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May
2002
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HP executed its merger with
Compaq, but few products died yet
After winning a three-day trial in Delawares Chancery Court over its merger ethics and practices, HP beat its drum on May 7 by announcing the first details of its product lineup. Most notable to HPs 3000 customers was a less public announcement. An internal memo from Scott Stallard, who heads the Business Critical Systems (BCS) global business unit inside HPs Enterprise Systems Group, reports HPs MPE/iX development labs are now part of an HP support division, known as the Total Customer Experience and Support Division (TCSD, for those of you who want to follow on your post-merger scorecards). The memo was part of a story leaked by Computer Reseller News one day in advance of the official merger announcement; HP hadnt been able to respond to us by the FlashPapers deadline to confirm the movement of this biggest part of the 3000 communitys remaining HP assets. CEO Carly Fiorina said that with the merger approved, its now time to execute. HP proceeded after Walter Hewletts lawsuit was dismissed, and the former board member (HP dropped him when he filed suit) said he wouldnt appeal the ruling. A Delaware judge heard three full days of testimony from Fiorina, HP CFO Bob Wayman and several managers of shareholder Deustche Asset Management, but the judge concluded in a 44-page finding that HP didnt violate any laws while winning a 2.9 percent margin of victory. HPs statements about the mergers potential were not out of line with reality, according to the judge. Preliminary reports from HP merger planners casting doubt on the proposed numbers are not required by law to be aired for shareholders. Only the ethics of some managers at Deustche which changed its share votes at the last minute to provide more than a third of the 45-million vote margin were called troubling by judge William Chandler. A well-publicized voicemail between Fiorina and Wayman, where the CEO said HP might have to do something extraordinary about Deustches impending no vote, didnt provide enough of a smoking gun for the judge. I do not believe that Fiorinas voicemail evidences an intent to employ improper means to persuade Deustche Bank to vote in favor of the merger, Chandler wrote in his opinion. She meant that HP management needed to take the steps necessary to gain an audience at Deustche Bank for HPs presentation in favor of the merger. Chandler said it was improper for the Deustche asset managers to be in a conference call with HP that was arranged by the banks line of credit managers. But the judge said he didnt hear any evidence that proved Deustche was on the last minute call in response to a threat from HP management to withhold future business [from Deustche]. The judge also noted that eliminating the Deustche shares still wouldnt swing the shareholder vote outcome. HPs May 7 announcement of its product plans did not mention the HP 3000, but the divisions manager was among those named to new jobs in that memo from Stallard. In the unconfirmed memo, 3000 division chief Winston Prather will now head HPs High Performance Technical Computing Division; its not yet clear if hell keep his CSY duties at the same time. Meanwhile, the memo identified Barbara Bacile as the head of the division where the MPE labs will live on, at least for a few more years. The memo said that TCSD division is the former HP Customer & Supportability Technology Operation, and they will manage total customer experience (TCE), quality, business escalations and diagnostic tools for HP-UX software and hardware. To ensure long-term success of HP e3000 customer satisfaction, the MPE i/X lab will also join TCSD. Another proprietary operating environment didnt get its walking papers in the new HP plan, however; Compaqs OpenVMS customers using the proprietary operating system developed by DEC will see HP deliver on the previously announced Compaq OpenVMS roadmap, including the port to Itanium. The VMS community wants a much stronger promise of its future than what HP has offered.
Compaqs
NonStop fault-tolerant systems survived the cut, one of many Business
Critical Systems products to be marketed by Mark Hudson, who has led
HP 9000 marketing for years and now gets to market products from
Prathers new division, as well as deliver a consistent
and compelling message on HP servers. HPs NetServer
brands will be soon gone; Compaq PCs will be sold under the ProLiant
brand to businesses, while the Pavillion PCs are now a consumer-only
product. Compaqs printer business will be merged into
HPs, but HPs Jornada handheld systems next year will be
just as discontinued as the HP 3000 thats to say no
longer sold, but still working fine.
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