News Outta HP

Hope floats today for a 3000 resurrection

As a former Catholic altar boy, I learned a lot about resurrection during Springs in the 1960s. But the headline above isn't early April Fool's blasphemy. Some 3000 users -- more than a dozen, like disciples -- believe that an emulator in their market is a reason to believe in the server's revival.

RolledrockThey're somewhat correct, but how accurate is a revival of MPE/iX, versus the hardware to host it? Stromasys has accomplished the latter miracle with Charon HPA/3000. Servers as common as bottled water are running MPE/iX today, in production environments or proving the concept that PA-RISC systems have come back from a state of doom. Some are even succeeding with untested chips from AMD, somehow, rather than the approved Intel processors.

We've just approved a comment here on our blog that invests the emulator with these regenerative powers. HP would need a revival of its spirit to start to sell proprietary servers again, but at least there's powerful spirit among a few customers. None of them are paying HP any longer for the 3000. We'll get to that in a minute, and how it affects the salvation of critical MPE/iX applications. But to that prayer:

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.

This manager doesn't want his name or company mentioned, but I assure you he's real and in charge of several HP 3000s. Third parties provide MPE and 3000 support at his site, and he runs HP's final low-end model of 3000, an A-Class. Although this is the season of miracles for hundreds of millions, marketing MPE/iX would demand a change of ownership at Hewlett-Packard. To kick-start it, people like our manager above would have to become customers of HP once more. The company took a conservative view of "customer" and "owner" five years ago this month. Nothing's changed there yet.

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HP's expert estimates Itanium's end-date

We return you to California's Santa Clara County Superior Court, where the future of Itanium and HP-UX is already in progress. HP and Oracle continued their battle over the future and value of Itanium yesterday, with each side trying to wring dollars out of their dispute over whether Itanium is finished at HP. The lawsuit's final phase addresses damages. Oracle hopes to prove HP's public and partner strategies cost them sales of Sun servers where Integrity had already lost the business.

StopwatchOracle's expert estimated the company lost $95 million in profits, working on the premise that HP lied about the future of its only HP-UX processor line. The Integrity servers have been a popular platform for Oracle's database. A lawsuit that wrapped up in September forced Oracle to continue its development for the server line. The database vendor wanted to stop enhancing Oracle for HP's platforms including HP-UX, all tied to the Itanium chip.

HP's expert Jonathan Orszag of the consulting firm Compass Lexecon had to counter by estimating the lifespan of HP's Itanium business. Orszag said the ending date for Itanium looked to him like 2020. HP would have surely reviewed Orszag's testimony before he offered it to judge James Kleinberg. HP's expert witness in the damages phase of the suit said he based his testimony on Itanium road maps from HP as well its chip partner, Intel.

If Orszag and Hewlett-Packard are on target, then 2020 would mark about two decades of actual service to the enterprise computing customer. That's a mark that HP's initial chip family for the 3000 didn't achieve. But the period of 1974-1989 was nothing like the 21st Century. For one thing, Intel didn't have competing versions of an enterprise business processor on sale during the '70s and '80s. That split focus for Intel showed up again last month, when the chip maker announced a couple of downgrades to Itanium's future.

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Still Patching After All These Years

PatchesHP solved the problems of the 3000 and MPE with patches, revised software which Hewlett-Packard still distributes today. Probably not as seamlessly as it did while the company supported the system. But just as inexpensively: MPE/iX is one of the only HP operating systems with free patches. The still-engineered and fully-supported OS lineup requires an HP support contract to retrieve patches, even the critical ones.

Patches resurfaced in my reporting this afternoon while I interviewed a consultant to a large site, one where 22 HP 3000s once ran altogether. Today it's a couple of N-Class servers. He was feeling good about the chances for a Stromasys emulator there, partly because the customer is already running on MPE/iX 7.5. The final generation of the OS is required to run the Charon HPA/3000 emulator.

"We got away from using Large Files, too," he added. "I think HP never did fix that corruption bug in those." That would be the >4GB corruptor, discovered in 2006 by Adager and finally fixed in '07 by HP's IMAGE/SQL labs. The repaired software required a millicode patch, the first one HP'd written for the 3000 in 16 years. You can get that patch via HP's Response Center website. But that's not how most 3000 managers are getting these patches today.

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A Thorough Chill of the OS Business

LGFridgeThe consumer product maker LG has announced it's purchasing the webOS team, talent and tech from HP. This means a company whose lineup includes french door refrigerators now owns the most modern mobile OS in the world. As it turns out, great technology like webOS doesn't have much value in the hands of a company which can't create demand for the magic.

There's so little value left in webOS that the joint release about the sale says "HP and LG do not expect this transaction to have a material impact on either company's financial statements." And so, without even a report of what webOS cost, HP froze itself out of another OS product line.

Some operating systems not only have enduring value, but they are also drawing top talent to their community. It happened late last year for RedHat's Linux; Jeff Vance took his next step away from HP's 3000 guru days, when he made his transfer from K-12 vendor QSS to the Hat. Vance arrived at QSS with gusto for newer development environments and got to ply his passion for years there.

But the signals sent by selling off an innovative OS for "no material impact," well, they say a lot about how system makers create their value in 2013. The mobile OS that was going to unseat Apple made its HP departure with the same language as 3000 customers shared about MPE/iX. The end of the line wasn't really the end of the line, was it?

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HP ends red ink overall, but BCS tumbles

HP is likely to remain intact for a long time, based on the comments from its CEO Meg Whitman at the latest quarterly report briefing. "The patient shows signs of improvement," she told an audience of analysts and the press. "We did better than we expected we would, and I think we should be encouraged by that."

HP EG results Q1-13Even though the company halted its quarters of red ink at two — Q1 delivered a profit of $1.2 billion, compared to the loss of $8 billion in the previous quarter — the top management delivered a dire report on business server enterprises at HP. Sales dropped company-wide by 6 percent to $28.4 billion. Its Enterprise Group sales fell $245 million, led by the continuing troubles at the Business Critical Systems unit.

"Our server business has a particularly strong market position in EMEA," said CFO Cathy Lesjak, "and the economic backdrop of that [region] is still dismal. The Itanium challenges within BCS are also still with us. There are key challenges still out there."

Lesjak said the news from the PC group — which HP said it has no plans to spin off — couldn't even meet HP's hopes. "Frankly, the business deterioration we are seeing in Personal Systems — particularly in EMEA and with notebooks — is worse than we expected."

One analyst on the call noted that the profit margins for the Enterprise Group have dropped for nine straight quarters. He wanted to know why, and Whitman laid the first pile of blame upon Business Critical Systems, the unit where HP sold 3000s until it dropped the server 10 years ago.

"The negative factor is the decline of BCS," Whitman said. "It was a big and profitable business, and you see that it's declined by 24 percent year over year. The good news is that we've got the best product lineup we've had in a long time in [the Enterprise Group.]" Whitman went on to note that HP is making investments behind the Enterprise lineup.

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HP aims at Enterprise ally uptick for 2013

Hewlett-Packard will be reporting about its past in a couple of days, briefing analysts at 5 PM EST Feb. 21 about the quarter just ended in January. But the company will be looking ahead at its fiscal quarters to come starting tomorrow, when it briefs HP allies at its 2013 Global Partner Conference.

Global PartnerIssues and opportunities for customers who are migrating, or have already moved, will dominate the conference. That almost goes without saying; HP's closed off all other 3000-related business including support. But HP is also going to share information that could be just as useful for those analysts, being briefed in the same week. HP's going to talk about its Oracle alliance at the meeting in Las Vegas (see the detail at left). The story might be the same for partners as analysts and the business press. Sales ally presentations will have an optimistic slant in Vegas. Eveyone wants to be hopeful in that town, at least when they arrive.

What HP sketches at this sales meeting -- the year's largest partner conference -- will shape what these partners say to customers about Oracle. The database vendor has been forced by the courts to keep working with HP on Itanium server technology. Nobody knows what that enforced alliance will yield yet. The court ruling and Oracle's capitulation only happened in September. Partners have fielded too many questions about the FUD that Oracle spread, and HP's said in previous quarterly reports that FUD choked off Enterprise business.

However, it's an article of faith: applications determine where a customer will go when they leave the 3000. But an application off the shelf always needs a database, and Oracle is underneath a lot of them, especially on HP-UX. If a migrating customer can ask an HP partner, "What's the database feeding that application?" then the answer -- leavened with this week's Oracle alliance message -- can shape a migration decision. You'd want to know if you were entering the Oracle enterprise airspace by migrating onto an app in Itanium, wouldn't you? Especially with a court order driving Oracle development.

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Where they've gone: TV George, on from HP

NewGeorgeFor awhile in the 1990s, George Stachnik was the equivalent of Ed McMahon for the HP 3000 world. He hosted the first set of telecasts, via satellite feed to HP offices, directed at improving the HP 3000 customer experience. You were likely to see him at Interex user group events. And then he had a reprise as HP's voice of migration advice in a series of Webinars, back when that was still a new medium.

This year Stachnik has made his exit from HP, after more than 29 years of service. He has joined the staff at Porter Consulting in the Bay Area. The company develops marketing programs, collateral material such as articles and white papers, enterprise marketing management, and content delivery via websites and mobile channels.

CookingGeorgeIn summary, it's the same kind of work Stachnik did for HP for the past two decades and more. He made a transition from HP support engineer to marketing in 1991 and never looked back. After the era of educating customers via satellite and videotape ended, he trained customers for HP's NetServer Division. These were Windows enterprise servers. To the last of his HP days, Stachnik was an enterprising face in the 3000's cast. One of his wilder moments involved destroying an HP 3000. Or attempting to do so.

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Battleship HP clears the $17 waterline

Hewlett-Packard's share price opened and remained above $17 per share today for the first time in more than three-and-a-half months. The last $17 day was October 2, when CEO Meg Whitman delivered a devastating report to investors and analysts about profits and sales for HP's year to come.

