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November 26, 2019

Xerox HP fight copies 3000's exit saga

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Xerox has been trying to buy the part of HP left over after the vendor's split up in 2015. The latest $33.5 billion offer, rebuffed by the HP Inc. board, is going to get pushed out to the HP Inc. shareholders. "It's a better deal that you're getting now" is the message to the thousands of HPQ stock managers. Voting shares for or against a merger has a spot in the 3000's legacy.

This is also the outcome that helped cement HP's exit from the 3000 world. In 2002, HP's acquisition of Compaq got pushed out to a proxy battle. Xerox says HP is defying logic by refusing to be acquired. That's the kind of resistance HP loyalists — the HP blue, they were called — tried to muster around Bill Hewlett's son, who was an HP board member.

Without that successful buyout, HP would've had no Digital VMS customer base to court and invest in to feed a business-focused Itanium operating system. HP-UX was a lock for Integrity, to be sure. The 3000 and MPE/iX were there, ready, but just too small for HP's designs on being Number 1 in all of computing. The Compaq PCs were going to make that a reality.

However, about three years after HP rammed through the Compaq merger through a proxy battle, the spark of that deal Carly Fiorina was forced to resign as HP CEO and chairman. PC growth had not contributed to significant HP market dominance. At the same time, the health of its enterprise business began to slip ever so slightly.

Another CEO pumped up HP's sales, even while its ability to sell OpenVMS and HP-UX faltered. Enterprise computing with HP-built operating systems was in decline. HP became an all-Windows enterprise supplier when full business server sales were measured.

The juicy fruit that HP's board dangled in front of uncommitted shareholders was Compaq's roaring PC business. A combined company would be No. 1 in market share almost immediately. That was promised, anyway. The fortunes of OpenVMS seemed secure, heading into the portfolio of a technology giant that had enterprise legacy to match Digital's.

By 2016, OpenVMS was in the chute toward ex-product status at HP. The coup de gras took place this year when VMS support customers were told the future was in the hands of VMS Software, Inc. OpenVMS users, as well as the MPE customers who were the casualty in that 2002 merger, can look at Xerox and watch the conflict knowing it won't change their fates.

Those were set in motion by the last proxy battle. The juicy fruit that HP's board dangled in front of uncommitted shareholders was Compaq's roaring PC business. The fortunes of OpenVMS seemed secure, heading into the portfolio of a technology giant that had enterprise legacy to match Digital's.

MPE customers were sent down the path where Tru64, another Digital creation, sits today. Formal support ended for them. However, MPE/iX was more than a new edition of Unix. It built a community around vendors. There was no other choice once that proxy war was lost.

Mergers are a good way to see where the soul of a company resides — if there's an open fight. Of course, there wouldn't be a shadow of the old HP to fight over — printer-PC HP Inc. — if the Compaq acquisition had failed. HP might be in the position of seeing itself absorbed and erased. A new afterlife seems unlikely for a company founded on something as common as Windows and printers.

11:50 AM in History, News Outta HP | Permalink

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