state exchanges enrolled 79,391 people during the same period.
The Journal article says the government has been aware of "certain problems with the Terremark hosting service since late 2010." HHS moved its Medicare and Medicaid service centers to Terremark during a two-year hosting contract. These service centers oversee Healthcare.gov.
The details in the WSJ report include an oversight, which if true, would be laughable in a standard HP 3000 environment: "Its design didn't include a full backup version of the site in a different data center. Healthcare.gov is still housed with a single data center." The HP 3000s which Hewlett-Packard unplugged from its own datacenter in October had backups in Austin. HP also got a $4 million contract in September for healthcare.gov DR services.
On the company valuation trail, HP played out a Q4 2013 report that Buys Time, Not Triumph according to a WSJ analysis. "Tech Giant Arrested Its Slide in Some Key Areas, but Pressures Will Intensify. One good quarter doesn't equal a turnaround." But the numbers which included dreary figures for HP's Unix operations still managed to push HP's stock to a two-year high as of this morning.
The markets were not spooked by the prospect of business critical server sales dipping once more.
HP also opened up access to its board of directors in a vote during the Thanksgiving week. A vote by a simple majority of shareholders will be enough to change HP rules governing the nomination of directors or the size of the board. Previously, a two-thirds supermajority was required. "The change doesn't immediately let activists storm the boardroom, but could lower the gates that keep them out," said a Journal article.
HP got its current board chairman, Ralph Whitworth, when its rules changed in 2011 to admit that principal at "an activist hedge fund Relational Investors LLC."
Right now, you've got to own at least 3 percent of HP's stock for three years to nominate a director. The Journal said only three people have owned that much sstock since the end of 2012. This makes nomination of new directors an insider affair today.
November 27, 2013
HP quarter beats analyst estimates, but Integrity solutions' profit, sales slide again
HP has managed to eke out a penny more than business analysts estimated for its 2013 fourth quarter earnings. These days such a "beat," as the analysts call it, is essential to avoiding a selloff after a report like yesterday's. But the positive news did not extend to the business group which builds and engineers the Unix Integrity servers -- a significant share of the migrated HP 3000 installed base.
More than once during the one-hour report to financial analysts, HP CEO Meg Whitman and her CFO Cathie Lesjak talked about Unix like it's a market whose growth days have been eclipsed by steady erosion of sales and profits. "We have more opportunity to improve our profitability," Whitman said about a quarter where the overall GAAP earnings were 83 cents a share. That's $1.82 billion of profit on sales of $29.1 billion in sales. Revenues declined 1 percent against last year's Q4.
But R&D, so essential to improving the value of using HP-created environments like HP-UX, has seen its days of growth come to halt, and then decline at the Business Critical Systems unit. Lesjak said the company's year-over-year decline in R&D was a result of "rationalization in Business Critical Systems." In particular, the company's Unix products and business can't justify R&D of prior quarters and fiscal years.
As you look at the year-over-year declines in R&D, that was really driven by two primary things. One is the rationalization of R&D, specifically in the Enterprise Group's Business Critical Systems -- so we really align the R&D investment in that space with the long-term business realities of the Unix market. We did get some of what we call R&D value-added tax subsidy credits that came through. Those basically offset some of the R&D expense.
Business Critical Systems revenue declined 17 percent in the quarter to $334 million, due to "a declining Unix market." On the current run rate, BCS represents 1 percent of HP sales. And BCS sales have been dropping between 15 and 30 percent for every quarter for more than six quarters. HP posted an increase in its enterprise systems business overall, mostly on increased sales of the Linux and Windows systems in its Industry Standard Servers unit.
HP said it expects "continued traction in converged storage, networking, and converged infrastructure," for its enterprise business. But somehow, as the entire Unix market shrinks, HP said it's maintaining market share in that space. R&D at BCS will not be part of HP's planned growth for research and development in 2014, though.
She explained that R&D is down "due to streamlined operations across the Enterprise Group and lower R&D expenses, specifically within BCS." Long term, we remain focused on investing in innovation across the organization, and in fact, we've added headcount in engineering in FY13." In 2011 HP announced an initiative to add Unix features to its Linux environments in the biggest R&D project driven by Martin Fink, then-GM of BCS.
"We saw improved sales in our mainstream server business, but we need to improve our pricing discipline and profitability," Lesjak said. "Although revenue continued to decline in Business Critical Systems, we expect to hold or gain share in calendar Q3. And we have announced plans to bring a 100 percent fault-tolerant HP NonStop platform to the x86 architecture."
HP-UX and OpenVMS have no such plans. BCS revenues, including NonStop operations, dropped 26 percent from 2012 to 2013. This even includes an accounting for last year's deadly Q4, when HP had to report a $6 billion loss overall.
HP finished 2013 with $112 billion in sales, down five percent, and $6.5 billion in profits before taxes. The company restructured its way to about 13,000 fewer jobs during the fiscal year. Almost 25,000 people have exited HP since the program began in 2011.
Two organizational repositions were mentioned during the briefing. Robert Mao, chairman of a new China Region for HP's business, reports directly to Whitman. She also noted that Fink, who was named head of HP Labs last year -- a post that once was a full-time job -- has now added duties of leading the HP Cloud business as its General Manager. HP Cloud competes with Amazon Web Services among others. Whitman said Fink "will significantly accelerate our cloud business."
"Martin is a true technology visionary who brings tremendous understanding of the enterprise hardware and software space, extensive experience in platform development," Whitman said, "and he literally wrote the book on Open Source."
Whitman was referring to a 2002 book of Fink's, The Business and Economics of Linux and Open Source. The book which is out of print got a glowing back-cover blurb from Tim O'Reilly. But the publisher of textbooks Prentice Hall now touts bestsellers such as How to Succeed with Women and the How to Say It series.
The strategy in Fink's book came from an era when one positive review said, "Linux and Open Source is not 'just' for geeks any more." Linux -- and not the HP-UX and VMS markets where Fink managed before his Labs post -- is what's driving the modest growth in HP server business.
November 14, 2013
4,383 days for an ecosystem to slip, survive
It's November 14 once again, a date plenty of people don't consider special. I was part of a telephone-only CAMUS user group meeting today. While we chatted before our meet began, I asked if anyone knew the significance of the date. It took a few minutes of hinting before someone -- Cortlandt Wilson of Cortsoft -- said this was the day HP ended its future vision for a 3000 business.
At the time the announcement emerged in 2001, HP said it was worried about the fate of the MPE and 3000 ecosystem. It had good reason to worry. It was about to send a shock wave that would knock out many denizens in that ecosystem. The losses to customers can be counted many ways, and we have done that every year since that fateful day. This is the 12th story I've written about the anniversary of the HP exit. The day remains important to me when I count up what's been pushed to extinction, and what has survived.
Companies come to mind this year. The photo at right shows the vendor lineup for our printed November 3000 Newswire in 2001. (Click it for details.) It was a healthy month, but not extraordinary. Almost 30 vendors, including three in our FlashPaper, had enough 3000 business to make budget to advertise. We'll get to the ones who remain in business after a dozen years. But let's call the roll to see what HP's ecosystem exit pruned or hacked away.
3KWorld.com was a worldwide 3000 website operated by Client Systems. It was large enough to draw its own advertising and used all of the content of the Newswire under a license agreement. It's gone. Client Systems has hung on, though.