HP shares fell 13 percent on that day, one marked by the admission that Hewlett-Packard's profits would sink by 10 percent in fiscal 2013. Rock bottom for the darkest quarter in HP history came about six weeks later, when the news of fiscal shenaigans by the acquisition of Autonomy drove shares below $12.

That rugged news now behind HP still must be balanced by the company's Q1 performance. Sales close in two weeks, HP's first full quarter without the FUD of Oracle's pullout from the Itanium server line. Stronger sales in the Business Critical Server unit will signal a better investment target for migrating customers -- at least the ones who want to choose HP-UX for the systems to replace HP 3000s.

The HP quarterly Earnings Conference Call will take place on February 21. HP hasn't released any signal that it will spin out its enterprise business from PC operations, a move which investors are calling for.


What If: Fault lay not in the 3000, but in HP?

In the early years of my HP reporting career, the company tried to sell PCs against IBM. It had innovative technology in touchscreen HP 150s with strong links to enterprise office software via those PCs. HP's ad slogan began with an invitation to a customer to imagine something more connected to the customer than IBM: "What If?"

ReporterNotebookIt's a good question today, nearly 30 years later, especially when used to evaluate HP 3000s. HP lopped off its futures with the server in 2001, less than a year before it attacked the PC market by purchasing Compaq. Some products had to go, if HP hoped to convince institutional shareholders that a $25 billion acquisition was good business.

Touchscreen 150So the 3000 was derided and deprecated by HP. The server had a failing ecosystem. Customers wanted other HP products, like PCs for businesses, running Windows. Over a few more years, HP acquired even more love of outside products. It changed itself as a company, while it fled from the challenge of asking customers what if about its unique technology like the HP 150. Now there are calls for HP to return to the company that it was before it became a consumer-obsessed, low-touch customer service juggernaut that's careened into a financial ditch.

What if the fault lay not in the HP 3000's starry design, but in HP's leaders themselves? When Steve Jobs takes a walk through the neighborhood of Palo Alto to counsel an ousted CEO of HP, you can be pretty sure that a great deal had changed for HP, and none of it for the better. And that walk took place more than two years ago. Jobs believed that Mark Hurd should've never left HP.

That's how completely Hewlett-Packard had faulted from its enterprise line. A leader who slashed R&D, and rubber-stamped even more pell-mell pursuit of the consumerist strategy, was now the bulwark. Proof enough HP had changed completely, and offered in a story this week from the Apple community.

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How to Make HP's Diagnostics Free on MPE

ComputerdiagnosticMore than two years ago when HP officially closed its formal HP 3000 support, the vendor left its diagnostics software open for use by anybody who ran a 3000. Throughout the years HP sold 3000 support, CSTM needed a password only HP's engineers could supply. But the CSTM diagnostics tools started to run on January 1, 2011 without any HP support-supplied password. 

However, managers need a binary patch to free up the diagnostics. Support providers who've taken over for HP know how to enable CSTM. The community has a former Hewlett-Packard engineer to thank, Gary Robillard, for keeping the door to the diagnostics open. Robillard says he is "the engineer who, last worked on CSTM for MPE/iX when I was still a contractor at HP back in 2008."

A 3000 site must request a patch to get these expert tools working. HP arranged for 3000 sites to get such patches for free at the end of 2010. We tracked the procedure in a Newswire story, just in case that HP link above goes dark.

One such patched version of CSTM needs a binary patch. This month Robillard was revisiting his binary patch fix, which can be a part of using these diagnostics, with the HP patch ODINX19A noted below.

Versions of CSTM [patched] with ODINX19A or ODINX25A allow the expert tools with no licensing, but you still have to issue the HLIC command. 

If you install ODINX25A/B/C (6.5,7.0,7.5) you won't need to do anything except issue the hlic command with any password. The HLIC command might say it was not accepted, but the license is activated anyway.

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2012 top losses: Itanium's future, HPQ value

By Ron Seybold

Second in a series

ReporterNotebookDuring 2012 the recent legacy of Hewlett-Packard pulled down the company's futures and values openly for the first time. The company's 73 years of business had devolved in full. A lawsuit exposed completely the new wart of borrowing R&D dollars, over a full decade, to boost HP revenues via mergers and buy-ups. The future of competition was mortaged for commodity computing. The same lack of R&D appetite that'd left the HP 3000 out in the cold after acquiring Compaq business computing now showed HP was bereft of enterprise intellectual property. Nowhere did the cupboard look more bare than the tech choice that had dumped its MPE/iX futures: Itanium.

ExpandIt became plain that the VP of the BCS Unix-Itanium unit, Martin Fink, pushed a plan that might have grown HP-UX stronger just as 3000 sites were getting serious about investing in Unix. The decline of HP 3000 support contracts was even noted in a 2010 document, one that tried to prove that moving Unix to x86 would benefit HP -- by way of sparking new Integrity sales and stronger support revenues for the last OS developed by Hewlett-Packard, HP-UX. One that remained utterly tied to a single chip, Itanium -- until the HP Odyssey emerges from development.

Concocted as a replacement for Intel x86 chips in 1992, the processor that powers all HP Unix servers was uncovered as a product reduced to earning support profits for HP, while taking earnings out of its partner Intel's pockets since 2007. Oracle did lose its lawsuit to halt Itanium releases. But the magnum of evidence uncorked by Oracle -- hundreds of emails that spoke an astounding honesty about the final HP-built enterprise tech environment -- overflowed in the press as well as the courtroom.

Damages to HP from the Oracle lawsuit may fall on the database maker, but the wreckage will not be measured by HP's greatest loss: company valuation. HP sloughed off 43 percent of its market cap during 2012, the largest US slide for the year and a loss attributed to failed mergers fueled by R&D cuts and layoffs. The evidence from HP emails and slides in 2012 made its case of losing up to $4 billion yearly in Itanium-related profits -- even while the company knew, and withheld, facts from its own sales regions about the dire futures of the chip family. The BCS unit continued its slide as of the November financial report (see p. 7 of HP's PDF).

I revisited the turning point of HP's 3000 and MPE/iX exit, but written much larger -- hundreds of thousands of servers put at risk because HP didn't control its own intellectual property for chips anymore. Intel would have to be satisfied, or paid off. In 2012 we learned the latter plan was picked by a board that was still fleeing R&D in 2010.

I wrote a host of articles during 2012 to keep driving home points about investments in HP's Unix. Most of the analysis meant to show that the customers who transitioned HP dollars from MPE to Unix were re-investing in a technology no longer growing (like HP's measure of the 3000 in 2001), one that needed hundreds of millions of HP R&D to keep moving forward.

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A virtual 3000 leads the top stories of 2012

Analysis by Ron Seybold

First in a series

When summing up the last year of 3000 community news and developments, the story which appears the biggest covered the first 3000 which a manager could no longer see.

ReporterNotebookEmulator news from Stromasys, whether about ship dates and demonstration, adoption for production, or a free version including HP's MPE/iX, pulled the system's future into the present day. The Charon HPA/3000 became an installed reality at production sites and a free download for the widest share of the community. At the same time, HP's Unix platform shed the FUD from Oracle, thanks to the courts, and cloud hosts clambered into the server picture.

A dozen stories floated to the top of my news view during the past year, some of them related to another, others standing alone in their importance. The year didn't carry a marker like the 2010 end of all HP support for MPE, or the first-decade anniversary of the HP pullout (and subsequent HP3000 Reunion) of 2011. But 2012 marked 10 years of serious migration plans and actions, and we looked for evidence that the greatest share of migrations were ended. Whether a vendor or a customer was homesteading or making its transition, the year delivered that constant element of any IT calendar: change.

Emulator solution: from demo, to adoption, to freeware -- A virtualized MPE server, working as a 3000 emulator, made the transition from alpha test to a springtime beta demo, and finally a production and freeware reality. The last state of existence emerged as a target in mid-year when Stromasys announced new plans for a 2-user freeware version of HPA/3000. It took more than four months to create a evaluator and hobbyist version of the software. Stromasys referenced production status at an Australian company in October. A public webinar demonstration in April showed how an LDEV 1, acting like the entire HP 3000 cradled on a beefy laptop, could be virtualizated in a disk image file -- to reduce the need for further HP iron to preserve MPE/iX.

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HPQ fights its way back, but riding Icahn?

HPQ Nov-DecHewlett-Packard stock prices made their way out of the $11 range and back into the $14.50 territory this week. The backing for the vendor which makes the migration target environment HP-UX saw a rally of 26 percent over the last 15 trading sessions. That's the period since HP last made a comment or a report on its Autonomy debacle, or the second straight quarter of red ink overall.

Carl_icahnLooksupAfter trading 154 million shares during that rock-bottom November 20, HP's fortunes have risen. But for what reason, the analysts are asking. Not on the strength of the HP Discover announcements in Germany last week. HP didn't push above $14 a share until Monday. Its appointment of new EVP Mike Nefkens to lead HP Enterprise Services emerged a week earlier. Its beefed-up Converged Cloud Portfolio made its debut December 4. No seemingly plausible connection there, either.

HP announced its bedrock quarterly dividend of $.13.2 a share as usual, payable to stockholders of record as of Dec. 12. That would have helped get the cart out of the trading ditch this week. But another rumor about the maker of Integrity-Itanium servers emerged over the last few days. Takeover king Carl Icahn might be purchasing HP stock.

Or not, since the 5 percent purchase of outstanding shares threshhold hasn't been triggered yet. Once a stock gets a buyer at that rate, SEC rules kick in and the curtain is pulled away. Nobody knows if Icahn could make a difference to a company whose printer business has stopped growing and whose PCs are now running behind Lenovo's. And some are asking if the legendary activist investor even wants to shake up HP's board.

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HP Cloud adds SLA as prices drop on Amazon's, Google's cloud services

HP customers who have been patient with the vendor's ramp-up of cloud services are being rewarded one last time this month. The HP Cloud service is moving from a beta period that started in May to a full Service Level Agreement (SLA) version, starting on January 1.

