HP's founding families will oppose merger
Analysis and Commentary

The battle for the future of Hewlett-Packard went public in a much bigger way last Friday, when the David and Lucile Packard Foundation announced it will use its 201.3 million shares -- more than 10 percent of the total number of HP shares outstanding -- to block the company's merger with Compaq. The foundation is the largest single owner of HP stock.

"The board of trustees understands the strategic considerations being addressed by management," said Susan Packard Orr, foundation chairman and daughter of co-founder David Packard, "but after thorough study and analysis, the board has preliminarily decided, on balance, that the best interests of the foundation would be better served by Hewlett-Packard not proceeding with the proposed transaction."

A failed merger is unlikely to improve the fate of the HP 3000 community's relationship with Hewlett-Packard. The belief that the 3000's ecosystem is declining is held at the 3000 division level, which acted on its own to start HP's support countdown. On the other hand, there's no evidence that a failed merger would accelerate that countdown. Decisions on 3000 futures have been reversed in many cases. Recall that the IA-64 support decision first came down as a "no" in early 1997, then rolled to a "yes" in the summer of 1998. Finally, CSY stepped away from that "yes" in announcing the end of its support for the HP 3000. While HP's top corporate leaders believe the merger is essential to the company's health, the prior generation of HP leaders -- now sitting on the Packard Foundation board in former CEO Lew Platt and former COO Dean Morton -- will dispute that belief with millions of shares.

Analysts and commentators were quick to anoint the foundation's decision as a major hurdle in HP's quest to acquire Compaq. The foundation's decision accelerated the resistance which began last month when sons of HP's co-founders Walter Hewlett and David Woodley Packard announced their intention to oppose the merger. Now about 18 percent of the total HP shares outstanding will vote against the deal, including shares held by the family foundations and the trusts which the heirs of the HP founders control.

HP didn't back away from its proposal in light of the news. Board members of HP and Compaq authored a joint letter in the San Jose Mercury News on Sunday, making a case for why mammoth changes in the computer industry make the merger the best course for HP. Dick Hackborn of the HP board and Thomas Perkins of Compaq's board wrote that their companies' biggest customers want mainstream solutions -- things the directors believe only a combined company can offer. "Our enterprise customers increasingly want to purchase integrated solutions, not individual products and technologies," the letter said. "They seek to benefit from the economics and flexibility of standards-based platforms and architectures." Shopping for individual technology is apparently not a choice which HP wants to support any longer. Hackborn resigned from the Hewlett Foundation board, saying that Walter Hewlett's proxy battle over the merger conflicts with Hackborn's belief in the merger. Hackborn had been on the Hewlett Foundation board for six years, and on HP's board since 1992.

HP and Compaq also released a statement after the Packard Foundation announcement, saying "We are disappointed by the Packard Foundation's preliminary decision. Nevertheless, our responsibility to shareowners, customers and employees requires that we maintain a pragmatic view of the business and a focus on the future. Our firm commitment to this merger stems from our conviction that it will deliver the industry leadership and earnings growth our shareowners expect and our employees deserve. Over the coming weeks and months, we intend to continue communicating its merits to our broad shareowner base."

Analysts doubt that shareowner base is broad enough. The majority of HP stock, about 57 percent, is held by institutional owners like the Packard Foundation. Already, about one third of that group has lined up against the merger. Of the non-institutional shares, HP says 25 percent is owned by retail customers, while HP employees hold about 3 percent in both retail and institutional categories. The company is working hard to sell the merits of the merger to that 3 percent in-house.

Compaq's CEO Michael Capellas released a memo to his company after the Packard Foundation's decision to block the merger, one suggesting that Compaq would survive regardless of the deal's fate.

"Regardless of the circumstances -- whether we are part of the new HP or a stand-alone company -- I am confident in our ability to achieve these objectives," Capellas said.

The impacts of a failed merger may hold layoffs for HP's staff, since the company says it cannot afford to take incremental steps to compete in the industry. But CEO Carly Fiorina said no rebound in the company's fortunes will occur in the first half of 2002, and "we cannot count on a rebound in the second half, either." Layoffs have become part of the HP Way in such an economic climate, something on the horizon whether HP succeeds in its merger plans or not.