Advanced Network Systems (web software circa 2001) and Design 3000 (job scheduling) and Epic Systems (hardware resales) are all gone, too. Interex went out of business in 2005 in a sudden bankruptcy; OmniSolutions (MPE interface software) and TechGroup (consulting) and WhisperTech (a programmer's suite) and COBOL JobShop (programmer services) are all gone, too.
Believe it or not, out of a list of 29, those are the only complete extinctions. Some of the rest have changed their colors like a chameleon, blending into the IT business of 2013. And many have gotten too pared down to consider the broad business outreach they felt confident about in 2001.Still serving under their same flag after all these years? Count on 3K Associates, Adager, Computer Solutions, Genisys, Lund Performance Solutions, MB Foster, Minisoft, Nobix, Open Seas, Orbit Software, RAC Consulting, Robelle, ROC Software, Robust Systems, and The Support Group.
A few others have evolved but remain alive after being absorbed. WRQ is now deep inside Attachmate, so deep the WRQ name is no longer part of the corporation. Quest Software slipped into Dell this year. Both of these acquired companies still sell, or support, MPE clients. The same is true of Speedware, which rebranded as Fresche Legacy while it's now honing in on IBM AS/400 clients.
And then there's Hewlett-Packard. Ah, the hand that threw the switch that sent a shock to the ecosystem. Within six months of November 14, the dominant Compaq managers were led by a CEO in her third year to erase HP's Way. Bill Hewlett's son Walter lost a proxy fight so legendary that it's the example used on the Wikipedia entry for proxy fight.
It's coincidental that the departure of 3000 products from HP's future happened at the same time as the vendor's decade-plus slide. The company has reported profits each year. HP became Number 1 in sales by adding billions in PC business. But the rest of the company's heritage has become a specter. Some community members take some bitter solace in knowing that the HP which believed in their computer died its own death less than a year later in a courtroom, where that proxy fight had its finale.
People must weather change as a regular part of life. One friend of mine took note a personal shift in business opportunity, on the heels of a decline, and uttered the prayer of the pivoting hopeful player: "The only constant is indeed change."
The tally of 3000 pros and resources pushed into extinction after these 12 years isn't limited to the Newswire's November 2001 lineup. Other extinguished companies from the Interex side include Hi Comp (backup software) plus the lineup of Interex conferences including HP World, the HP e3000 Solutions Symposium, and one of the hardest-working technical meetings, SIG/3000. A meeting in person is a high-risk opportunity to learn and grow. The Web filled in, at a rate we couldn't imagine in 2001.
Oh, the irony of that November. We wrote a lead story for our Flash Paper that reported a record month for 3000 sales at the US distributor of the server. We then had to fold over another sheet of paper at presstime, an Extra, to explain that HP said it only started a two-year period of "business as usual," to quote the impossible spin of the vendor's marketing chief. "There really was no other choice," said the company's general manager of the time about the exit scheme.
There was another choice, but HP didn't make it for the 3000. Get over it, or forget it, or take the time to make a good transition -- these were all responses that changed tens of thousands of lives and careers. We don't know of many people who left IT altogether for another career since then. Some have retired, or at least planned to do so.
Through those dozen years I've tried to put the most reasonable face on the inevitable trend that HP started. The vendor said its decision to talk about its walkout on this market was "about concluding it's time to advise customers about the long-term trend." It's certainly been a longer term than HP could imagine in 2001. More than twice as long if the remaining vendors and customers count for anything. I believe they do -- representing sage management of a resource, or the prospect for a transition-migration services company and vendors of products for the same.
If 20 out of those 29 advertising partners are still in business, the impact of that trend is limited to what two-thirds of them have done next, or what they've done with what's left. Downsized with layoffs and canceled projects. Consolidated product lines and froze enhancements. Launched new products into different, crowded markets. Found a buyer or a senior partner to infuse cash and new commerce in a new direction. Timed their own exit with enough fortune to retire.
Unlike these companies -- some so small their operating budget wouldn't buy coffee service for a single HP sales region -- Hewlett-Packard didn't want to be the last person to leave the MPE party. Lead onward to Unix, it figured, telling customers on Transition Day No. 1 that free licenses for HP-UX were available. Six years later, according to Dr. Robert Boers of 3000 emulator vendor Stromasys, HP told them that 75 percent of former 3000 owners were using something other than HP servers.
It's a story with potential to be a rousing case study by business graduates, the exit of a vendor that could bank on more than 25 years of business selling a proprietary product. But it can be debated that a simple roll call of survivors tells just the most public part of the story. The career changes and chameleon shifts, the evolution of the elder generation of computer wizards can only be told one story at a time. If there are any less than 4,383 stories like that to tell, I'd be surprised. But we've all lived though a dozen years of surprises throughout that inevitable trend. I'm still here to tell stories, about survival as well as slippage. Try to permit next year's November -- the 40th year of MPE -- to contain a memory of the day your ecosystem changed.
November 05, 2013
3000 transfers receive special HP treatment
Customers who are making a transfer of their HP 3000-MPE licenses get special treatment from HP when moving to the virtualized server product from Stromasys. Jeff Elmer of Dairylea Cooperative said he had to rely on Stromasys to help him find the right person -- and explain things -- during a recent license transfer.
"Unfortunately, the transfer experience was not as smooth as I would have hoped," Elmer said. "Ultimately, it's not a big deal to do the transfer, but you do need to find the right person to talk to. I filled out forms and exchanged e-mail with Erick. The best advice I would give anyone would be to ask Stromasys for help."
By the time a customer is ready to transfer a license to an emulator, of course, Stromasys will be a familiar contact. The company recently added HP 3000 consultant Doug Smith to its staff, bringing even more MPE familiarity to the operation. Paul Taffel, who's been blazing the 3000 trails since 2011 for Stromasys, sent us a note about the same exception to transfer rules we'd found in our October, 2012 story about software licensing.
About our story yesterday, Taffel said, "You missed one important thing, which we've put into our new User Guide. The last paragraph might be [most] important:
Emulator MPE/iX software transfer licenses are available from HP for (at the time of writing) $400. For more information, email the appropriate HP Software License Transfer department:
Specify that you wish to obtain an HP3000 Emulator Transfer License, and that your request is for an internal company transfer. HP has agreed to create an exception for HP3000 Emulator Transfer Licenses, as their license transfer process normally only applies to transfers between different companies.
Indeed, the $400 figure is current on the HP webpages we referenced yesterday. It's more crucial to get someone who knows about the 3000's special exception in the AMS Software License Transfer unit of the Hewlett-Packard Development Company. HPDC is the owner of Hewlett-Packard's intellectual property, which includes MPE/iX licenses.
The exception is that a customer gets to sign both the originating and receiving lines of the transfer document. Usually, those are two different signatures, for seller and then for buyer. As of this year, it takes some explaining to receive permission to do this. There's at least one person in HP Americas SLT, Erick, who's done this by now -- for Elmer. But you might not be able to ask for him by name.
"I'm hoping that Erick will spread the word about emulator transfers within HP," Elmer said.
November 04, 2013
HP 3000 software license transfer: still $400
Earlier this month, a famous manufacturer of aircraft had its HP 3000 director checking up on software license transfer processes. This SLT is not the one that a system manager cuts for rebuilding your MPE/iX directories, but the fee HP charges to move your MPE to another system. Well, the fee and the required documentation. In this case, licenses for an A-Class server and a Series 979 4-way are in the on-deck circle, wating to go to bat on the Stromasys virtual HP 3000, CHARON HPA/3000.