Host ItTerry Floyd of the MANMAN services company The Support Group said he received a notice over the weekend that HP is "particularly grateful for your business and feedback as we build HP Cloud Services' portfolio and service offerings. In appreciation of your engagement through the Beta period, we continue to offer the service at a 50% discount off the list price through December 31, 2012. The full list prices shall apply starting January 1, 2013."

Cloud Infrastructure as a Service (IaaS), Floyd said, might be a logical place to host an instance of the HP 3000 emulator, or experiment with the forthcoming freeware version. (We're still listening for news of when that freeware will be an available download.) On the other hand, a cloud instance could be a useful place for a test environment of a new platform for migrating customers. Migration partners such as MB Foster see a future where it will be the rare small- to medium-sized business that hosts its own hardware.

But even while HP muscles up to a 99.95 percent uptime SLA, its competition is racing to a lower bottom line. These aren't small competitors, either: Amazon and Google have been in the cloud longer than HP. Amazon is finishing up its sixth year offering virtual infrastructure.

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It's time to admit that IBM won at being No. 1

It's taken more than 10 years for all of the votes from the business community to be counted. But after HP launched into a campaign to become the world's largest computer company, by buying Compaq in 2001, the enterprise IT legend that HP's chased has finished at No. 1.

BernsteinNot in company sales, of course. As Kane's financial manager Mr. Bernstein says in Citizen Kane, "Well, it's no trick to make a lot of money... if what you want to do is make a lot of money." The trick HP wanted was to make a lot of profit while increasing shareholder's value. This week we received two pieces of news about that odyssey to be No. 1. Both suggest the game is over, and HP will need to try to win the next, different game.

First, the bond rating service Moody's has downgraded the value of HP's debt paper to just three steps above junk bonds. HP's debt carries the steepest risk ever at a Baa1 rating. This didn't matter as much when HP held so little long-term debt. That's not the case today. About $25 billion in debt is affected, Moody’s said.

HPvsPSASecond, the price of HP's stock has taken a tumble all through 2012. It's dropped so low in company valuation that Public Storage of America, a $1.8 billion storage unit renter, is now just below HP's valuation. Hewlett-Packard is the diving blue dot in the valuation chart, and PSA is the green. HP now needs 330,000 employees and $130 billion a year in sales to keep up with a storage unit company's value. HP lost that valuation that's charted there in a little more than one quarter. There seems little chance of regaining it while HP's built the way it is today. 2013's February 21 looks like a genuine fork in the road. HP reports its Q1 results that day.

In this week's New York Times, an op-ed piece written by a CEO contemporary of the Bill-and-Dave HP says it's time to split up Hewlett-Packard. Not to improve its valuation. To save the company, says Bill George, now a professor of management practice at Harvard Business School.

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As Itanium speeds up, sites fly to Windows

Within the next week, HP's going to ship a new generation of Itanium-based servers. Using the Poulson chipset known as the Itanium 9500, these blade-based systems are going to outperform the current generation of Integrity servers by a factor of 3.29, according to HP.

Rx2800i4The engineering gains are impressive. HP tested the new Integrity blades that use the 9500 series against the Itanium 9300-powered servers. Blades start at $6,490 for the 9500-based systems. "For those remaining committed to Itanium and its attendant OS platforms, notably HP-UX, this is unmitigated good news," said Forrester's analyst Richard Fichera. HP's building these new servers exclusively in Singapore, so it can offer three times the computing speed at about the same price.

But even with all that improvement, HP needed to remind the market that these gains were also heading to its Intel x86 Xeon systems. The reason for that reminder: more of HP's customers, such as those leaving the 3000 in migrations, are moving to Windows.

We're not hearing nearly as many reports of migrations which landed on HP-UX systems. The latest news arrived today from Bob Thorpe of National Wine and Spirits. At the Detroit-area IT center, this 3000 pro turned migrator said their customized system is being moved, COBOL and all, to Windows.

"We are in process of having our in-house designed app (using COBOL, IMAGE, and VIEW) converted to NetCOBOL," he said. "We will migrate to a Windows Server platform by March or April next year."

It doesn't matter so much that it took NWS 12 years to leave MPE/iX. What seems more meaningful is that in spite of the Itanium speed-ups, HP couldn't lock NWS into its single-vendor, OS-plus-Itanium environment during those dozen years.

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CEO Leo's defeat now complete with loss

NewsWire Editorial

HP's stock dove 10 percent this morning on the news that its last big-ticket acquisition lied about its net worth during the 2011 buyup of Autonomy. Aside from the spectacular flame-out of the HP TouchPad and its subsequent fire sale -- and the loss of WebOS futures -- Autonomy was about the only other thing Leo Apotheker could manage while CEO. Manage, it appears, being a term used hopefully.

Now comes the news that HP believes the UK British company it bought for $9.7 billion lied about its finances. Current CEO Meg Whitman didn't call it fraud, but the undervaluation triggered an $8.8 billion write-down of the value of the UK maker of big data software.

Whitman said in a statement there were "serious accounting improprieties, disclosure failures and outright misrepresentations at Autonomy Corporation PLC." The former CEO denied the charges, but the Associated Press ran a story this morning that tallied the tricks that Automony used to fool HP.

StrikeoutHow bad is the strikeout? This time HP is asking the SEC and Britain's Serious Fraud office to look into criminal charges. The inevitable HP lawsuit, this time against its own operating unit, is in the wings. The AP story said Whitman revealed "a senior Autonomy executive volunteered information about the accounting shenanigans, prompting an internal investigation." The internal investigator? None other than PricewaterhouseCoopers. HP tried to buy PWC during the Carly Fiorina spree, but the boardroom held that one in check. HP got EDS instead, along with another $9 billion writedown.

The result is the second straight quarter of losses for HP, a first in the company's history. The maker of replacement systems for migrated HP 3000s is having a dark chapter in its turnaround story. Now it heads into a winter season where tablets -- a product HP failed to launch under Apotheker -- will be bleeding sales off the PC business which HP has been using to generate cash, if not many profits.

The turnaround story will have to start in earnest come mid-February. No one knows what it would mean to see HP fail to turn a profit for nine consecutive months. While its cancelled HP 3000 business didn't deliver enough cash to survive the company's new wave, at least HP knew the valuation of the 3000 for certain. After it cleared Y2K, that year was the start of HP's era of buying companies like Autonomy which triggered moves like easing the 3000 out of HP's future.

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What day is it? Oh, it's THAT day

14thCalIt's November 14 in the US for awhile longer. If the date isn't significant to you anymore, or you never knew why the middle of this month represented a visionary cliff for HP, let us bring you up to speed. HP announced a five-year plan to the HP 3000's end of life on this date. Eleven years ago.

I know, you must be confused. You've probably looked over at the 3000 in your server closet or the office and had a thought. Hey, this machine has already had it's end of life. How can I still be using it? Didn't HP promise dire consequences and risks galore for anybody using that computer after December, 2006? If the maker didn't kill it off, who's in charge of that anyway?

To assist in marking the anniversary of HP's jump off the cliff, we've assembled a short FAQ.

Who was in charge at HP when they made this decision?

Good question, although it doesn't matter much because everybody's moved on. The CEO, Carly Fiorina, wrote a hardcover book and ran for US Senate after leading HP around for six years. She had a "it's growing or it's going" mantra once the company wanted to buy up Compaq. The high-growth march left HP's 3000 plans on the cutting room floor.

Wasn't it some general manager who decided to end HP's 3000 life?

It was, but don't let anybody tell you it was anyone but Winston Prather. On the strength of a promise to preserve the jobs of people in his division, he told the world "it was my call" to chop off the futures of the HP 3000 at Hewlett-Packard. He might have been the first GM in the company's history to kill off his own product line without any involvement from above. Or, there might have been a series of elaborate PowerPoint slides presented to the VPs who had some access to Fiorina. The CEO wasn't fond of giving much authority away. Prather took the credit for the hit, but he wasn't the single shooter. It's tough to imagine a 28-year-old product line with 25,000 servers worldwide, including some inside of HP's own datacenter, being slashed by a general manager who'd held his job for less than two years.

Prather has taken on work outside of product general management at HP. Christine Martino, the marketing manager whose job involved selling 3000s in marketing, has hung on in something you might have heard of called cloud services. The HP Cloud is up against Amazon's, so there's got to be some real deja vu going on there against another Goliath.

The last general manager who tried to grow the 3000 was Harry Sterling, and the last marketing manager to truly try to sell it was Roy Breslawski. His successor told us that putting Oracle 8 onto the 3000 wasn't going to help, because IMAGE was enough, and advertising wasn't part of her job, either. Things didn't get better for new business on the 3000 from there -- unless you count the dot-com boom that created scores of new high-profile customers in retail and catalog sales. You hadn't heard about those? That doesn't come as a surprise. Nordstrom's just turned off their HP 3000 last year.

Continue reading "What day is it? Oh, it's THAT day" »


Intel takes Itanium towards Xeon's standard

Intel-Itanium-Processor-9500_3HP has introduced a new generation of Integrity servers powered by the Itanium 9500 chips, computers which will start to ship in December. For the HP-UX adopter of migration platforms, the Integrity systems have been high-value, high-performing, and high-attraction computers. The servers are blazing fast and a good value for a high transaction box (something crucial to 3000 migrators). They've also been attractive as in sticky. Because taking steps down the HP Unix path has meant treading the tar-pit of Itanium. No other processor will run HP's Unix.

However, Intel is starting to take its own steps to open up the Itanium architecture. With the Intel 9500 announcement, the chipmaker added that there would be shared technology between Itanium and HP's acknowledged industry standard for processors, the Xeon family.

Future generations of Intel Itanium processors will adopt an innovative "Modular Development Model" that enables deeper commonality between Intel Itanium and the Intel Xeon processor E7 family, from shared silicon design elements to full-socket compatibility. This will provide a more sustainable path for Itanium development and greater design flexibility for Intel's partners.

