HP offers a new view of retention rate
May 2, 2006
In a story published by the Web site IT Jungle, HP's Rich Marcello is quoted about the retention rate of the company's enterprise server customers. HP, according to the article based on a press conference in Asia, believes it's retained 95 percent of the top 1,000 accounts among the AlphaServer, HP 9000 and HP 3000 customer base.
The comment came during a briefing about the future of the Integrity line at HP. No, the vendor's not announcing an Integrity end-of-life; far from it. But the matter of what to put in the next generation of Integrity servers? Of course, it's Intel's Itanium, the dual-core Montecito version that's been delayed to at least the middle of 2006. (That's a date less than two months away, so we expect a later delivery than that, which pushes the Integrity server refresh out to September. Pretty much a year from when the HP sales force said their top accounts were ready to take delivery.)
While discussing the new chipsets for these new entry-midrange and high-end Integrity boxes — sets being called "Titan" and "Arches," to accomodate the final PA-RISC generation and Montecito — Marcello explained that HP has retained 950 of its enterprise customer accounts by using "high-touch." We see a couple of important footnotes to his claim.
Marcello drew his retention set around three systems — Alpha, HP 9000 and HP 3000. HP could have retained nearly all of the HP 9000 systems without much "touch," HP code for doing a deal with extra incentives and attention. (Of course, if you're one of the lucky 1,000, you probably expect more touch already than other customers get.) Point is, so few HP 3000 sites represent HP's top 1,000 accounts that the 95 percent number has little to do with the retention rate of the 3000 community as a whole.
The other footnote: That's a retention in HP's line, meaning that PA-RISC customers become Itanium users instead of IBM or Dell customers. It's almost a "no-duh" if you're shifting from an HP 3000 to an HP 9000: buying a PA-RISC based box may not be the first choice. PA-RISC has a limited lifespan at HP; as we reported last fall, the company's new virtualization technology needs an Itanium box to deliver all its capabilities. That's only the first of several "advantages" HP will touch its customers with to retain them. Itanium, for all of the negative press around its delays and disappointments, is pretty much the only choice while staying with HP's Unix servers.
Yes, there are plenty of PA-RISC HP 9000s available in the resale market. (Used HP 3000s are available in good supply, too). But a migrating customer who's sticking with HP, to minimize change and maybe cash in on "a lot of high-touch," as Marcello was quoted? Itanium is really the only choice. After all, it's the only processor HP plans to support for HP-UX for the long term.