Just as the 3000's Transition Era was getting underway in earnest, this was being called an Emulator License. HP's Mike Paivinen and others at the vendor arranged for such a license, with a suggested cost of $500. In 2004, nobody knew what an emulator would look like once it emerged. Strobe Data sells an HP 1000 emulator that includes a hardware board plugged into a desktop server. Strobe couldn't move forward with a 3000 version of that product, and by 2012 CHARON was finally into the marketplace.
HP's process for putting MPE legally onto CHARON follows the same steps as if a customer purchased a newer or more powerful Hewlett-Packard brand of iron. 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, taking MPE/iX off HP's 3000 servers in a way that will satisfy any auditor.
HP's Jennie Hou told us last fall that emulator-based license transfers within a customer's site present no problem for the current process. We looked into the license transfer process when the personal 1-user freeware version of the Stromasys emulator was rolling out -- and the download included an instance of MPE/iX.Last year's information included the word immediate in our headline, but that's no report on the speed of any process inside HP (or at a customer site, for that matter; budget approvals can take time.) Hou was telling us last year that HP expected any freeware user to be making a transfer once they started to use that 1-person emulator to test CHARON.
Stop snickering. You know how much HP loves its MPE/iX licenses. Just because de-licensing a production 3000 seems hasty, when you're still checking out CHARON, doesn't mean you can't do it. Most emulator customers, however, are taking a more prudent route while replacing their older HP iron. Older is a relative term: the Series 979 hardware was built at least a decade ago, as was the A-Class machine. If an MPE/iX application is to have another five years or more of service, operating on something newer seems safer. It depends on how well that HP iron has been maintained, especially disk drives, power supplies, and CPU boards.
The phone number to HP's SLT operation in the Americas is 408-447-4418. (In Europe, it's +48 22 3060152.) If you haven't been to HP's webpage for SLT in the Americas, it's listed under an HP-UX name. To better understand the process, and get more detailed contact information and specifics for a transfer, visit hp.com/softwarereleases/releases-media2/slt/americas/sltprocesshpux.html
That's right -- the MPE/iX license transfer operations are holed up with HP's Unix system adminstrator information. That's a connection that might be appropriate several years from now, if an HP Integrity emulator is ever needed, or built for HP's Unix customers.
October 24, 2013
Crime keeps non-3000 platforms most busy
HP has sponsored a new edition of the Ponemon study of crime commited via computers. The results are trending in the direction everyone expects: upward, with cyber-crime now topping $11 million per typical breach in the US. The chart above tracks the frequency of the type of crime committed. Malware, viruses, worms and trojans are on just about every company's report. Where the cyber-attack takes place -- the location of the webserver -- makes a difference in the cost of the breach.
We found that US companies are much more likely to experience the most expensive types of cyber attacks, which are malicious code, denial of service and web-based incidents. Similarly, Australia is most likely to experience denial of service attacks. In contrast, German companies are least likely to experience malicious code and botnets. Japanese companies are least likely to experience stolen devices and malicious code attacks.
HP worked hard in the late 1990s to establish Web server capability for the HP 3000 and MPE/iX. At first there was a product for sale from HP. A few years later, with little success of selling it, HP gave it away as part of the MPE/iX Fundamental Operating System. But even in FOS, serving web pages never caught on. Web page services, of course, are the top way to distribute malware, bots and other costly disruptors.
In a way, the lack of a Web capability has made the HP 3000 one of the least-attacked environments. But even a 3000 connected to the Internet in any way is susceptible to a hack. It's just tougher to steal something worth fencing, plucked out of an OS built with a ring of privilege at its heart. Not impossible, never. Because like the Ponemon report says, the most costly cyber-crime happens from within datacenter operations.
The report, which HP has sponsored for several years, calls those attacks from within "malicious insiders." They're the most costly of all kinds of cyber-attacks, based on 234 companies that Ponemon has surveyed. But the second- and third-most costly kinds of attacks are unlikely to be unleashed on MPE/iX systems: Denial of Service (DOS) and Web-based attacks.
The most expensive attacks are malicious insiders, denial of service and web-based attacks. In the context of our study, malicious insiders include employees, temporary employees, contractors and, possibly, business partners.
Detecting an attack and recovering from one make up the biggest chunk of the expense of cyber-crime. 54 percent of the cost comes from "productivity loss and direct labor." The latter segment is IT man-hours. The former might well include IT operations that need to be deferred or delayed while crime cleanup goes on. On average, a malicious insider attack takes about six weeks to recover from, according to the survey.
Software to protect computer systems from crime is complex, and according to a Network Computing article, requires significant care and feeding after it's been deployed in a company. The Ponemon report calls this software Security Intelligence Systems. Another common name for it is a Security Information and Event Management (SIEM) product. HP sells one that's well-regarded, ArcSight. Longtime HP 3000 vendor Quest Software has moved into the field with its own product.
The greatest target for cyber-crime appears to be Windows-based environments, since they're the most widely used in the world. It's also reflected in an InformationWeek study that shows Symantec's SIEM software is most-installed.
HP 3000s which are still serving credit card usage, or dealing with healthcare records, are the most likely candidates for these kinds of software solutions. The InformationWeek report said that e-commerce and HIPAA drove one out of every four SIEM deployments.
Those turn out to be some of the most likely 3000s to be used in an open-to-the-public setting, too. The costs go beyond the software's expense, of course.
Many SIEM products are expensive, but the full cost isn’t just the software or hardware. These products require extensive system integration to realize their potential. That means you must account for staff hours (or pay consultants) for installation and configuration, as well as integration with other products. SIEM products rely on databases for event and log analysis, which means database administrator resources must also be considered, not only for the ini- tial configuration of the product but also on- going maintenance and tuning. And of course, IT and security teams will need to be trained to use the product. These factors af- fect your total SIEM cost. As one respondent said, “Total cost of acquisition and operating is elusive. When you purchase a SIEM solution, the work is just beginning."
Return on investment for deploying security intelligence is small, at 21 percent. But the cost is reasonable compared to the attack's aftermath -- company reputation, fines and restitution. Ponemon's survey said
Companies deploying security intelligence systems experienced a substantially higher ROI at 21 percent than all other technology categories presented. Also significant are the estimated ROI results for companies that extensively deploy encryption technologies and advanced perimeter controls.
Most 3000s have a perimeter to defend, if nothing else. Keeping a system useful means putting it on a network, and any outside-facing network is going to require defense. If numbers from an outside source can be useful in getting funded for this kind of defense, Ponemon summed up the take-aways.
- Cyber crimes are costly. We found that the average annualized cost of cyber crime for 234 organizations in our study is $7.2 million per year, with a range of $375,387 to $58 million. This represents an increase in cost of 30 percent from the consolidated global results of last year’s cyber cost study.
- Cyber attacks have become common occurrences. The companies in our study experienced 343 successful attacks per week and 1.4 successful attacks per company per week. This represents an increase of 20 percent from last year’s successful attack experience. Last year’s study reported 262 successful attacks on average per week.
- The most costly cyber crimes are those caused by malicious insiders, denial of service and web-based attacks. Mitigation of such attacks requires enabling technologies such as SIEM, intrusion prevention systems, application security testing and enterprise governance, risk management and compliance (GRC) solutions.
Many smaller companies use HP 3000s, and Ponemon's research shows that this size of organization seems to be most susceptible to the kind of attack rarely seen on an MPE/iX system.