HP itself calls the Xeon server business Industry Standard. When Intel starts to talk about taking steps to sustain Itanium development, it's a sign that the future being sold to HP customers was wearing thin. Oracle tried to prove as much in its attempted pullout from Itanium development, but a judge ruled against that ideal. However, the evidence submitted for the lawsuit trial showed HP's Project Redwood documents were aimed at shoring up Intel's Itanium interests. The project was proposed before Oracle bought Sun, and Itanium sales have gone nowhere but down since then. Those sales have the advantage, however, of still being far more profitable than all of HP's PC business.

This "but it's profitable" perch provided no safety for HP's 3000 plans during 2001. The 3000's sales and installed base were not growing to Carly Fiorina's satisfaction. And so the customers were given an "end of life announcement." In every company's product line, all products die one day -- at least a death of manufacturing. Then there's some loose cannons that cook up an emulator, and heaven knows when the 3000 will see an end of life.

Even if Itanium growth continues to decline, Intel's fresh plans will let the chipmaker keep developing new iterations of Itaniums. However, they're likely to be more incremental than innovative. Innovation requires marketplace growth. In HP's world, as well as Intel's, growth is Xeon's speciality.

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HP flies its Fink just as Poulson pokes up

FinkMartin Fink because a lightning rod among HP enterprise users over the past year. The former general manager of the Business Critical Systems unit, which has led the HP enterprise sales slide for the last five quarters, was bumped into HP's top engineer spot this month. HP named the man who'd battled Oracle over Itanium, and won, the leader of HP Labs and the company's CTO. Those are two positions which have never been combined at HP until this month. Personnel moves at HP can spark head-scratching in 2012, but this one baffles me in a way that says something about the HP Way.

Fink took the reins of HP's R&D empire just as Intel rolled out its latest -- and maybe the last -- upgrade to the Itanium chipset. Poulson arrives as the Itanium 9500 Series for Mission-Critical Computing. Way back in the history of HP, the HP Labs once worked on the keystone of VLIW architecture, which it once called HP Wide Word. That work was turned over to the Intel Labs while the two companies partnered. Of late, the HP Labs output runs to the world's greatest device fans (and I'm not kidding about the greatness) and experimental designs for chips that couldn't be built in 10 years of continued research and design.

Although Fink's unit will likely spill even more sales blood in the figures to be released at the start of Thanksgiving Week, he's the man that HP's Board of Directors has assigned to lift up R&D in the company. The CEO Meg Whitman has spent much of 2012 saying HP ought to be building tech instead of buying it. Perhaps, since Fink's line of business relied upon a chip and an OS that were built out of HP's wizardry, he'll get the budget to demonstrate a new R&D gusto required for enterprises.

But to start off, he'll want to backpedal on one of his 2011 predictions on HP technology development. It may not be an HP Labs-caliber project, but you'd think he'd head for his engineering throne with a mission to make HP-UX run on Intel's Xeon chips which power the ProLiant series. In other words, to make HP's Unix an industry standard product. Long before Fink grew into a GM, HP-UX was touted as a standard by Hewlett-Packard. A migrating HP 3000 site would do a lot better with a Unix investment if it became a standard. HP calls the successful part of its enterprise lineup the Industry Standard Servers.

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Manufacturing Projects with HP Cloud

Gladinet offerHewlett-Packard has been promoting the concept of cloud computing for more than three years, culminating in the opening of its own HP Cloud service this year. This month there's a special offer of 1 TB of extra storage in HP Cloud. It's available by signing up for a Team Account at Gladinet, a provider of cloud storage access solutions. In its simplest configuration, Gladinet is a shared and collaboration workspace like Dropbox for Teams, or Box.

HP Cloud will chip in 1 TB of space with a Gladinet Cloud signup in the deal. There's also a Gladinet Enterprise version that can be modified for more extensive work sharing. But the HP Cloud's got some other possible uses for enterprise customers, perhaps as a means to host the Stromasys HPA/3000 emulator. Terry Floyd of the Support Group checked in to ask about an update on the Personal HPA/3000. Floyd's company supports manufacturing sites running HP 3000s, as well as some non-3000 operations and prospects.

"I recently joined a free partner program for HP Cloud and can supposedly specify what kind of system I want, and deploy anything I can make fly on it… for just a little bit a month," he said. Floyd's working on calculations about how big HP's little bit of cost will be, "and what happens when I decide to pull everything off of it and stop paying." Cloud-based hosting poses this "take-my-stuff-back" issue, one which is new to the 3000 IT manager who's hosted everything locally up to now.

This morning Floyd reported that "I have not activated my HP Cloud space yet. It would take a phone call to them to get the configuration I want – it wasn’t among their standard offerings." One thing that's held Floyd at bay about HP Cloud is the sophistication of the Salesforce cloud offering. "HP Cloud is probably a long ways behind what Salesforce is doing," he said after attending the recent Dreamforce '12 conference.

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State of HP license transfers alive, kicking

TransferwiresEveryday purchases of used 3000 systems have included license transfers for many years by now. When there's a 3000 license to transfer, of course. Some customers have a host of old 928s they could transfer with legal paperwork. Some have just one server, but it's been in archive-only mode for awhile.

Taylor Lumpkin of Hire Experience is in one of the best license positions we've seen.

We are still a HP Partner, and HP have allowed us to have free MPE for over a decade now. We also own a small pile of 918s which all have legitimate HPSUSAN numbers with the HP license converted into our name by HP, back when they still did that.

But for others interested in a license transfer, the requirements from HP include a $400 fee (US dollars), plus a serious sheaf of documents, either to be signed or presented. The paperwork is no more extensive than it ever was during the post-1999 era. 1999 is the year that Hardware House and a few other brokers were sued by HP for illicit use of HPSUSAN numbers, all to create 3000s out of 9000s or upgrade the user limits. That was back in the day when MPE/iX came with user limits; those were dropped with the 7.0 release of the OS for the newer A-Class and N-Class 3000s.

But some prospective freeware emulator customers have more questions on the details. One veteran of the 3000 platform even wonders if an MPE V license will do for a transfer. After all, MPE is HP's property, but its vintage may not matter. Such stuff isn't covered in HP's webpage on SLTs.

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HP insists emulator transfers be immediate

An HP 3000 emulator offered to the community for evaluation or personal use will require a license transfer right away, HP's Jennie Hou has confirmed.

A personal, freeware version of the Stromasys 3000 emulator product is coming very soon. It's a 1- E3000 PU horsepower instance, basically a Series 918. It's designed to help customers test the abilities of the emulator. Stromasys already distributes this kind of freeware for its VAX/Alpha emulator.  

Hou said HP requires its customers to transfer an MPE license at the time they start to use this freeware product.  "The one-to-one license transfer is required," Hou reported.

In 2004, HP outlined the terms for an emulator-only license of MPE/iX. An FAQ created in 2008 stated that 'If "a customer cannot transfer a license from an existing HP e3000" to an emulator installation, can they pay HP $500 for an RTU license to enable that emulator." By this year, however, the only licenses available are the Software License Transfer licenses from existing 3000 systems.

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Now arriving: Calls for an HP breakup

HP slide stockHewlett-Packard's stock took another tumble today, the latest bit of insult added to the injuries of the year 2012. Shares closed at $14.37, a low that HP hasn't seen in more than a decade. The sell-off was triggered by an HP analyst briefing you can watch for yourself on the Web. The financial experts are edging toward a consensus that HP ought to become two companies -- with just one of them focused on your enterprise dollars.

More than 150 million shares traded hands at the end of the last week -- Monday was a market holiday -- a volume that HP had seen only once in 50 years of trading: in the shadow of the Mark Hurd ouster of August 2010. All of the high-volume days of trading since then have hammered the stock into the mid-teens. HP has found a way out of this before -- by purchasing EDS and muscling its way into top spots for PCs and servers. Those services and PC plays are gone for good. That chart above only shows the stock slide from February onward.

The breakup calls include a remarkable one from an analyst who says even Bill and Dave would push for an HP dedicated only to enterprise computing. At the Forbes.com website, UBS analyst Steve Milunovich said that activist investors or private equity buyers are likely to split up HP.

In our view, full value won’t be realized by just improving operations -- structural change is required. Based on HP’s history, we think Bill Hewlett and Dave Packard would support this approach.

But the current HP strategy is to try to reorganize its way out of a free fall dripping with quarterly red ink and slipping sales. A full split, Milunovich wrote, would at least push HP's shares to $20. Usually an analyst briefing like last week's produces a modest bounce in share prices. HP seemed to confirm just the opposite, even though its presentation included "The Great Things About HP."

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Emulator freeware license needs hobbyists

HP doesn't have much impact on the 3000-only customer anymore, but the licensing terms which can matter to auditors are still in force in 2012. Although it's almost nine years since Hewlett-Packard built a 3000, the MPE/iX license tied to every server still carries some barbs.

HobbyistThe terms are "barbs" in sense of hooks or wire, since the audited 3000 owner will see these license items are designed to stick to the servers. You could download a personal freeware copy of HPA/3000 this month, or even next. But as things stand today, HP expects its customers to transfer their MPE/iX license to the freeware version of the Stromasys product. Even if the freeware is just there to experiment with, testing to see if it can duplicate the work of the HP-badged hardware. It still needs a license transferred. That's a $400 charge to test out freeware.

But being an MPE hobbyist might change that.

Jennie Hou of HP -- the last business manager for HP 3000s -- remains the decision maker for this kind of policy. Stromasys CEO Ling Chang, a former HP exec, checked out the chain of command last week. Bernard Determe, Service Lifecycle Planning manager for Enterprise Servers, Storage, Networking and software, said Hou is in his team and has the call on a fresher licensing concept: hobbyist copies of MPE/iX.

HP's Digital group has done this for more than a decade with VMS. The hobbyist licenses are limited to non-commercial uses. That's very good news for the 3000 user who's hoping for a hobbyist license. At least Hewlett-Packard has history of the goodwill needed to create this kind of MPE license.

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How about an MPE hobbyist's advocate?

