Right now it appears to be thinking big, just like HP's financial plans. Each 90 day period HP tries to better the orders and profits it set in the previous fiscal year. Expectations ran so high for this quarter than even though HP posted $784 million in profits, shareholders sold the stock down 10 percent the next day. That's how crazy thinking big can get -- even when you're highly profitable, it's not enough. HP must have felt like it was being told to show up for free-throw practice the day after it won the NBA title.
While shareholders pressure HP to think big, it would do some good to look at the merits of small. Analysts have said that with its latest reorganization, HP was remaking itself into a juggernaut like IBM -- a global company capable of withstanding market pressures. The trouble with being a juggernaut is that you often lose the ability to maneuver toward opportunities.
Ability to maneuver depends on the size of your ship. Turning a battleship in a bathtub might be easier than getting CSY to create a small HP 3000 that any developer can afford. Instead, all of the new system action is on the other, high end of the HP 3000 line, where healthcare companies and direct mail operations want to buy big 3000s. Rest assured, those customers will get what they want with little kick from CSY. It's the rest of the installed base that needs a little HP 3000.
We've been through this exercise before. A development-sized HP 3000 would provide all the advantages of any other 3000 except for the ability to support more than two users. The object is to lower the barrier of acceptance for a small developer who's already strapped getting a small businesses started.
Gee, there's that word small again. Here at the NewsWire we believe in small, because it's the most accurate word to describe our company and what we're been doing for almost two years. Small businesses take risks and offer services that larger organizations wouldn't. There's just one source of HP 3000-only news outside of HP's internal organs -- because the numbers involved in exploiting a mature, rich niche market like the 3000 would make larger publishing companies blanche. Being small and focused makes the NewsWire possible.
It also makes HP 3000 solutions possible. Some of our favorite suppliers operate companies with less than 20 staffers. Some don't even have a dozen. And yet their products are praised and more integral than anything that an SAP juggernaut ever would offer.
Those who are small take risks and act quickly because they know it's their advantage against the juggernauts. And small is the kind of software developer that CSY needs to start courting if it is to start the flow of applications running back toward MPE. An HP 3000 system founded on the Series 700 workstation hardware would do the job, provided it was supported by low-cost support plans and software bundles. The last time we checked, all of HP's competitors were offering such products. Even HP does, but only on its HP-UX systems.
HP talks about the expense of making such a system as unjustified against the potential sales. There's re-engineering to be done to make that Series 700 hardware work with MPE/iX. Well, we think these kinds of costs need to be written off in HP's marketing budget, not against its R&D expenses. In the long run, the only thing that will keep HP's orders for 3000s moving is applications. Everybody agrees on this, but we haven't heard much of an initiative for getting it to happen.
What we have heard from one HP executive is that applications from very small companies -- the kind that would really appreciate a break on a development system and support -- aren't appropriate investments for HP 3000 customers. We couldn't disagree more. If big companies are all that's left, innovation and risk-taking are bound to become casualties of that shareholder madness.
The other place a small HP 3000 could make an impact is as an alternative to the PC. There are many places where a Windows 95 PC network can be the most appropriate tool for the job -- document processing and graphics-laden computation come to mind right away. But there are many places where companies are using PCs simply because they cost less than anything else. Or they think they do. That kind of use for PCs, like in order entry for small workgroups, costs lots more because of the complexity of management. Since the cost is hidden, it never gets counted against the PC solution.
A low-cost HP 3000, with software priced at PC levels, could deliver an alternative. Right now the price difference between an HP NetServer and an HP 3000 Series 918 is less than a few thousand dollars. But many companies don't think it's a reasonable alternative to use that 3000 for small configurations that serve new business needs. The roadblock could be the lack of applications. If a small 3000 packaged as a four-desktop workgroup existed, perhaps more applications would become available. It takes market potential to drive development. Oh yeah, and you need that developer-sized HP 3000 for the companies willing to take the business risk of making MPE applications.
Both inside HP's sales force, and outside among its resellers and customer base, people are wondering how long CSY will rely on the 918 as its entry-level, low-end system. Since the 918 was introduced, the rest of the HP 3000 line has had several more powerful processors installed. But CSY seems content to sell the 918 and 928 well into the next century. They might be selling many more HP 3000s if a more powerful, less costly option for the small workgroup was available. At the very least it would be an alternative to trying to make Windows NT behave like a secure and stable operating environment. To make that kind of magic happen today, you need to sit beside your Web browser, waiting for the latest Microsoft patch to plug up the latest NT security hole.
The HP 3000 was an alternative in the beginning of its life, a way to use less MIS resources to get more done than IBM batch systems could do. Recently we counted POs for a dozen "908" class systems posted out on the Internet. Those are orders that won't be placed for HP's NT systems, or its Unix systems. In these days when HP says it's looking for opportunities to get orders growing again, thinking small could be the start of something big for the HP 3000.
-- Ron Seybold