Smaller organizations (below the median of enterprise seats) experience a higher proportion of cyber crime costs relating to viruses, worms, trojans, phishing, malware and botnets. In contrast, larger organizations (above the median) experience a higher proportion of costs relating to denial of services, malicious insiders, web-based attacks, stolen devices and malicious code.
October 14, 2013
Support paywall can seem to hide manuals
We're investigating another point of confusion between HP's MPE/iX and 3000 manuals and the 3000 community. Donna Hofmeister, one of the former OpenMPE directors who heard HP's promise to keep these manuals available to the general public, emailed us this report.
It appears that HP has cut off public access to the MPE manuals. If you use HP's link through its Business Support Center, and go thru a couple of clicks... you'll eventually be asked for support credentials.
In my opinion, this shouldn't be the case for MPE manuals (since, after all, who has HP's MPE support anyhow?). HP agreed to continue to allow access to the MPE things (including patches) when they vendor was negotiating with OpenMPE.
Hofmeister noted that the patches are still available for free. The good news is that the 3000 community has been compiling the manuals outside HP's servers, just to ensure the vendor kept its promise of open access to 3000 documentation. And there is a more concealed path into the manuals today. Just not through the front door Hofmeister was using.
Straight to the point, things are changing in the HP support operations and its access for users. A support contract might be required, in HP's confusion over the 3000's place on the website, if you head in through the wrong address. Or read a recent HP email.Last week the HP enterprise computer users received an email that proclaimed the patches and other support materials for servers like the Integrity line and its operating environments would only be available to users who had a current support contract with HP. Hewlett-Packard doesn't support the 3000 or MPE anymore -- a fact the vendor reminded users about constantly in the months leading to the end of support in December, 2010.
So there's no way to pay for support that would deliver access to MPE materials. Which is why HP told OpenMPE and the 3000 community the access would be free.
Independent support companies, third parties and adept managers have been squirreling away the manuals for years by now. In addition to a core set of manuals at yet another HP website address, linked to by Applied Technologies via a direct link off mpe-opensource.org, MM Support has a wide array of these manuals for download. MM Support, a group of 3000 veterans who created the MM/3000 ERP software, says it's hosting these documents, organized by function as well as alphabetically, because of "the great love we have for the HP 3000."
The following list is a beginning. We have laid the HP 3000 MPE Manuals out in a manner that is friendly to use. We will try and have both HTML and PDF format for the HP3000 Manuals.
As we've noted, MPE patches seem to be available without support credentials. Hofmeister says you need a lot of patience. You're likely to get asked about the HP 3000 latex printer a few times.
I'm still sending people to HP to get patches. Last one was maybe a month ago. The process seems to work, although I always caution them to be prepared to be patient. Getting through the front-line call handlers can be difficult :-(
I suspect many people downloaded all the patches while the FTP site was still available. But in my opinion, they'd be well advised to at least be very careful about who they give these patches to, since HP seems to be in a litigious mood.
October 11, 2013
The Comment-y Stylings of Tim O'Neill
Comment sections of blogs are usually tar pits of abusive and misdirected retorts. I feel lucky that comments on the Newswire's blog have been otherwise, for the most part. On many tech blogs the comments that follow a story devolve at lightning pace into rants about the NSA, partisan politics, the insulting disappointments of Windows/Apple/Google, or the zen koan of climate change.
Tim O'Neill has lifted up the reputation of commenting to an enabling art. The manager of a 3000 system in Maryland, he's become prolific in his messages that echo or take a counterpoint to the stories we run here. His comment count is running at 15 over just the past five months. For our unique but modest-sized outpost of 3000 lore and learning, that's a lot. He's got a comment for almost one in every five stories.
HP's actions of 12 years ago are still a sore point with some 3000 managers. Count O'Neill among them. We ran a story yesterday about HP's best case scenario for 2014: it will lose sales more slowly than this year. Some new products will get R&D focus. Pockets of sales growth will pop up. Overall, less revenue, for yet another year.
O'Neill shot off a comment within an hour of our story.
This does not sound too hopeful, if the best they can promise is slowing the rate of revenue decline while at the same time spending $3B on R&D. At the same time, they have essentially no cutting-edge mobile products (and no WebOS,) a stagnant flagship OS (HP-UX, no new releases in about a decade) a second flagship OS sentenced to death (OpenVMS -- HP finally kills the last of the DEC that they hated for decades) and shuttered sales and support offices (relying on VARs and the Web for sales, instead of interpersonal interaction.)
O'Neill never fails to note that a retained 3000 business would be helping HP, even today. "Meanwhile, the long-ago-jilted MPE lives on, ancient LaserJets continue to crank out print jobs and make money for toner refillers (I still have LJ 2000 and 4000 series printer in service,) and digital signal generators (HP, not Agilent) still generate signals. They do still make nice new printers. Maybe they should buy Blackberry to get into the smartphone business."
It's great to have a chorus behind you when reporting on one 3000 news item after another. It's even better when there's a consistently different-sounding voice on webpages. If there was an Andy Rooney position on the 3000 Newswire's stable of contributors, O'Neill could fill that post.When my story this week noted that a few N-Class servers, to be mothballed at HP's datacenter next week, would be available for purchase, O'Neill took another tack.
Customers should not be buying cast-off 3000s if they can help it. Instead, they should be ramping up for the future and buying Stromasys-ready hardware.
O'Neill has left fat pitches for other readers to comment upon. "I wonder if anybody still has an HP 150?" Or "Does anybody remember the name of the company that was marketing a wireless 3000 terminal in the late 1980s?" Then there are these comments below, in response to articles about the HP Computer Museum needing older computers, or a new iPad app that gives the 3000 user a wireless terminal for apps or console work.
Well I think the Terminal-on-a-Tablet is a great idea, and gosh we could have really used that and a wireless link 10 years ago when we needed to constantly interact with MPE. I can see great usefulness for people who are using MPE actively, e.g for inventory. It gives one more reason to stay with MPE and one more reason to buy Stromasys boxes on which to run MPE.
Gosh, I wonder if anyone still has a HP 150? It was coolest thing! But people here only used it for a terminal!
O'Neill can also find a silver lining in a report about two 3000 experts replacing themselves (due to age) and moving off an app built long ago.
This article amply demonstrates that: 1) MPE is extremely good at OLTP and business management processes, and is not easily replaced 2) MPE is very cost-effective (e.g. this company had to increase staff after MPE, and 3) "Migration" is incorrect terminology, and vendors made a lot of money, once, by doing it. Now, "if only" a consortium such as a modern-day OpenMPE or OSF could be created, to take command!
Not too many readers remember, or can put into context, the aims of the OSF (the Open Software Foundation) as they related to the HP 3000. OSF was about putting common software platforms in place across Unix servers from many vendors. HP did hope that Posix on MPE would help port some software to the 3000. Both projects fell short of such hopes. O'Neill is hopeful in a way I've rarely seen about the prospects for a rebound of MPE.
I say that with the advent of Stromasys and the interest from application developers who wrote for the HP 3000, there is now the opportunity for the community to form a company to begin marketing MPE/iX. The world is ready for a stable, secure, alternative to the out-of-control Linuxes and the costly well-known operating systems.
He has observations on the differences in vendors serving his company, sparked by news that HP's taken a dive out of the Dow 30.