TitltingatwindmillWho's still on the field for the game between HP -- the owner of MPE/iX -- and the user community? Connect is a user group representing HP customers, but the only 3000 advocates left are on the board of directors. Chris Koppe is past president and current business strategist for Fresch Legacy, nee Speedware. The current Connect president Steve Davidek manages a 3000 shop in Sparks, Nev.

OpenMPE had a good run from 2002-2009, but that's become a volunteer group for online resources like the Invent3K site. The days of advocacy over MPE might be over, some say.

But perhaps not. Stromasys is working on arranging the license and delivery specifics for a personal, freeware edition of its new HP 3000 emulator, HPA/3000. There was once a license offered for that emulator by HP. But the vendor's cutoff date to sell such $500 licenses was December, 2010. Stromasys hadn't even announced its designs by that time.

A license for freeware in HP's Digital VAX/Alpha customer base doesn't face this dilemma. Digital created a hobbyist license for VMS so long ago that HP was still building 3000s at the time. This hobbyist license gives the users of the Stromasys VAX/Alpha freeware all rights to run OpenVMS on that emulator. The same kind of license needs an advocate for MPE/iX users. Even a 60-day grace window to run MPE/iX on the emulator would be a good start.

As members of both Connect and OpenMPE can testify, advocacy is no hobby. Especially not with a company as lawyered-up as HP. But the MPE community now has an ally in a former HP executive, one who has just begun to lead Stromasys.

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How LTO Tape Support Won't Matter, Soon

LTOBetterA few weeks ago an InfoWorld article told the IT community that the storage in the cloud was the final nail in backup tape's coffin. Our intrepid author Brian Edminster took a close look at what the Amazon Glacier cloud could do for the HP 3000 user. But it's almost as important to listen to what he's got to say about support of the latest LTO tape devices.

They won't make you need to migrate, though, if you virtualize the 3000 iron.

It's just another example of how an emulator removes the risk of staying on an environment. A virtualized server isn't going to be tied to interfaces from 10-year-old systems, or IO designs first crafted in the previous century.

This used to be a big deal in HP's engineering plans. One of the primary advantages to creating PA-RISC architecture was supposed to be peripheral support. HP figured to be writing and maintaining fewer device drivers if its enterprise servers shared an architecture. PA-RISC just led HP away from the HP-IB interface, something Hewlett-Packard created for instruments, not computers. But in practice, the operating systems still needed specialized engineering to pass data quickly between server and peripheral.

These late-gen LTO-5 tape drives are the kind of peripherals which HP supported more slowly, if at all, during the final decade of lab work on MPE. The first LTO with an HP badge, Ultrium, ran half as fast (160 mb/sec) as the same unit hooked to HP-UX -- because its mandatory MPE interface was engineered for half the bandwidth of the more updated Unix-based servers. HP never made up the difference in speed, and that shortfall arrived right out of the gate with LTO-1. LTO-5 was the state of the art in 2010, two years after HP closed the MPE labs.

Aging backup devices can pose a serious reason to consider a migration off the 3000 iron, if you're bound to an HP-badged box. The media gets harder to buy. The devices become a special case for IT to support -- although there are some crack independent companies who'll service 3000 sites regardless of what backup drives are on the job.

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Stromasys unplugs emulator field testing

Development has passed out of a beta testing phase and into sales for the HPA/3000 emulator, according to Stromasys founder Robert Boers. The company is focusing on selling the product, an effort that led people away from kicking tires and onward to lighting the fires of production releases.

"So long as you're running a field test program, everybody is glad to participate," Boers said. "But then nobody buys. So we're pulling the plug on our field testing program."

The personal freeware version of the product will serve as a demonstration vehicle. It's been months since a bug request needed to be fulfilled, Boers said.

The product is stepping into an ecosystem where resellers are still providing upgraded 3000s at costs well below any of HP's 3000 list prices. But even those larger servers represent a proven solution which has tangible performance limits. So far, the embrace of the HPA/3000 emulator for PA-RISC 3000s has ramped up slowly. Outgoing CEO J.P. Bergmans said customers are ready to take their emulators from test to production status. Some are checking results from their 3000 hardware off a month-end closing against results from the HPA/3000.

“They’ve been running in parallel,” Bergmans said. “People want to see the same report executed before they take a decision.” But this kind of test represents the confusion over HPA/3000. Some companies who want to compare results don’t understand what the emulator product does in its design.

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HP reports new job cuts as computers slip

Hewlett-Packard gave notice this week that its job cut program will run 2,000 employees larger than forecast back in May. The total reduction in HP's workforce will run to 29,000 by the end of fiscal 2014, according an Securities and Exchange Commission filing. HP has already seen more employees take enhanced early retirement (EER) than it expected.

Those early retirements are part of HP's workforce reduction plan. Some of the enterprise talent is being forced out, while others are taking HP's EER offer. Bob Chase, an experienced Business Recovery Specialist in HP Support, started his own consulting practice after a WorkForce Reduction. Chase counted 16 years of HP experience including years of 3000 support. The company expects to spend $3.3 billion on workforce reductions through October of 2014.

At the same time these fresh cuts were announced, analysts expect to demote HP out of the top spot in computer shipments. Although HP has been left far behind in computer company measurements of market cap, as well as total sales (both figures eclipsed by Apple), until this month HP had shipped more computers per quarter than any maker.

SpectreOneBut the IBM spinoff of its PC business, Lenovo, is poised to take first place from HP. Even as HP tries to capture and retain the 3000 migration server business, its biggest revenue generator has slipped. HP shipped more than 13 million business servers and PCs in the second quarter of 2012. The September figures for PCs will change that, confirming a slide that Dell has also been experiencing -- even as HP tries to retake some sales with Apple-like designs.

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HP's migration target gets Oracle green light

After spending almost a year and a half telling the world that HP's Integrity servers are doomed, Oracle has changed its message. In the face of Hewlett-Packard's win in a lawsuit against Oracle, the database vendor looks like it will back off the warnings and continue to service the future of HP's Integrity users. Those users include customers running HP-UX, a frequent choice for HP 3000 migrators.

GreenlightA second phase of that year-long court battle begins soon. A jury will decide what damages to award HP, if any, in reparations for that 18-month campaign against Integrity. When a preliminary decision went HP's way on August 1, Oracle continued its campaign, promising to appeal Judge James Kleinberg's ruling in the Superior Court of California, County of Santa Clara. The ruling became final August 29. As of a Sept. 4 statement, Oracle has dialed back the doom.

Previously, Oracle announced that it would stop developing new versions of its software on Itanium microprocessors. For example, that meant version 12c of the Oracle database due out in early 2013 would not be available on Itanium.

However, a judge recently ruled that Oracle has a contract to continue porting its software to Itanium computers for as long as HP sells Itanium computers. Therefore, Oracle will continue building the latest versions of its database and other software covered by the judge's ruling to HP Itanium computers. Oracle software on HP's Itanium computers will be released on approximately the same schedule as Oracle software on IBM's Power systems.

IBM and HP are Oracle's leading competitors for non-Linux business server installations, so the "as soon as IBM gets it" timeline might be a fresh way to drag development feet. Oracle hasn't started to campaign against IBM's Unix and OS400 platform hardware, Power. However, you can still find Oracle's pot-shots about Itanium on the corporate newsroom webpages.

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The Security of a Slenderizing Supplier

Auburn-slimoramaOver the last three business days, the world's investors and computer customers have watched results of a radical slenderizing program. Hewlett-Packard is taking its early steps on the treadmill to becoming a leaner provider. Its most radical move just resulted in shedding all of its profits for the quarter that ended in July. HP's going to sweat out its extra weight, one 90-day period at a time.

This time around it was HP Services that forced Hewlett-Packard to drop pounds. The vendor had been eager to jump into lucrative outsourcing business since early in the previous decade. After the board of directors killed off Carly Fiorina's plan to acquire Price Waterhouse Cooper, a few years later EDS became a part of HP, at a price of $14 billion. Writing off $8 billion of that outsourcing business as lost goodwill just pushed HP's earnings into the red.

HP's numbers showed that it was  the first time in more than a decade that HP put red ink on the bottom of its balance sheet. It was the largest loss HP ever recorded in a single quarter, and only the third in the company's history. But the $4 per share loss was a sign that HP's slenderizing is serious. Its CEO Meg Whitman has said the company needs to do less, in the hopes of doing what remains even better. 

HPvIBM
IBM v. HP in 2012, so far
These are the kinds of reductions that have been overdue at HP, a company which still wants to supply the 3000 migrator with a Unix -- or increasingly so, a Linux -- replacement for MPE environments. If there are customers out there who remain undecided about their migration details: target environments, deadlines or even architectures, then the slenderizing is important. A company getting thinner in the enterprise business, for example, would not be a secure choice while making a change. IBM's not reducing its enterprise measurements, for example.

But you do want a leaner HP, if you're sticking with this vendor. You just don't want it to lose the muscle of enterprise computing, the datacenter tech business, while it gets smaller. Today HP's stock closed at $17.21. You have to go back more than nine years to find a close that's lower, back in the 2002-03 era when the business world was digging out from 9/11's disasters. HP's market cap has slimmed down to just 5 percent of Apple's, and 15 percent of IBM's.

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HP support veteran joins workforce for hire

In 2012, it's a tougher world out there for an IT pro. We’ve heard from business analysts that the best thing for any of us over 50, upon getting furloughed, laid off, or Work Force Reduced, is to open our own business. For some, it's a better chance to work than to be hired again. 

HP’s cutting 27,000 jobs over the next two years. Some extraordinary skill in HP enterprise business servers is leaving the company.

Bob Chase started with MPE in 1987 and came to HP in 1996. He extended his skills to land a place as an HP Business Recovery Specialist, part of HP’s support group out of the Atlanta area. “In 2010 I was offered a position as a hardware BRS for Superdomes, blades, and all the Integrity and PA-RISC platforms,” he says. “It was quite a challenge, as I took 35 internal HP hardware courses over four months and began working calls." But after making a transition to Superdome and HP-UX support, he’s had to leave his employer.

