HP's Q1 strong; business servers, less so
HP Explains its RTU, Part Two

HP sounds off on new 3000 licenses

HP briefed us about its plan to issue Right To Use licenses about five days before the official RTU announcement. We wanted to know more than the five HP documents might tell about the first HP 3000 product to enter the Corporate Price List in more than four years. A Q&A interview was in order.

Today and tomorrow we'll share HP's answers and details about RTU licenses — a product you will never need concern yourself with, until you want to upgrade HP 3000s in your shop. And oh yes, customers are upgrading, even in the months following HP's initial deadline for leaving the market.

HP granted us a 30-minute interview on the subject, without receiving any of our questions in advance of the interview. In exchange, we have allowed HP to review and revise its answers; after all, in this Q&A feature we're let the subjects express themselves as they would like to be understood.

Their answers have been edited by us for brevity, before we submitted them for HP's revisions, but no question went unanswered. HP also supplied us in advance with the versions of those Web documents which it posted on Feb. 12. You can find them at www.hp.com/products1/evolution/e3000/products.html.

Our interview subjects were HP employees Jennie Hou, an e3000 R&D project manager with focus on the customers, partners, and business; and Ross McDonald, e3000 R&D Lab Manager.

Why introduce a Right to Use license at this point in the HP 3000’s lifespan?

McDonald: Two reasons. When purchased upgrade kits were no longer available, we realized that customers needed a way to create a valid system.

   Additionally, there seemed to be confusion in the marketplace on how customers could ensure they had valid e3000 systems. We’ve been working on it for a number of months, trying to get this out in a timely fashion.

    We’re putting a product back on the pricelist to enable this for the 3000. We’ve been winding down the 3000, so it was not expected that we would do this. We’re really doing this to accommodate customers who need to upgrade their systems.

What seems to be prompting the confusion among customers?

    Hou: We just started getting some calls from our customers, asking how to do a license upgrade.


Do you expect to authorize other third-party companies other than Client Systems to issue the RTU license?
    Hou: No, but other US resellers/brokers can obtain these licenses through Client Systems. In the US, Client Systems is the only authorized reseller that can issue the e3000 RTU license. They will perform the necessary verification steps before each license is issued. This RTU license product is available worldwide and there are other resellers in other regions.

Is there anyone else in North America who can do these upgrades?
    McDonald: In terms of modifying the stable storage of the HP e3000s?

Yes, absolutely. Who can do this?
    McDonald: The HP CEs will do the actual work. At this time we do not intend to increase the number of people who can modify stable storage.

For the customers who will upgrade, is HP assuming this RTU will apply to upgrades within their product line?
    McDonald: Yes. If customers don’t have a server to upgrade, they’ll have to go buy a system that comes with a valid license via the used market.   
    Hou: I want to stress that this license will be used in an upgrade situation, so you have to have an HP e3000 hardware system to begin with -- a system you can upgrade for a higher capability and capacity within the permissible upgrade path.

    How will you charge for this RTU license, since it’s a new product?
    Hou: The RTU license is structured in seven levels. It’s based on performance levels, from 9x8s through the N-Class. The price range will be from $4,000 for Level 1 up to $89,500 for Level 7.
    McDonald: For any upgrade, you’d subtract your current [license price] level from the RTU price. A one-way N-Class 380 is in Level 3. A 750Mhz 4-way is Level 7, so the N-Class models range from Level 3 to 7.

These levels don’t have anything to do with user-level license costs on the 9x8 and 9x9 systems, do they?
    Hou: No. The A and N-Class systems are unlimited for the number of users. They are two different things. This is a Right To Use license.

How can the customer determine how much their current license is worth, so they can calculate what HP will take off the price of the RTU? Is the worth based on the amount they paid for the license at the time they bought their system?
    Hou: No, it’s based on the new 7-level structure. When the customer calls HP or HP resellers, they can provide the customer with that pricing information. The key point is that they do not need to buy their [Fundamental Operating System] license all over again. They will pay the delta of the two different licenses.

So is there any way for the customer to know what that delta figure is before they have to call HP or an HP reseller?
    Hou: Customers know the product number is AD377A, so it’s easy to call and inquire.
    McDonald: The prices will be posted on HP’s Corporate Price List [CPL]. A document on the e3000 website describes the levels for any of the platforms you have.

Do 3000 customers have access to a CPL now?
    McDonald: No. They have to contact HP or their reseller. Also, these are list prices, so whatever purchase discount they may have will apply, and that will vary.

Let me ask again. Will HP look up what the customer paid for their license at the time of their 3000 purchase?
    McDonald: No. The system and license prices were often combined or bundled before, so we recalculated what the approximate prices would have been. So we had to figure out where the split was, and what was the MPE [portion]. We did quite a bit of analysis on trying to be fair to what the current market is, in terms of what it would cost to do this now. Then we tried to reduce it even more.
    It really doesn’t matter what you paid for it at the time. What really matters is what these level prices are now.