"Dive" is being kind. They were thrown out. As an example of their inablity to market themselves, the following is illustrative. Next week Dell Computer will host a technical day at our facility. This will be the second such day in the past six months. Customers go and hear the latest. HP has equal opportunity to rent the space, purvey the lunch, and pitch their wares to willing listeners. HP does not do it. Too few sales people spread too thin?
It's been nice to be noticed, but as you can see from the comment string off our front page, not all of it has been complimentary. Recent reporting on OpenMPE got rapped by a pair of principals who were onstage at the end of the organization's activity. But the rarest of things, outright praise for memories, appeared after I wrote about what we all miss from the August HP conferences of our past years.
It is poignant and evocative, meaning if I were an emotional person, it would have brought me to tears. I actually attended the [August] 1996 show in Anaheim! There I had the privilege of speaking with Fred White, who predicted the demise of MPE while on the sidewalk outside the convention center, as well as the subsequent demise of HP-UX. (When was the last new release of HP-UX? Years ago, right?) You wrote that Interex (later HP World) always left people "invigorated, rededicated or just stirred up." True. "Rededicated" rhymes with "medicated" which, nowadays, we HP 3000 people feel as though we need to be! It will be interesting to see how Stromasys emulation will work with VMWare, of which we are heavy users.
I invite you to write a comment for your own pleasure and our information. Whether you shoot this messenger or toss kudos, it will make its way into our shared story.
October 10, 2013
HP hopes for slower sales declines in 2014
In a typical response to the above news, investors bought in on Hewlett-Packard's vision of the future yesterday. Market analysts who advise the pension plans -- and the rest of the 75 percent of institutional-owners of HP shares -- found this lump of non-dire news under HP's carpet. CEO Meg Whitman said they predicted there would be 1 percent more profit than the analysts' predictions. One estimate bested another by a trace amount, and so hope rose up among shareholders.
None of this has happened yet; even HP's fiscal 2013 still has three weeks left to play out, let alone the realities of 2014. "Pockets" of growth in HP's sales have been promised, although the company cannot say where those pockets will appear. They might be in tablets, where HP could manage revenue growth with sales that become measurable. Or the growth might occur in enterprise servers and software, a prospect with much longer odds.
"Stabilizing revenue declines" are the brightest outlook HP can promise for the year to come. That HP had to promise continuing declines shows how tough its IT sales market has become. People who were buying laptops for business are now investing in tablets or working via smartphones, both of which are more mobile. HP's offerings in both segments are years behind market leaders, echoes of cheaper solutions, or invisible (in the case of the phones).
Mobile computing is one of the many sectors of computing products where HP's got big issues to resolve. One analyst said after yesterday's meet that it wouldn't be a great investment to buy HP stock, given the "growth challenges the company is facing in nearly every product category." Investment in buying HP's products is another matter, but it's the one which determines that growth challenge.
HP's fiscal numbers for its latest quarter won't surface for more than a month. But Whitman's cheerleading came during a two-day meeting with those analysts. HP earned a $2 share bump on a forecast that put its 2014 profits 3 cents a share higher than a $3.62 forecast. Whitman said HP will focus on new products and services next year -- a category that may not include HP's Unix, its Integrity-based servers, or other solutions from the combined enterprise unit that has been producing steady HP 3000 platform replacements.
Whitman said HP is recommitted to smarter innovation, with R&D spending expected to be in excess of $3 billion for the fiscal year that ends in three weeks.
“While there is a lot more work to be done, I am confident about the progress we are making,” said Whitman. “We’re producing tangible results, strengthening our balance sheet and delivering innovative products across all our key segments. We are implementing the changes needed to support our multi-year turnaround journey, reaffirm HP’s leadership position, and create enduring value for customers as well as for our shareholders”
HP says the core of its strategy for 2014 is focused on “providing unique technology solutions for the ‘New Style of IT.’ "
October 09, 2013
HP completes 3000 transition, 12 years later
One week from today, according to our sources in the HP IT community, the last four HP 3000s will go off the Hewlett-Packard production grid. The shutdown is scheduled to take place on Oct. 16, which will put it just a few weeks shy of 12 years after HP said it was ending its HP 3000 business.
There can be many reasons why a transition away from the 3000 could take more than a decade. The most obvious one is that it doesn't make business sense to turn off an application that's still doing yeoman service. We don't know if that's the case with these 3000s and their applications.
But these 3000s run in the HP corporate datacenter based in Austin, Texas, the hometown of the 3000 Newswire. It doesn't take much search to learn that this datacenter is more than 20,000 square feet of office space that was once an outpost of Tandem Computer. HP acquired Tandem's business when it purchased Compaq. Years after HP swallowed its biggest acquisition, these 3000s were being managed into a new datacenter -- one of six targeted to consolidate the 85 HP datacenters.
Even with an opportunity to take 3000s offline in a datacenter reorganization, MPE applications prevailed. That datacenter reorg started in 2006."The last 4 internal HP 3000s located at the HP Austin (Old Tandem) datacenter will go lights-out October 16th," said our source. "No special events are planned, since no one within HP understands the significance anymore."
At one point in the 3000's not-too-distant history -- okay, less than 20 years back -- more than 600 3000s were driving company operations. In 1996 we reported that every sales transaction flowed through the HEART application, hosted on 3000s. HEART was replaced by SAP software early in the 21st Century, a switchover that had enough bumps to draw notice in HP's own investor reports at the time.
The Austin datacenter, which can be managed remotely, is actually two physical sites with mirroring capability. One is in the Tandem facility, and the other is at a site 15 miles south which once operated the Freescale (nee Motorola) wafer fabrication operations. We're just guessing here, but it's possible those 3000s going lights-out are replicated in some way at the Freescale building.
If there remains a value policy at HP that would retain MPE apps for a dozen years, it's a good bet these N-Class boxes are going onto the used hardware market soon. The vendor has proven they're a good investment -- having used them for nearly three years beyond its own legendary "end of life" deadline for the server.
October 07, 2013
Patches remain a revenue producer at HP
HP issued a reminder for the HP 3000 users today that the computer remains special in a significant, cost-saving way. Several years ago, the customers using HP's enterprise computers found that free patches had ceased to be a goodwill item. You had to pay to patch, HP said. But since the MPE/iX patches were written for a discontinued line, HP had no support mechanism to charge for them.
HP-UX, OpenVMS and Tru64 (Digital's Unix) customers are not so fortunate. In an email from today:
HP has made significant investments in its intellectual capital to provide the best value and experience for our customers. We continue to offer a differentiated customer experience with our comprehensive support portfolio. HP, as an industry leader, is well positioned to provide reliable support services across the globe with proprietary tools, HP trained engineers, and genuine certified HP parts. Only HP customers and authorized channel partners may download and use support materials.
It's not the first time HP has told its enterprise customers that vendor support is not an optional part of their ownership budget. Hewlett-Packard's labs are still turning out patches for it Unix and VMS systems. Patches are free for many other computer systems, but enterprise servers are becoming an exception.
Beginning October 2013, Hewlett-Packard Company will change the way operating system patches on HP-UX, OpenVMS and Tru64 are accessed. Patches for these operating systems will only be accessible on HP Support Center to customers with an active support agreement linked to their HP Support Center User ID and for the specific products being updated. We encourage you to review your current support coverage to ensure you have the appropriate coverage to maintain uninterrupted patch access for these operating systems.