After 16 years at HP, I was Work Force Reduced in early June. I loved supporting the 3000, as my first computer job was as a Computer Operator making $4 per hour at my dad's employer. I was 19 years old. It was a Series 68. 

Considering the IT world of today compared to the late 80's, I have great doubt that my career path could be realized today. Off-shoring, consolidation and mergers make it a greater challenge than ever before.

Chase has opened up Chase for Hire, an independent consultancy. He believes that MPE “was an OS that left the enterprise too early.” And regarding prospects for Itanium and HP-UX, an industry-standard path to the future, away from Integrity, seems clear. There's an echo of MPE's later lifespan in the future for Unix. HP has spread more talk of Linux for the enterprise now.

Industry Standard Servers are the future as of 2012. Commonality for the enterprise seems to be paramount, more than a vendor specific/proprietary OS solution. Linux flavors will be the benefactor from this. 

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First 3000 steps: chasing HP's Mighty Mouse

MightyMouseCoverTwenty eight years ago today I took my first steps into the world of Hewlett-Packard. I stepped from the workdays of a small town newspaper editor to the monthly quest for news of bits, segments, and mice. When I walked into the Austin office of Wilson Publications, creators of The Chronicle (we didn't dare to use "HP" in the title) I found wood-paneled walls around a desk with no terminal, no keyboard, and no clue about a new HP 3000 coiled and ready to change the system's reach.

The new Series 37 Mighty Mouse was revealed to me and managing editor John Hastings about two weeks after I'd assumed the reporting and writing for that monthly tabloid, just eight issues old at the time. We opened the mail on September 13 to learn of a minicomputer covered by our arch-rival, the Interex user group's InterACT magazine. We'd never seen a Mighty Mouse, and neither had InterACT's Sharon Fisher. But InterACT got a pre-briefing on the first business computer HP ever built that needed no computer room or operators.

Being scooped in your first issue is a humbling way to start a news job. But as a dewy lad of 27, I chalked it up to the lack of newsroom practices at Wilson and began to lift my wings onto the radar of Hewlett-Packard. HP was a company so small at the time that its total quarterly sales were less than today's profits from 2012's last quarter. The $6.4 billion company had a total of five US PR contacts to cover every product in the lineup. It also had several thousand products and more software than it knew how to nurture and improve. But that Mighty Mouse was a shot across the bow of the fleet of personal computers already riding the waves of change. HP said the Series 37, priced at under $20,000 in bare bones, was an alternative to what we called microcomputers.

It can operate in a normal office environment. It looks like a two drawer filing cabinet sitting beside a desk. No air conditioning, special temperature control, or unusual electrical requirements are needed. It can be placed in carpeted rooms. Moreover, it's very quiet; HP claims it makes even less noise than a typewriter.

Longs Drug, I learned by reading my competition, was going to install more than 150 of these Mighty Mice among its hundreds of stores in the Western US. At that time a microcomputer was strictly a device for personal computing, rarely networked with anything. HP wanted businesses to purchase HPWORD, running on the 3000 for office automation, and HP DeskManager for the 3000 to tie workers together with internal mail and document exchange. Thousands of dollars worth of software, piled on top of that $20 grand.

Just outside the door of my paneled office in Texas, we ran a Columbia PC with a 300-baud modem and WordStar, plus PC 2622 software to make that micro behave like an HP terminal. We dialed up to timeshare with a 3000 at Futura Press, where our stories were set and then delivered back to us in galleys which we waxed up and pasted for tabloid layout. It would be another year before we'd even get Compuserve to link us to the rest of the computing world.

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Red-ink hawks circle HP's quarterly news

RedinkpenSomehow, HP expects to manage to take a declining PC business and an $8 billion writedown in the same quarter, pay for early retirement benefits while it cuts jobs, and then report profitability of about about $1 per share. It takes a sharper accountant's head than this business writer's to tote up PC sales reductions plus billions in a writedown and sum up to profitability. If HP hits its marks, the company would register more than $1 billion in profits for the period.

But that's still likely to be the lowest tally of earnings ever since HP purchased EDS for $13 billion and began to call it HP Services. News media company Berzinga published this forecast of HP's Wednesday afternoon numbers.

HP is expected to report that its fiscal third quarter profit fell 10.9 percent year-over-year to $0.98 per share. That EPS estimate inched up a penny per share in the past 30 days. Analysts have underestimated HP's EPS in the past seven quarters. The Palo Alto, California-based company, like Dell, has faced dwindling PC sales, and analysts on average expect revenue for the quarter to total $30.1 billion. That would be a year-over-year decrease of 3.5 percent. The company is scheduled to share its quarterly results late Wednesday.

Whether there will be red ink on HP's balance sheet for the first time in more than three decades, the company's reach into every aspect of computing looks like it's draining the profits pool at a record rate. Decisions to purchase Autonomy at almost $11 billion, plus that abortive entry into tablets with last summer's TouchPad have taken their toll -- all while the concept of selling datacenter-grade hardware into customer shops keeps losing traction. Cloud-sourced IT, or the near-shoring of computing, is sweeping into longer term planning. With its buy-ups and expansions, HP has become the largest IT datacenter company in the world. As one 3000 vendor who believes in the long term view says, "When you're the biggest, the only place you've got to go is down."

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Moving Data in Migrations: the Tools, and Who Uses and Develops Them

Arby's sandwich chain turned off some HP 3000s recently, but moving its data stocked a menu's worth of practices and tools. Based on a report from Paul Edwards, the journey worked smoothest when expertise could be outsourced or tapped.

68-69 Cruise PhotoEdwards described part of the project as a move to Oracle's databases, facilitated by Robelle's Suprtool and Speedware's software. The former supplier has retained its name for 35 years by now. The latter has become Fresche Legacy, but DBMotion as well as AMXW software is still available for data transfers. In the photo at left, the veteran Edwards is in motion himself, flying on a 1968-69 US Navy tour on the USS Hornet. He figures he's been working with 3000s half his life, which would give him enough time in to witness Robelle's entry into the market, as well as the transformation of Infocentre into Speedware, and then to Fresche Legacy.

I'm standing on the right. The two young guys kneeling down are the enlisted operators that ride in the back of the plane. The guy standing on the left is our Crew 13 Aircraft Commander. The aircraft is an S-2E Tracker Carrier Based Anti-Submarine Warfare Navy aircraft. It has a large propeller attached to a 1500hp Wright R1820-82 engine -- one of two on the plane.

Some of the data moves at Arby's went to Oracle, he reports. "They were using Oracle for part of their operations. Using Speedware with Oracle was interesting. Most of that was dumping data with Suprtool or Speedware, then formatting it in the layout they wanted." Suprtool has been guided and developed by Neil Armstrong at Robelle for nearly two decades. He recently marked his 20th year with the vendor, according to the Robelle newsletter.

Arby's also took its payroll application off the 3000, "and it went off to a service bureau. We had the file layouts that bureau wanted, and so it was a lot easier. We just said, 'this field is the one on the HP system, and this field on your layouts is equivalent.' We just matched them all up. We had some where we could say 'forget about that field, we won't need it.' "

But the transition to Oracle, as performed by a team that was supposed to be experienced in the database, was not so easy.

Continue reading "Moving Data in Migrations: the Tools, and Who Uses and Develops Them" »


HP Services takes lumps, posts losses

EnginesoonOne element consistent in HP 3000 migrations: the loss of support from the system's maker. HP's support operations include the HP Services unit, the artist formerly known as EDS. A couple of recent news items point at a loss in value when customers hire HP to support their systems.

A report in the Wall Street Journal's blog All Things Digital says that HP's CEO was in Australia last week, apologizing to a major bank about a Windows patching failure. It was serious enough that the mistake will take months to correct, according to another story in the Aussie tech website Delimiter.

One industry source with knowledge of the situation said they had never seen a situation quite like it in Australia. The problem is believed to have affected around a quarter of the bank’s desktop PC machines.

While HP's Meg Whitman was visiting the Commonwealth Bank of Australia, her company announced that the head of HP Services was "leaving the company to pursue other interests." HP also reported it will take an $8 billion charge on its Q3 finances as a result of "the impairment of goodwill within its Services segment."

Customers might wonder if a major bank IT meltdown and the Services charge are related. Whether they are or not, the Services engine that pushes HP profits and growth -- and contributes to some exodus of 3000 sites -- is sputtering this year.

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Community sage tracks HP's historic dream

1995While I'm researching the meaty bits of the 3000 for its autobiography, I found another rich resource in a chat with Birket Foster. Like few other vendors, he's celebrated 35 years this year of 3000 business. Yesterday he pointed me at a few dreamy links of HP concept videos.

These are the fond wishes of companies looking toward the future. The video of 1995 was broadcast to the press and the public during the year 1988, when the NewWave office communication products were just released. Ideals in this video -- which is full of office drama about winning a big contract -- include interactive agents tracking schedules and taking voice commands to create reports, plus presentation tools automated by spoken commands.

Everything was connected in an "all-in" concept using HP's NewWave foundation. The HP 3000 had a NewWave role, providing the data to make reports from a well-connected database. I thought 1995 was lost to dusty VCR collections, but Birket tracked it down via YouTube. Concept videos can be unintentionally comic. You can tell from this one it was written in the era of suspenders, white shirts and ties in the office. That's just about the time of the start of HP's shift-to-Unix campaign. And the HP 3000 and other product names are never used. Unlikely to be named, the 3000 just works.

This just-works ideal still lives in the 3000's heritage. A couple of interviews from industry veterans like Ron Miller of Amerigroup and Paul Edwards referenced that reliability pledge. Both said that when the 3000 just worked, the computer was demonstrating its strongest asset. Compared to the alternatives at the start of 3000 service, the MPE ideals must've seemed as far forward as a 1995 vison which was devised in 1989.

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Finding HP's MPE Patches and Papers

FrescheFaceSpeedware has become Fresche Legacy this year, but the vendor's still got its storehouse of HP 3000 documents, white papers and even HP patches available online. You just have to poke directly at the pages you want to hit.

