CEO keynote speech recalls HP’s choices

Analysis by Steve Hammond

Do you remember the school yard ritual of choosing sides?

It was the picking of teams before a game of kickball, dodgeball, baseball. I was a good enough athlete that I was never chosen last, but I still remember the dread of that possible humiliation. And the image of the look on the face of the kid who was chosen last, or not chosen at all, is still burned into the deep recesses of my main storage.

I now know how that kid felt.

I made a point to attend Carly Fiorina’s keynote speech at the HP World 2003 conference at the Georgia World Congress Center in Atlanta. I felt it would be an opportunity to hear how we fit into the future of HP. “We” does not mean the Hammond family. “We” means my employer and the computing environment we created and I help maintain, an environment that includes an HP 3000 and four HP 9000 servers. (Point of disclosure: We currently pay nothing to HP for support, but three of these servers still play a significant role in our environment.)

I felt 2003 would be a good year to hear from the HP CEO. Having heard Lew Platt deliver the keynote at past Interex and HP World conferences, I was hoping to hear some good news in 2003. After the bitterness and anger at the 2002 conference, 2003 would be a chance for Fiorina to lay the groundwork for a new foundation of trust between HP and what once was one of its most loyal constituencies. Instead, they picked the whole kickball team and the 3000 users, some of us who also use HP 9000s — were left standing on the sideline.

After a short introduction, Fiorina stepped out from behind a curtain to address the crowd of over 2,400. She wore a tailored, tan pantsuit, sporting her “low maintenance” hair. (Earlier in the month, when asked if the rumor was true that she traveled with a personal hair dresser, she pointed to her coif and stated, “This is low maintenance hair.”)

Over the next 40 minutes, she gave a dynamic, informative speech. As an HP shareholder, I liked what I heard. But as an 3000/9000 user, I heard nothing about those platforms. And aside from an occasional laugh — including one she evoked when she wanted to “make sure you’re awake out there” — the crowd remained respectfully unresponsive — no breaks for applause, no gasps, nothing.

This was a speech that seemed to be an amalgam of speeches for CEOs and stock analysts, not a technical show audience. And the speech contained no announcements, no blockbusters. So there was no reason for anything but a quiet, respectful audience.

She did obliquely refer to the merger, in a way of pointing out how HP was trying to keep an eye on the customer. “A customer told me ‘This is your merger, not ours,’ ” she said. “It was [the customer’s] way of telling me that we needed to separate the merger from providing for our customers.” Fiorina also took time to deride Dell, saying that “they’re a distribution company, not a tech company” and noted she felt it was significant that Dell had “just changed its name from Dell Computers to Dell.”

Fiorina drove home the point that HP is a tech company — offering high technology at a low cost with the best customer experience with the greatest technical agility. She opined that “Technology is now mission-critical. The healthcare crisis will not be solved without technology.” Then she told us “Everything we are about and everything we do starts and ends with our customers.” We “ask that our customers be demanding and loyal.”

That comment hurt. I realize that this was a new HP World conference with the Compaq Encompass users group in attendance, so loyalty to HP is new for some of this crowd. But definitely five years ago, and most likely as recently as HP World 2001, you would have been hard-pressed to find a more loyal HP constituency than HP 3000 users. Now the hardware and the OS are scheduled for end-of-life, and we’re being asked to be loyal.

During the week of that speech, HP under Fiorina’s leadership appeared to be strong. But just a week later, the future was not as rosy. HP announced its third quarter earnings were not as good as expected, news that drove the Dow Jones average down while HP’s shares led the stock exchange in volume during a 10 percent selloff. Complicating the day was the news that a unit of Deutsche Bank AG unit had agreed “to pay $750,000 (a fine to the SEC) to settle charges that it neglected to inform clients about a conflict of interest when it voted its shares in favor of HP’s acquisition of Compaq.” Making HP’s Dog Day of August complete was the announcement that the company would lay off another 1,600 employees.

Those of us who invested so much in the MPE world may feel some sort of Pyrrhic victory from such news. We are left holding an unplugged cable, but HP at the moment is feeling considerable pain of its own. The computing world has changed, and HP is trying to move forward with it — and the concept of much-touted Adaptive Enterprise fits well into that evolution. Maybe it was an act of “tough love” to cut the MPE umbilical and force the 3000 world to look in other directions. But a lot of people felt and still feel that MPE is a vibrant and dynamic operating environment that could and will, under OpenMPE, function in the new computing world. Why didn’t HP see that?

Toward the end of the speech, Fiorina told the audience that “You should demand more accountability, more agility and a better return on your investment.” That’s right, we should. So let’s talk about that.

Two years ago, Winston Prather stood in front of this same conference in Chicago. He told us how work had started on HP 3000 servers using the latest PA-RISC processors. He told how CSY was working hard with channel partners to be successful. At the same conference, Ann Livermore told us how they were offering new solutions with greater performance that were ideal for complex data management and Web-enabled applications. She said, “For those of you who want to continue operating with your 3000 MPE environment, we think this is very important.” HP CTO Rich Demillo, when asked about the role of Linux in HP’s company strategy at the same conference said HP “isn’t getting out of the Unix business, isn’t getting out of Windows, isn’t getting out of MPE/iX.”

Those of us who attended HP World 2001 started making strategic plans and budgets and programming assignments based on those statements from HP executives. Three months later, HP was no longer working on beefing up the 3000 hardware; complex data management and Web-enabled applications on the 3000 were not very important; and they were getting out of MPE/iX. Can we demand some accountability for those commitments? HP did show agility, dodging this loyal user base.

And as far as loyalty goes, I heard more than one vendor say they had attendees at this year’s conference tell them that their management had mandated they would not buy anything from HP again. Actually, the phrases they used were far stronger than that. Seems like some feel that their return on their investment in 3000 has not been terribly good.

HP supporters can say I have picked small parts of a 40-minute speech to make my point, and they are right. But I think I speak for a lot of 3000 users who feel that we were loyal and have been shuttled to the sidelines.

Fiorina’s well-delivered speech told us how strong HP should be in the future, but I still feel the company would have been stronger with us than without us. I guess we’ll just wait here on the sidelines while everyone else plays HP’s kickball. But you know what? The next playground over, Dell, Sun and IBM have their own kickball games going on — and they waving to us to come over and play.