The support agreement must have a relevant software product number belonging to one of the following product series:
HP-UX Operating Systems
HP OpenVMS Operating Systems
Tru64 UNIX Operating Systems
In addition, the support agreement must have one of the following Software Update or Previous Version Support offers:
HP Software Updates Service
HP License Subscription Service
HP SW Media and Documentation Updates Service
PVS with sustaining engineering
PVS without sustaining engineering
MPS with sustaining engineering
MPS without sustaining engineering
However, IT managers for 3000s might consider themselves lucky to have a guide from an independent support provider, one to be able to locate the MPE/iX patches that remain a free service for 3000 sites. Plenty has moved around on HP's support servers, from manuals to so much more.
October 03, 2013
HP's missing notes as Jazz plays on for 3000
Information that HP licensed for its Jazz support server lives on at two North American HP 3000 vendor sites. While items like white papers and instructions remain intact at Freshe Legacy (formerly Speedware) and Client Systems, the links at Hewlett-Packard references for the 3000 are playing like they're off-key notes.
Jazz is the accepted name for a collection of papers, downloads and software instructions first created by Jerri Ann Smith in the HP 3000 labs. Nicknamed after her initials JAS, Jazz grew full of free help during the 1990s as the vendor worked to sustain its MPE business and service its customers.
When HP closed down the labs that maintained Jazz, it licensed the use of these materials to Fresche and to Client Systems. Much of the material remains useful for the 3000 manager who's sustaining a server in homesteading or pre-migration missions. But a click on many links to HP drives users to a Hewlett-Packard technical documentation website where the 3000 knowledge is buried deeper than all but the most patient or seasoned owners can uncover.
Even a request to establish an HP Passport account, which might yield more information, generates an Internal Server Error from Hewlett-Packard today. Everybody's website can have this kind of problem from time to time, but standards for the maker and caretaker of an operating system should be higher than nearly everybody.At the Fresche Legacy site -- known as hpmigrations.com -- a white paper on a Posix scanner is among the software listed.
A Posix scanner? It's a toolkit "that is useful to analyze an application you may want to port to the HP3000. In two steps, external functions called by the code are collected and then reduced into a report showing which functions are or are not available on MPE/iX."
Perhaps of more use to those who aren't porting to MPE is the VT3K software, which links a 3000 with a server HP was calling an HP 9000. That 9000 should be running HP-UX 10.20, a genuinely antique release of HP's Unix.
VT3K allows you to establish a Virtual Terminal connection from a HP9000 to a HP3000. This version of VT3K is being made available to those HP3000 users that are planning on using HP OpenView IT/Operations to manage their HP3000 systems. This version of VT3K is supported on HP-UX servers running 10.20. VT3K is required in order to install the IT/Operations MPE agent on the HP3000.
Fresche isn't responsible for the condition of the links to HP's documentation on the 3000 however, those listed under Jazz at its server. www.docs.hp.com/mpeix/all returns nothing but 404 Not Found connections. The whereabouts of MPE manuals at HP sites is a treasure hunt with no apparent prize at the moment.
But at the Jazz sites you can find SETDATE, which alters the date in a current session under MPE/iX. The sell-by date for HP's links is in such a state that a support company guide might be the only way to uncover what used to be open and hosted by the 3000's creator. Any link that can deliver a document from the licensed independent companies is operative. But a wall of inscrutable web links appears in any reference to HP's own websites.
September 23, 2013
Tuning Out HP News by Labeling it Noise
When something fresh or different enters your IT landscape, it's a good business practice to make time to understand it. A new software application, a different way of defining your networks, the scorecard on your vendor's turnaround. Those first two items are easier to analyze than the third, but a vendor's business news is not noise.
Few communities understand this listening better than the customers who own HP 3000s and run MPE. Their status might be homesteading, or migrating, or homesteading until a migration is possible. But when Hewlett-Packard ended its futures in the 3000 market, it did so because of what it called trouble in the "ecosystem." That's not a jungle of plants and animals outside HP's corporate HQ. The ecosystem is the collection of companies doing business for a platform's users. HP didn't like the look of its 3000 ecosystem. It couldn't do anything more about it, so the vendor pulled up stakes and closed its lab.
The world-rocking difference in that case was HP's business decision, not a technical shortfall. That vendor didn't tick off the missing elements of software (it had skipped out on doing a 64-bit MPE) or the hardware (slim and cheaper servers for Unix customers, but not MPE users). HP talked about the rest of the world's businesses and what it planned to do about connecting with them. It was consistent about choice: Unix, Windows, and other things not crafted by HP.
That's news, but in some quarters HP's business conditions are being labeled noise. The Chief Marketing Officer for the Connect user group Nina Buik not only believes that "the media earns its keep by making noise," she advising members to tune out news like HP's departure from the Dow Jones Industrials. Not important, she wrote this month. The drop from the Dow is symbolic, but it won't change things overnight. Few customers pick a vendor on the basis of its Dow membership. Investors do, and that impacts working capital and profits and growth funding. Dow is interesting, but Buik calls it noise compared to the HP message about becoming monolithic.
That's not really news, except in the latest five-year plan to execute it. Hewlett-Packard has been trying to act as a single company since the moment it started selling PCs in the 1980s. Its quest to monolithic futures is as constant as the direction of rain. Rain falls downward, as it always has.
News and noise can be confused, or just overlooked on purpose. If you don't want to include your vendor's business condition, you might be surprised -- like some of HP's OpenVMS users were -- when the futures run out. You'd want to hear the warnings about that, wouldn't you?Ah, but it's so much simpler, more sweeping to say that since HP's turnaround message is consistent, it's a conversation, instead of noise. Buik shared that view on the user group's website
Of course news about HP, its customers and partners are of special interest to me, because it may or may not be something that impacts our members... noise or conversation?
Recently, I read that the Dow dropped HP and replaced it with financial giant, Visa. While it was newsworthy, I put it in the noise bucket. HP’s Meg Whitman is very focused on her plan to turn the company around and back into the world’s leader of enterprise technology and innovation. Now THAT is a conversation! Adding to that conversation is the notion of ONE HP. I’ve heard this a lot over the past year and I’m looking forward to seeing the monolith come together and sell to customers in a unified, efficient and strategic manner. Otherwise ONE HP becomes noise. After all, there is only ONE HP!
There are many HPs. Some of them require a lot of overhead and generate a thick forest of partners, but scant profits. Another HP is focused on changes in IT shops -- HP works to earn profits as a provider of change services. Then there's the HP that created enterprise servers in focused markets. It's become a very small HP. Some of those markets have fallen from HP's turnaround plan. Others will follow. You don't turn things around by doing the same things, unless those things are profitable and offer growth.
What’s more important is the fact that the first 18 months at the helm, her focused message about who HP is its financial strength, its core focus areas, mutual trust, and the value of the enterprise ecosystem, consistent and crystal clear. Now that’s a conversation.
Those are only conversations when a vendor is responsive to your business needs, flexible about cost of ownership and capital expense, and ready to sustain value in a customer's investment. You'll read about stakeholders sitting with IT and talking about what to buy or build to grow a business. That's important, but those are also talks in private. A user group can do good work when it encourages members to share the best practices from such talks.
Failing that opportunity, you hope to get smarter by finding new information about such practices elsewhere. You'd like the practices to be sized for your organization, too. HP is still in the business of telling the world about its biggest deals, as if it that makes them a better vendor for any size of customer. Sometimes there's news about technology coming from the vendor's marketing group. Just listen to HP's news.
