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Jonathan Feldman

Jonathan Feldman

Contributing Editor
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IW500: HP Answers Questions, But More Remain

Some CIOs were very worried about HP pulling a "Gateway" and selling the PC business to a less stable organization. This now seems far less likely--but other worries persist.

At the InformationWeek 500 conference Monday morning, HP's chairman of the board, Ray Lane, and Chief Strategy and Technology Officer Shane Robison spoke with InformationWeek Editorial Director Fritz Nelson and faced down an audience of CIOs with serious buying power. It was a great opportunity for collective damage control, since every single CIO that I spoke to shook their heads sadly when the topic turned to HP's recent announcements. I'd pointed out previously that HP needed to clarify its strategy for customers and its own employees alike. Did HP succeed Monday morning? Partially.

Lane made it very clear that HP has definitely thrown in the towel with tablets and mobile phones, saying, "We can't compete in delivering best of breed devices to consumers. Our focus is on business infrastructure." He referenced that even Apple has significant threats from overseas manufacturers. Why would HP want to play in that sandbox? Fair enough. But, I don't think that any CIO really cares whether HP is in the mobile device business. They care that HP has a clearly defined and easy-to-follow corporate strategy.

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If we haven't heard it enough through other channels, Lane said this morning that HP is not simply selling off its PC business. They're just "clarifying consumer position" and "focusing on data, not devices." He also said that they are totally committed to business infrastructure--meaning server, storage, and networking. "We will continue to invest in that," he said. But, he added, the personal system business is a completely different business model from the infrastructure business; it's "commodity versus non-commodity."

Lane says that procurement officers are making PC buying decisions, not IT staff. But I'm not sure I agree with this. Many times, it's true, commodity gear goes through procurement. But, in most corporate purchasing programs, at least non-dysfunctional ones, all else being equal, it is entirely possible for IT to veto a product because of concerns about supportability or manageability. Frankly, I am predicting a horrible next quarter for HP's Personal Systems Group based on conversations I've had with a number of CIOs whose staff has done just that because of the uncertainty created by last month's announcement. I hope I'm wrong.

The good news is that, based on some conversations after the session, I think that the audience seemed to absorb the notion that a spin-off is not a sell-off. I had previously communicated with CIOs who were very worried about HP pulling a "Gateway" and selling the business to an organization that might not be as stable, or one where the future of support might be in question. This now seems far less likely.

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What HP Still Needs To Do

In response to being charged with being unpredictable--largely predicated on last month's announcements that left huge questions in everyone's mind, Lane said, "Tech companies that become predictable, die." Fair enough. But while tech companies shouldn't be predictable, I've always thought that strategies should be. Unpredictable strategies have a way of driving off the road and into a ditch.

I'd like to see HP lay out a roadmap where it becomes pretty clear to enterprise customers exactly what won't be changed, and how the remaining portfolio of products and services will change over time. That doesn't seem completely unreasonable. I don't think CIOs expect or deserve the company's secret plans. But, instead of talking vaguely about how wonderful webOS is, and how it's the greatest development environment for mobile, simultaneously while talking about how HP isn't getting back into the device market, how about you tell us what the plan for webOS in the enterprise is? Or, maybe it's not part of the plan. In that case, spare me the lovefest about how wonderful it is.

Then there's the future of HP/UX. Nelson said, "Listen, we know we can't talk about the lawsuit with Oracle here, and you've made it abundantly clear that you are 100% a go with Itanium. But it's also equally clear that for customers, Oracle has placed a big cloud over that and, in turn, HP/UX." Nelson asked why HP hasn't capitalized on that and done promotions for HP/UX, to woo customers who would like to have an alternative to Sun in the data center.

Lane replied that there are HP/UX promotions (though I haven't seen one). He thinks that CIOs should be upset with the Oracle lock-in. "Sun was a dying platform," he declared, and "then Oracle bought it," allowing them to use the database to lock customers in to the platform. But that's not the point. The real question is, is HP/UX a growth platform for HP? Is HP practicing the old "milking strategy" where they put enough into it to sustain it, but don't really have a growth or innovation plan? If they really intend to do "big data," what platform will that big data analysis run on? Appliances?

Finally, I've had HP employees point out to me since my last column that there is tremendous professional service business that flourishes with sales of HP/UX. Is HP willing to give up growth and margin with their Business Critical Server group and spin-off professional services and consulting? Or will they, in Lane's words, "continue to invest in that." If so, HP needs to be specific and match words with action.

Lane did a great job of answering many critical customer questions this morning. And there's no doubt that HP has a credible and informed chairman of the board. But without a very specific roadmap that answer remaining customer questions, the uncertainty for customers and employees alike will continue.

Jonathan Feldman is a contributing editor for InformationWeek and director of IT services for a rapidly growing city in North Carolina. Write to him at or at @_jfeldman.

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Jonathan Feldman

About The Author

Jonathan Feldman is Chief Information Officer for the City of Asheville, NC, where he encourages innovation through better business technology and process. Asheville is a rapidly growing and popular city; ...Continued
Contributing Editor
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