When it became Fresche in the spring, the company put a new face on its website. For awhile it was tough to hop into any HP 3000 page from those Speedware days. But a direct link opens the path to documents which are not found many other places on the Web. HP-authored MPE whitepapers, for example.

The company announced this summer that it's just booked five outsourcing agreements with North American companies worth more than $10 million. These are application outsource contracts -- the sort of business resource which Fresche Legacy continues to offer in the 3000 marketplace.

However, there's still a good deal of resource online from the many years when Speedware was an HP Platinum migration partner, as well as a supplier of migration software such as AMXW. That software's still available today. The HP 3000 paper and patch site has a front door of www.speedware.com/HPe3000_resources

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HP's advice on passwords: Got C, but no IA

HP Ent Cloud SecurityAs 3000 users move out of their protected and obscure MPE/iX, they encounter more virulent environmental waters. Never mind the malware and spyware aimed at Windows and Macs. (Yes, Apple systems are targets, although few have been hacked en masse). This weekend's big story from popular blogger Mat Honan revealed he got his Gmail swiped, his Mac and iPad wiped remotely, his Twitter account heisted, and his iPhone hijacked. All in a matter of minutes because one password, off the new Apple iCloud, was stolen.

This kind of perfect storm happened because the blogger had plenty of computing systems protected by a single password. By coincidence of course, HP released an the HP Technology at Work IT business eNewsletter that suggests some good password practices. But it starts out with bad advice.

"Try putting your hands on the keyboard and just typing randomly -- a gibberish password can be very secure." This sort of consumer-grade instruction bypasses two of the three security requirements for passwords in the industry.

"There is an acronym in the security world: CIA," says Steve Hardwick, a CISSP pro whose current mission is security for the pre-payment systems at Oxygen Financial. "That's Confidentiality, Integrity, Availability. So the HP advice is true on one count, but not all of them. This is a very common security mistake."

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Win for HP-UX's Present No Proof of Future

 

3000 Renaissance '95
My 3000 victory announcement of 1995 (click for detail)

 

Over at the headquarters of HP's Business Critical Systems division, the streamers and sighs of relief float in the air this week. A court of California has ruled that Oracle must continue to do business with HP just as it always did. That threat of killing off its database for use on the Itanium systems -- as therefore, HP-UX -- was an empty one if Oracle follows the law and the ruling of a judge.

The HP 3000 had a similar close call more than once in its life. During 1993 and 1994 HP was hammering away at the core of the 3000 customer base. It used R&D managers and GMs to convince leading app vendors they'd be better served by porting to HP-UX. By the spring of '94 Adager organized a Proposition 3000 movement (like the California propositions, all numbered) complete with fine embroidered t-shirts. We wore them to the Interex Computer Management Symposium and lashed at the HP managers on hand.

Soon enough, sense seemed to prevail at HP. A revival of the tech investment began that brought out a better database, moved the system into the open source and Internet world, attracted new customers through the likes of Smith-Gardner ecommerce, and generally swung the sales meter upward. In the middle of this trend we started the NewsWire to spread the word about that year's renaissance.

But HP was a vendor with its own mission. A success in rebooting HP's 3000 business was certified by new sales, right up to the year Hewlett-Packard sounded its swan song for 3000 futures. We had won the battle with HP, but the damage was done with an internal wound. And so goes the same song for Oracle and HP-UX, and probably the future of that operating system inside HP this time. Oracle backs away with this court ruling. But this week's win delivers no proof there's a healthy future for Oracle's HP relationship. You cannot force a company to do business differently, not even if there are tens of thousands of customers who desire the same kind of love they've had for decades.

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HP wins lawsuit ruling against Oracle

PartyhatsAfter more than a year of accusations, secret document dumps, and a glut of suits and countersuits, HP has a victory in its lawsuit against Oracle to save the Itanium servers. Hewlett-Packard didn't paint the suit in the Superior Court of Santa Clara County California as a battle for Itanium's future. But in winning the ruling from Judge James P. Kleinberg, HP will force Oracle to keep selling and porting its database for Itanium servers. Oracle believed that a clause in a lawsuit which settled hiring away Mark Hurd didn't force Oracle to stay in the HP market.

Oracle said it will appeal the ruling immediately. The next step of the lawsuit is to bring the matter in front of a jury to determine damages Oracle must pay HP. Hewlett-Packard estimated it would have lost $4 billion in HP-UX and Integrity business if Oracle had won. Much of it was calculated in support fees.

Legal and industry analysts, as well as members of the 3000 community, are not completely convinced this settles the future for Oracle on Itanium. The judge noted that Oracle and HP were once close partners. Kleinberg noted in his ruling that both companies made a lot of profit for many years working together. It all began to unravel in the spring of 2010, after the former HP CEO Hurd was cleared to take a systems leadership job with HP's rival Sun/Oracle.

Oracle must port its products to Itanium servers without charge, the judge ruled. Oracle said it decided to dump Itanium and HP-UX because it believes the chip is approaching its end of life. Oracle didn't say that about HP-UX. But the operating system only runs on Itanium servers by now, unless a company's got older, PA-RISC-based servers.

Alan Yeo of Screenjet, a provider of tools and services to modernize legacy interfaces on the 3000, believes HP isn't going to extend the HP-UX lifespan very much as a result of a court ruling. "HP don't want to be in the operating systems business anymore," he said yesterday. "That's not where they're going."

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Just how good were those good old days?

NewsWire subscribers who receive our email updates have heard that I'm collecting stories about the early 3000's days. I'm working on an autobiography of the 3000, written "as told to" me, by the system. I've fielded phone calls and gotten some nice email stories. Today's was great fun to read and instructive, too. That's because the negative experiences in our lives are remembered clearer than the positive ones. 

What I mean to say is that war stories are more fun to read, chock-a-block with details. Before I offer an excerpt from today's story, I want to make an observation about the 3000's life. It wasn't always the better time we prefer to remember.

Even the president of the Connect user group falls prey to this memory. In his column in the latest user group magazine, Steve Davidek remembered days when HP was packed with people eager to service a 3000 customer. After a disk head crash in 1984, Davidek recounted three HP employees he knew by name who chipped in to resolve the problem. A different time indeed, when Davidek managed just one Series III HP 3000.

Our HP sales rep would visit every month or so just to see how we were doing. Some months he'd even bring a Systems Engineer along to check on things. It was amazing.

Dave Wiseman, who says that "Most of you will know me as the idiot dragging the alligator at the Orlando conference, or maybe as the guy behind Millware," told us a tale of days even earlier in the 3000's life. Buying a system from HP in 1978 meant investing in a terminal to test your application -- before HP would even fill the system order.

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HP proprietary versus commodity hosts: Unix v. MPE

Analysis is spreading about HP's mission for its last in-house computer environment. Hosting will be moving for HP-UX. This is happening at the same time as hosting is on the move for MPE/iX. One distinction is the hardware platform. One is ready now, the other a good while later. You might guess wrong on which is which.

On the HP-UX, there's much work to be accomplished to get HP's Unix onto the Intel Xeon/x86 chipset. No, the entire OS is not on the move, not like MPE/iX is gliding onto Intel i7 multi-core chips. HP's working to get the best of its Unix running on a hardened Linux. The combination will be served from a customized configuration.

At the ServerWatch website, an article quotes the head of HP Industry Standard Servers, who says Unix now moves forward on x86.

The effort will eventually lead HP to favor x86 and Linux over Itanium and Unix, according to Scott Farrand, vice president of Industry Standard Servers and Software in the Enterprise Group at HP.

"Our go-forward strategy for mission-critical systems is shifting to an x86-based world," Farrand said. "It's not by coincidence that folks have de-committed from Itanium, specifically Oracle."

In the same manner, MPE/iX is also moving to x86. The Stromasys HP 3000 emulator, HPA/3000, is running on industry standard PC hardware. It was not demoed on that kind of system in its most recent appearance. The CAMUS user group saw the emulator perform flawlessly running on a custom-built PC. It's the kind of system we once called a white box. By now you might call it Build To Order, if there was a major vendor's label on the front.

It was convenient to use a BTO or white box PC to show off HPA/3000. But users of this solution won't be trying to save $500 building their own PC configuration when they spec up an HPA/3000 host. They're going to want to go high horsepower -- just the right decision considering the $25,000 price of this solution. The genuine and lasting value here is the software.

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HP's deepest woes: ahead, or just behind?

Trench-warfarejpgThe financial press is treating the HP 3000 customer to a full spectrum of Hewlett-Packard analysis by now. At the close of June 25 trading, the company's stock was at a seven-year low of $19.55 per share. (And that November, 2004 price was four years after a 2:1 split.) The price is tied to market valuation and makes this vendor of 3000 migration replacement systems a more attractive takeover target. This is no longer just a matter of HP's employees keeping fair value in their retirement accounts.

But HP's been within 10 percent of this newest low before, even within the last year. How much this should matter in selecting a replacement enterprise system -- well, it depends on who you're asking. Even the customers have views on this, although the ones making their stand on the 3000 have been more eager to speak up.

In response to one report on an HP breakup, which said even last summer "the reality is that Itanium is dead, dead, dead," Tracy Johnson said circling sharks wouldn't bite on HP's morbid tail. Sharks like Oracle haven't been imagined in HP's waters.

"Is it really a matter of Itanium, or any other product line?" Johnson wrote on the HP 3000 Community at LinkedIn. "HP is already the walking dead. It's not the sharks; sharks prefer live prey. It is rather the vultures and jackals that feed on carrion that will pick on HP."

Strong sentiment, but not unusual among the customers which HP left behind to maintain systems and an ecosystem without vendor assets. However, the business finance community has a few analysts who see this week as the deepest of HP's stock troubles. Some are believing HP's now got nowhere to go but up.