"HP today unveiled a suite of stylish consumer PCs, tablets and services including the world’s first notebook PC with integrated Leap Motion technology." Now, LeapMotion is a gesture-driven technology that's a candidate for replacing some trackpad functions. Noise or news? As always, it depends on whatever's important to the business units which you serve as an IT pro.
You can decide if part of your IT planning includes your vendor's business reports. If you'd like to hear what HP says in specific about its business plans, anyone can access a webpage to listen every 90 days to CEO Meg Whitman. She answers questions, live. It's recorded for later listening, too. It's the only regular conversation you'll hear from HP's leader. It happens because business analysts demand answers, because they want to process and parse new developments. And Whitman's recent answers have included notes about how its Unix servers have stopped being a growth business. The whole BCS unit has stopped growing.
The last time HP took notice of a server business and its growth forecasts, it was the 3000's. This summer the OpenVMS departure clock began to tick. If HP's among your preferred vendors, don't kid yourself. Business matters take a front seat in your vendor's plans. People don't make decisions about IT based entirely on a turnaround CEO's message, no matter how consistent. People using HP servers were once called programmer analysts. They might not program much any more, but they still need to analyze. You need information that's current to do that. A consistent message is important to a turnaround mantra, but probably doesn't keep pace with change.
September 11, 2013
HP dives out of the Dow Jones average
It was a pretty good run for awhile -- 16 years of Hewlett-Packard stock being part of the greatest run-up in Wall Street securities history. But this week the Dow Jones organization announced the biggest shake-up in the average in a decade, removing Hewlett-Packard's shares. The stock lost half of its value, then regained nearly all of it, in a turbulent 18 months that ushered it out of the best-known average.
The change takes effect with the close of trading on Sept. 20, and was "prompted by the low stock price of the companies slated for removal, and the Index Committee's desire to diversify the sector and industry group representation of the index," according to S&P Dow Jones Indices LLC, the company that oversees the Dow. Alcoa Aluminum and Bank of America are also being removed.
HP's shares are not trading much lower than in 1997 when it joined the average. In that year, HP traded at $25.75 a share, just $3 higher than today's price. It became only the second computing company to join the 1997 Dow; Johnson & Johnson, Travelers Group and WalMart were added to the index that year as well. All but HP remain part of the index of international business. The Dow average was about 6700 when HP was added. Today it's above 15,000.
The HP of 1997 had no significant Internet presence, playing catch-up to Sun. Hewlett-Packard also was scurrying to adopt Windows as an enterprise solution, having gambled heavy on Unix through the 1990s instead. That year's Hewlett-Packard also sold HP 3000 Series 9x9 servers, a solution that was just gaining its first open source software programs as well as dropping the Classic CISC-based servers that ran MPE V. HP was a $43 billion company that year with a workforce of 121,000.
But many things have changed along with HP's overall futures and fortunes. In the summer of 1997, 3000 division manager Harry Sterling, in just his first full year on the job, announced that the HP 3000 would be gaining a 64-bit MPE, with designs aimed at using the newest HP chips.Unix came in for specific mention in HP's annual report of 1997, as did Windows NT and a splash about running Barnes & Noble's website with HP gear. (Amazon, still not making a profit, was driven by Linux and Sun systems.) But while the HP of that year pointed to its commodity-grade environments during an era when an OS meant as much as application availability, the HP 3000's future was painted in bright shades at an HP World conference on a steamy Navy Pier in Chicago.
"The growth of the HP 3000 is secure well into the 21st century," Sterling said. "Our engineers are working on a new generation of HP 3000s based on the 64-bit PA-8200 chip." HP said that a new 200MHz, 8200-based system would arrive in the lineup first as a midrange system.
More importantly, HP said it re-evaluated its 1996 decision to wait on delivering a 64-bit implementation of MPE/iX. The new MPE version will "fully exploit the power of the PA-8000 processors. After better understanding your needs, our completed investigations have convinced me that we need to move forward on this front," Sterling said.
HP stalled on its 64-bit MPE/iX program in the years that followed, delivering its final roadmap with a 3000 future on it during an HP World conference in Chicago again, four years later.
Visa International is replacing HP in the Dow Average, the Index Committee reports. Also joining the 30 companies in the average: Nike and Goldman Sachs. The index is designed to represent a broad spectrum of businesses and has included former companies such as ATT and GM. The biggest shift in its membership since the HP removal came in 2004, when "Too Big to Fail" AIG, Pfizer and Verizon replaced ATT, Kodak and International Paper. AIG was dropped in 2008.
Computing firms in the Dow are now represented by IBM, Microsoft and Intel. The latter two vendors joined the average just two years after HP arrived.
September 06, 2013
History tells us to mind the futures gap
Hewlett-Packard's Millenial Version (2001.0) kicked out the 3000 a dozen summers ago. But your community still talks about that breakup, something like the girlfriend a fellow lost after she was so close that she knew your team's football players. (There's an allusion that might play on both sides of the Atlantic, now that our sports called football are both apace this weekend.) It's a worthy subject. A gap between futures talks and vendor reality must always be considered. This is the season of 2014's planning, after all.
The latest discussion about 2001 came out of a corner of the community's online outposts. Over in an exclusive sector, people talked about whether HP 2001.0 had ever violated regulations when it went to that summer's HP World show, talking up 3000 futures to anybody within the sound of the HP voices of Dave Snow and Winston Prather.
Timeline: Chicago hosts that summer's show in late August. All seems well on the slides and futures talks. Two and a half months later, the big Acme safe (Warner Brothers cartoon-style) gets dropped on the heads of users, managers and vendors everywhere. Was Carly Fionia's HP-Invent fibbing about the 3000's futures?
This week the chatter amounts to just speculations, unless an HP manager (that might be former GM Prather, or someone higher up) wants to reveal the internals. Yup, Winston's still at HP.
But I may as well concoct a scenario that might permit HP to make its presentations that summer and not break the rules. In this tale, HP hopes there's a lot of revenue growth coming soon for the 3000. Either that, or it's gonna go away. Fiorina was well-known for cracking the whip on revenue growth.
So after July meetings with big customers, here comes that August HP World conference. At the time, there's no lack of verbal assurances about 3000 futures from HP. Things in writing, or on a slide, are a lot more fuzzy. There's no date-certain about Itanium for MPE at that meeting in Chicago, either. One VAR I interviewed about the meeting said, "That's when we knew the writing was on the wall" about MPE. It wasn't going forward, he said.
So perhaps HP was hoping against hope they'd get a balloon-full of orders, or something to lift revenue growth. Mind you, the year's sales that led up to the 2001 meeting were plenty encouraging and on the rise -- this despite having nothing to sell but a behind-schedule refresh of the 3000 lineup. The refresh yielded A-Class and N-Class servers, but shipping only at mid-2001. Yeah, right around that crucial summer.
Y2K had held the customer base in place. Something shipping right away as an upgrade, a computer which used a more modern PCI bus and had a nice performance boost -- well, it might have netted sales to satisfy the "it's growing or it's going" execs inside HP. I leave it an exercise to the reader to remember which HP manager was driving 3000 R&D when N-Class systems were being developed. (Hint: I've mentioned the name more than once already.)
As I said, it's conjecture until someone who was inside those planning meetings, responding to CEO-level directives, opens up. I will probably live to see the tale told. But I'm only 56, and it's only been 12 years this summer since those meetings.
