Editor's Note: HP Takes A Risk In Getting Rid Of RISC
Good things come in small packages. It's as true in the computer industry as in gift giving. In the big world of business technology, where billions of dollars are invested in systems that support trillions of dollars in commerce, the microprocessor is a lightweight device with a ton of influence.
In fact, the future success of "the new" Hewlett-Packard's product road map is largely dependent on this little issue, the subject of this week's cover story by senior writer Aaron Ricadela. The logic of combining HP and Compaq Computer, a deal that closed four months ago, is that the companies will be able to capitalize on product-line synergies and strip out redundancies. Among other things, that means narrowing the variety of microprocessors found in the guts of their systems, with RISC on the slow-but-sure way out and Intel's 64-bit design taking its place. From HP's point of view, the move makes perfect sense. Dollars saved on microprocessor development can be redirected toward newer innovations or drop to the bottom line that's being watched so carefully by investors.
For HP's customers, though, the chip flip is no small matter. Many have spent years and millions of dollars building IT infrastructures that run on RISC systems from Digital Equipment Corp. (acquired by Compaq in 1998), Compaq, and HP. They've grown to love the performance and reliability of these systems, which some of the newer "industry standard" (that's code for Intel-based) systems have a hard time matching. What's more, their business applications were written to run on RISC systems, so the bond is more than an emotional one--code is actually tuned to RISC systems.
To its credit, HP has provided its customers with a detailed road map and is offering a migration path that gives them years to make the eventual move. But there's no way around the fact that those customers are being forced to contemplate the long-term viability of their installed RISC systems at a time when most companies are under pressure to get more years out of their systems, not less. As Compaq customer Joe Pollizzi puts it: "This is a time when every organization is going to face a choice: Are they going to stay with HP, or are they going to move?"
The new HP may become wildly successful, with industry-leading products, brilliant innovation, and sharp execution. But much depends on whether customers say, "See you later," to HP's CPU strategy. There's risk without RISC.
The Business of Going DigitalDigital business isn't about changing code; it's about changing what legacy sales, distribution, customer service, and product groups do in the new digital age. It's about bringing big data analytics, mobile, social, marketing automation, cloud computing, and the app economy together to launch new products and services. We're seeing new titles in this digital revolution, new responsibilities, new business models, and major shifts in technology spending.