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Itanium Chips Into Its Second Decade

That Sound You Just Heard, Post-Hurd

Guest Editorial

By Brian Edminster

In truth, "the sound you just heard" in HP's CloudSystem rollout this week was HP realizing that being in a commodity market isn't where they want to be -- because that inevitably results in a price-based (and therefore profit margin) race to the bottom. My only question: what took them so darn long to figure that out?

Over the years that included the reign of Mark Hurd and Carly Fiorina before him, we saw that race in decreasing quality of hardware, decreasing quality of support services, increasing reliance on 'outside sources' for both operating systems and applications, and increasing occurrences of having to purchase their 'innovation' from outside companies. I hesitate to even mention the apparent decreasing quality of senior management's ethics.

The only problem with this model is when (in reality) you're only competing on price, there will always be someone willing to operate with a smaller margin. The larger the company, the harder it is to operate on razor-thin margins that are ever-decreasing -- especially in a down economy. For a large company, it's just too hard to be nimble enough in such an environment to remain competitive. Even IBM had a hard time teaching the elephant how to tap-dance.

This commodity approach worked to some degree in the early days -- when HP could cash in on its historical reputation for making bullet-proof systems that were well-integrated like the HP 3000. Unfortunately, as they continued down that commodity hardware path, HP would end up no different than any other hardware vendor, and were being chosen only on price. 

I believe HP saw the writing on the wall and realized that soon enough, Linux-based hardware would have eroded any difference in 'value added' for their HP-UX based systems. In short, why buy a HP-UX based system when you can get an ever-increasing level of value and capability from a Linux-based competitor? It's a shame, but I predict that Linux will do to HP-UX, what HP-UX did to MPE/iX, with regard to what server operating systems they'll support.

With the announcement of March 14th, it appears that HP is hanging nearly its entire future on a late arrival: webOS.  Against the current market leader Apple's iOS, and the closing in of runner-up Google's Android, that's a pretty audacious bet, but one that just may work. The ace-in-the-hole is HP's commitment to go from phone to tablet to laptop to desktop and even printers, all with WebOS. That allows a range of software compatibility and hardware scalability that not even Apple has achieved yet with its iOS.

The real trick -- and what will make or break this in the long run -- is availability of webOS apps.  When you are in a non-commodity market, added value is king. For these new generation OS's, that would be apps.  In order to be something more than an also-ran, HP will have to beat Apple and Google at bringing good developers to the webOS platform to build great apps. There are ways to do this, but I'm not seeing HP accomplishing it yet. It should also be interesting to see how hard it'll be to get webOS apps to talk to 3000s, when webOS devices larger than phones become available this summer and beyond.

Given that a systems provider has so little control of this last app piece of the puzzle, I sorely hope that HP isn't buying the farm, instead of just betting it.

Brian Edminster is founder of Applied Technologies, a software consulting, development and systems management company with clients in both the HP 3000 and open source environments. His company specializes in open source solutions for all platforms, including the HP 3000.