Some vendors believe that a shift away from HP-crafted environments could be regarded as inevitable. Considering how the rest of the OS-centric HP enterprise business has fared since then, it's possible that for Hewlett-Packard, the company's misreading of 3000 durability was the only thing that made MPE the canary in HP's mineshaft of enterprise server business.
[Ref: Canary in the mineshaft: a caged bird carried down to warn miners of a leak of dangerous gas. If the bird keeled over, the miners left the tunnels immediately. Gas = new go-go growth demands from HP business. See: Merger with Compaq.]
Some of the veterans in our community believe that those 3000 futures decisions were being made on the basis of personal growth. Career growth, that is. Rather than keep the faith in futures of the 3000, some were giving their HP career more priority. Alas, at last count, HP has released-retired-fired more than 80,000 employees since that summer. So much for making HP careerism a priority.
The veterans acknowledge there's no graceful way to pre-announce that a product is going away. Many people got 30 days' warning, pre-November. I don't know about SEC regulations, but the 3000 business was never called out in any quarterlies. You could hardly find the Business Critical Systems numbers in statements circa 2001. There was a lot less public information, and certainly no webcast analyst presentations, as there are today.
Internally to HP, CSY was a line of business. I am imagining that the public trading rules regarding reports are executed this way: SEC regulations would not be disturbed if HP said something different in Chicago, 2001 besides, "the future looks great." It's been HP's habit, however, to say everything's great in public, until they make an announcement like the one in Las Vegas this June about OpenVMS.
The difference: HP had the stones to talk about OpenVMS going away during its annual conference this year. And now, during this month that's just begun, HP will face the music from the installed base at VMS Boot Camp. I recall the timing with the 3000 was quite different. First, announce the 3000 shutdown just before a big holiday period, when IT budgets for 2002 were already set. Then, not face a big customer conference for another 10 months. HP World LA was rowdy, but by then the customers had time to cool off. Nobody was migrating, however. Not in September of 2002.
August 23, 2013
Rocky HP Q3 triggers replacement reorg
Hewlett-Packard has announced another skid in its fortunes for the servers designed to replace HP 3000s. This time around, the results were so disappointing that the Enterprise business unit had its Executive VP removed from the job.
It's not that the numbers for this period were out of line with the last eight quarters. (Details above) But the malaise of the sales at Business Critical Systems -- where the Integrity servers have been losing revenue and profit -- has spread to the sales of the ProLiant systems as well. BCS, which still gets its own baggage to carry in the HP quarterly reports, dropped another 26 percent of sales versus 2012's Q3.
How small has BCS become? It's a question which can be answered at last. HP reported that sales of the Integrity systems' unit represented 4 percent of the total $6.8 billion of the Enterprise group. That's $272 million in sales of HP-UX, NonStop, and OpenVMS servers and related peripherals for a 3-month period. Less than 1 percent of HP's sales, or a run rate of just over $1 billion a year. Except that it's been running downhill since 2011, and Dave Donatelli was all but fired for the results.
HP's CEO Meg Whitman reported that Donatelli -- who came to HP in a contested job change from EMC -- will be "on special assignment," instead of running the futures and fortunes of HP's Enterprise servers. The group includes Industry Standard Xeon-based ProLiants. The whole unit dropped another $600 million in sales during Q3. Like so many of the dropping units on the HP report, the group was listed as working in a "tough compare" to the 2012 business.
Which would make for a good explanation, until you remember HP reported a record loss for last year's Q3. Analysts said after the call that the HP results show, as Mad Money's Jim Cramer brayed, "HP needs three things: new product, worldwide growth and a lot of luck."The only part of the HP third quarter that didn't slip was the Software group. No growth, but no decline in sales, either. All of the declining -- from the steep 26 percent at BCS, to the smallest of 4 percent in Printing --was against the Q3 of 2012. While sales were off by 8 percent company-wide, HP reported a total of $1.7 billion in profits overall after it took its writedowns and amortizations. The Enterprise Group, home to HP Servers, still contributed $1 billion to that total profit. The Enterprise profits dropped 20 percent in real dollars from last year, however.
The company has been maintaining its overall profitability by shaving down costs. Whitman, like her predecessor Mark Hurd, calls this becoming more efficient. The solutions in the business servers unit will run to things like investment in the support of the sales force and operations. Or getting better organized in marketing and product management. Growth is supposed to come from leveraging accounts between Enterprise Services -- another slipping unit -- and Enterprise Servers group.
The slipping results didn't shake out to the bottom line of profits because of those cost savings. HP eliminated another 3,800 jobs in the period. That's a small percentage of the 22,000 it's shaved away for the last 18 months. HP still employs about 300,000 people worldwide.
The actual numbers came out early on August 22, eight hours before the explanations from Whitman and CFO Cathie Lesjak. All day the stock got sold down, losing 14 percent of its value and driving down the Dow by five points all by itself. There was no bounceback during the trading day that followed, which is unusual. A Dow Jones company that takes a swoon like this often gets bought up in the aftermath at the lower prices. HPQ shares recovered just 18 cents.
That might be due to the adjustment of analyst expectations. While HP might have avoided a nose-dive by beating profit estimates, it's become "The Incredible Shrinking Company" (Seeking Alpha) or "headed for an abyss" (ValueWalk). At MarketWatch, John Shinal wrote, "Far from engineering a turnaround, Whitman is overseeing what looks more and more like a voyage to the bottom of the sea." One analyst house shifted its advice from "hold" to "sell" after the report's numbers came out.
Customers care about more the numbers in pricing, however. The forecasts of recovery are often left to business journalists, analysts, and fund managers to fret over. At the Motley Fool, author Anders Bylund noted that "HP never resorted to the ultimate panic strategy of deep discounts in the hunt for revenue targets. Product prices remained firm." That means that despite the loss of business, HP didn't lower pricing for customers and prospects. The stock has "just about matched the Dow's one-year returns." HP's got the advantage of rebounding off an $11.65 nadir last fall. Anything in the $20s seems better.
However, a computer supplier needs to be on a mission to do more than protect its share price and return cash to investors. HP's biggest number on its own infographic touted $283 million returned to shareholders. That counts share buybacks as well as dividends. The fine print for Q3: HP curtailed its share buyback program for "material, non-public information that prevented us from [repurchasing stock]." Nobody asked what that meant during a one-hour analyst call, so it must not be important to financial experts.
The fine print on the infographic was reserved for the percentage in lost sales.
Whitman said more than once that she's satisfied with the progress of what she calls a five-year turnaround project. "We have re-ignited innovation at HP," she said. Then she allowed that more acquisitions, which Whitman halted at first, would have to help spark new products. "We’re very focused, but acquisitions are going to have to be a part of this turnaround," she told analysts in her call. (You can listen for yourself at HP's investor website. Full numbers are at the main page of that site, too.)
Later on, Whitman said that "HP is the product of many acquisitions," going back to the Compaq purchase that triggered the HP 3000 pullout. She added that not all of the acquisitions have been integrated fully.
"We have more work to do," she said. While noting that HP's in a happy place for cash: paying off a $1.2 billion note, buying stock, paying dividends -- Whitman said that an overall increase in sales for 2013 wouldn't be happening. Pockets of the company will see sales increases.
Which pockets increase might have an effect on the fortunes of futures for some products. Whitman said HP's got three segments of businesses, and its "heavily weighted now toward declining businesses."