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Oracle's legal jousts missing Media's marks

MediaGeneralLogoHP and Oracle have been squaring off in court over the future of the database on HP's Unix servers, jousting since the first week of the month. But after a break on Wednesday to attempt to settle the battle out of court, these two companies were back at it after talks crashed. Oracle's got HP's database futures in its hands, and testimony from its executives asserts those hands have crimping sales of HP's Itanium Business Critical Servers.

But that's just not enough to keep the attention of some Itanium owners. One migrator is already heading away from HP's Unix and onto Oracle's Unix. But the death-knell that Oracle wants to spread about the HP-UX platform isn't spooking Greg Barnes.

Barnes has an 3000 background that dates back to MPE III, but his company took its time getting away from 3000s. Media General, which agreed to sell off nearly all of it newspapers to a Berkshire Hathaway subsidiary, was using publishing software from Collier-Jackson until the late 1990s, when the shift started off 3000s. Barnes said the Oracle jabs didn't rattle him a bit in HP Unix management.

"I'm not aware that the snipe-fest had any effect whatsoever," he said, while reporting on the company's in-house migration to the Itanium servers. "Like much of the death knells I’ve read over the years, I have better things to ponder." Among his new interests are Oracle's direct competitor to HP-UX, Solaris. Media General is now phasing out the five HP-UX systems left in its datacenter. It's also focusing on its TV business, post-newspapers.

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Is HP porting HP-UX to Xeon, or not?

MegWhitmanCoverJust as soon as it seemed obvious HP's Unix was going to run only on its Itanium processors and the Integrity/Superdome servers, new data has emerged to change that limited future. HP CEO Meg Whitman was interviewed as part of the Wall Street Journal's All Things D conference last week. She tossed off a message that HP-UX is on its way to the Intel Xeon processor line.

"She also said that HP will create a version of HP-UX, its version of Unix that will run on Intel’s mainstream server chip known as Xeon," reporter Arik Hesseldahl wrote in Hewlett-Packard CEO Meg Whitman Has a Lot to Say. Drilling into the text of the interview, the HP CEO seems to acknowledge that Project Odyssey and a Xeon-native HP-UX are two distinct projects.

We have a lot of customers on Oracle Itanium who... do not want to get off of HP Unix and on to something else. And they kinda like what they have and they’d like to stick with it. I think either way, [the VP of HP Servers, Storage and Networking] Dave Donatelli’s got in the works the next generation of Business Critical Servers on a more open platform. It’s called Odyssey, which is pretty cool. Ultimately we’ve got to build Unix on a Xeon chip, and so we will do that.

"We've got to build Unix on a Xeon chip" means something very different from Dave's Odyssey. The first is a project that HP calculated at $100 million in costs five years ago. The Odyssey takes the best of HP's Unix and puts it into a "hardened Linux" from SUSE. Long before Whitman got to HP, Hewlett-Packard managers at HP SSN decided that the $100 million port was a non-starter. It all reminds me of the no, then yes, then no dance of MPE into, then out of, the Itanium architecture. HP called it IA-64 back then. It used a TV broadcast to its offices to step back from IA-64, then relented a few years later.

But having a CEO confirm a business unit-level project can be scant assurance, especially while talking to anyone but internal HP executives. Carly Fiorina once pledged fealty to the 3000's future, after all.

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Chief Meg roars out HP's future at Discover

While the HP Discover party animals rock out to Don Henley and Sheryl Crow tonight, a swan song rings in their ears. HP CEO Meg Whitman sang off the grow-to-be-big era of Hewlett-Packard at the annual show of HP and its partners. About 10,000 were on hand in Vegas, but only a modest fraction of them heard the notes of a coda to consumerization strategy. HP will pivot to IT pros even while its consumer operations retract. It will be quite an act to observe, worthy of anything in the zoo of Madagascar, to see the needed cash emerge for overdue R&D.

MegandAlexHP will still sell its products to the world at large. Whitman said he loves HP's printers, and she decided to hang onto the PC unit after HP tested the concept of a spinoff. But she's calling a tune that leads Hewlett-Packard back to business computing. The company is so far off that track that Whitman is calling the new strategy a turnaround, one that's going to take years to finish. Longer than your average Dreamworks animated feature takes to draw and render, using HP's systems.

Meg's keynote, complete with a finale from a cartoon lion, wasn't viewed live by all that many working on the busy expo floor, each trying to connect with as many prospects as the three days would allow. CEO speeches are given for big customers who don't need to see things at an expo, the analysts who tell these customers what to think and buy, and user group officers and volunteers. They shouldn't expect overnight change, which may disappoint the investors who put money behind a company that has been getting bigger for being the sake of No. 1, ever since Carly Fiorina became the first non-HP CEO in 1999.

"Most turnarounds in American industry are anywhere between four and five years," Whitman said. "And we’re at the beginning of the journey, not the end of the journey." HP's been bleeding new business and seen its stock at five-year lows at the start of that turnaround. The shares are down 8 percent since she took over nine months ago. This was her first HP Discover keynote.

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Why HP Financials Should Remain Relevant

NewsforHPQ

File this article under News You Can Use. I'm about to make a case for why the quarterly reports of Hewlett-Packard -- a company posting more than $125 billion in annual sales -- should still matter to you. If your job is to plan IT resource deployment, like who's learning what skill or where investments go in 2013 and beyond, HP's reports remain relevant.

We've been dividing ourselves into two camps since late 2001: those leaving the 3000 and those remaining. For the ones who are leaving, or have a migration right behind them in the rear-view, HP's profile in 2012 is even more important than it was a decade ago. Hewlett-Packard is probably driving your technology and services choices. The success of adopting its products in Unix, Linux, servers or even the cloud gets reflected in HP sales numbers. And HP still announces strategies when it talks to securities analysts.

As an example, the CEO Meg Whitman told employees in a letter yesterday, prior to the quarterly results release, that this round of 27,000 layoffs is going to be different from layoffs of 2005. "Another difference from years past is what we plan to do with the savings," she said in her letter. "The majority of savings [via employee cutbacks] this time around will be invested in the business. We'll be investing to drive leadership in the three strategic pillars – cloud, security and information optimization."

HP drove its previous layoff savings right out to the shareholders, not the customers. As a continuing customer of HP products, these words of investing are finally those that you want to hear. Cloud has little to do with HP's consumer business. Same for security and information optimization. This is an enterprise play on a field where HP is way behind, by Whitman's own scoring.

Even though HP stock hit a 52-week low before her comments, today it's having a relatively good day. The investors just got told they won't see direct profit increases because of HP's changes, and its okay with them. Like you, the majority of them have got a long-term relationship with Hewlett-Packard. Of course if that's not true for you, then getting your homesteading choice reinforced makes the quarterly results relevant, too.

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HP to cut 27,000 jobs, reports 24% profit dip

ESSN Q2 2012

 

Hewlett-Packard watched two indicators drop during its latest quarter, and then pushed a third number downward on its own. Company revenues fell 3 percent in HP's Q2 of 2012, while profits dropped 24 percent versus last year's second quarter. So while HP dispensed the sour news of its quarterly report, it also announced it would cut 27,000 jobs over the next two years. That's 8 percent of its workforce, the largest cut since the 10 percent layoff of 2005 when 14,500 jobs went on the block.

The company said it will save up to $3.5 billion yearly by the time these layoffs are complete in October, 2014. HP's current yearly revenue rate is about $120 billion, so the 8 percent job cuts will yield savings of less than 3 percent of revenues. But that $3.5 billion is a chunk of money equal to 40 percent of last year's profits. The company says it will invest in "research and development to drive innovation and differentiation across its core printing and personal systems businesses, as well as emerging areas." HP said the moves are a "multi-year restructuring to fuel innovation and enable investment."

The cutbacks are going to cost HP in the short run, a total of $1.7 billion within the next six months. The last time the company cut back this deeply, it was an enterprise of 144,000 employees. In spite of those 2005 job losses, Hewlett-Packard now employs close to 350,000 people worldwide. CEO Meg Whitman said these cuts "are necessary to improve execution and to fund the long term health of the company."

The enterprise computing operations at HP, which include replacement systems for migrating HP 3000 customers, came in for special mention in the layoff announcement. The company plans to drive some of the saved money into more R&D.

Enterprise Servers, Storage and Networking (ESSN) will invest to accelerate its research and development activities to extend its leading portfolio of servers, storage and networking. Together these assets create a Converged Infrastructure which is the foundation for top client initiatives such as cloudvirtualizationbig data analytics, legacy modernization and social media.

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A 3000 plucked barren of IMAGE never flew

"Options offering a lower-priced version of the Series 920 server, without database software, are available on the July HP price list."

With those words, HP went to war on the wings of a bundled database. IMAGE was not only the heart of the 3000's value. IMAGE had become the rocket fuel of the 3000, a constant in a formula that produced better transaction values than anything offered by Hewlett-Packard. Or elsewhere in the industry.

PluckedBut HP didn't know how to sell it. You can read as much at hpmuseum.net, where a July Channels newsletter about the "confusion" over 3000 pricing was being cleared up. Sort of. "Our objective is to price the HP 3000 systems at a price/performance advantage for transaction processing over our HP 9000 family." Fair enough. But then "We anticipate that much of the confusion regarding price/performance may have been caused by the higher prices of the HP 3000 version of a PA-RISC processor."

Except there was no such version. The same chip was used in both 3000 and 9000 server. HP had just locked the 3000's software to the higher prices. There was a version of prices that was higher, to be sure. So HP looked around for what it could clip from the 3000 value. It tried IMAGE for a month or so, until its partners and customers revolted in public, in the lap of the industry press.

Unbundling databases became the norm for the classic business computing vendors, even through the HP 250 Business minicomputer included a version of IMAGE when HP brought it out in 1979. A good thing, too, for current business computer users who are planning or deploying a move away from the 3000. The HP 250 gave wings to Michael Marxmeier and his Eloquence database, starting in 1987. It's the only drop-in replacement for the 3000's IMAGE, using its TurboIMAGE compatibility mode. Eloquence is also getting a turbocharged full-text search ability this summer. The open beta test program for 8.20 just started; full release is in July.

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