One of the departures might be the CEO herself, if the merger fails. In a NY Times story, Fiorina said that a veto of the deal by shareholders "would say a lot about the board and management's credibility."

Fiorina didn't want to comment on what might happen if the merger didn't go through, at least not to the analysts she briefed when the fourth quarter results came out in mid-November. She thought then that "it's way too early to conclude this merger will not occur." But she did talk about what customers are concerned about through the merger struggle. "They are concerned about will we protect the investments they make between now and when the merger closes, in either Compaq or HP product lines. The answer is yes." The current set of choices for the 3000 community is to look for that product protection through migration to other HP platforms -- where discounts are available, but further purchasing and human resource expense will be necessary.

OpenMPE covers multiple angles for 3000's future

Discussion of technical strategies and business plans for extending the life of MPE began to fill a number of online forums in early December, as customers and some of the top developers in the 3000 community debated how MPE could outlive HP's support for the operating environment.

In messages sent across both the OpenMPE Yahoo mailing list and the 3000-L newsgroup, customers and advocates for the system talked about help from the US Congress, emulation designs, how much help Linux could be in a revamped MPE and why sticking with the operating system remains the best course for some companies -- even in the face of HP's end of support.

OpenMPE mailing list founder Jon Backus was meeting with his US Congressman this week to ask about the potential for US federal funding to help MPE make the transition to other hardware. Numerous HP 3000 customers are in the Maryland district of Rep. Roscoe G. Bartlett Jr., including healthcare software provider Amisys LLC, Computing Options, emergency dispatch software provider PSSI and Ideal Computer Solutions. Backus said his meeting wasn't about getting US government pressure to reverse the HP decision to end 3000 support, but to explore ways federal help could make an MPE outside HP a reality.

Backus was also wrapping up the legal pieces of establishing OpenMPE, Incorporated. The entity "is
already working its way through the legal system and is about to be finished, probably by Dec. 17," Backus reported on the OpenMPE mailing list. "I figured it would be needed depending on the answers from my Congressman. They name can be changed later if the majority wishes to do so." At the OpenMPE Web site a nomination process is underway for "nine OpenMPE Inc. board members: two Consultants, two Utility Vendors, two Application Vendors, two End Users, and one HP Employee. An additional stipulation is that at least two of the board members be from outside the United States, since MPE is truly an international product. The nominating or volunteering is open until Friday, December 21. This will be followed by a period of time for people to review the candidates. Finally, there will be an online popular vote to select the initial board."

One board member of another group took issue with founding OpenMPE Inc. and creating another board. Denys Beauchemin said in an Internet posting that Interex has "has already mentioned to HP that it wants to be the recipient and guardian of the MPE source code, should HP ever let it go. Interex is already doing this for another OS, remember RTE?" Beauchemin also noted that Interex has received a request to start a Special Interest Group for migrating from the HP 3000.

On the emulation front, technical experts are debating how much help could be wrung from HP's other platforms, especially Linux and HP-UX. Shared code between MPE/iX and HP-UX is minimal, according to HP's Jeff Vance. Commenting on 3000-L, he said that "Percentage wise there is very little shared code -- not due to lack of trying on our part. Even many of the drivers cannot be highly leveraged due to MPE expecting a more robust driver than HP-UX does. HP-UX and MPE IO systems are getting closer these days, with, my understanding being, that over time HP-UX has evolved to an IO system that is now more similar to MPE's. True we added PCI late in the game, but I am talking about the underlying IO architecture."

HP does have an emulator available to permit PA-RISC instructions to execute under Itanium processors, but the software is written specifically for HP-UX software in its current release. The Aries emulator can only emulate applications written for HP-UX, however, not an operating system. HP intends to use Aries to make provisions to help move HP 9000 application binaries to the newest hardware architecture, not the operating system itself.

The 3000 division's general manager Winston Prather has said he doesn't believe a decision on how HP will help the OpenMPE movement needs to be made especially quickly. Taking the time to study all the options will help ensure the HP decision is the best for everyone involved, he said -- the customers choosing to homestead, those migrating to other platforms -- as well as HP's interests.

"I want to make sure we do the right thing, and that we do it right," Prather said in an interview that will appear in the NewsWire's January issue. "Making a snap decision to do something historically has never worked out to be a good thing for me."

While HP and Prather consider what role the company should play in an OpenMPE effort, the community is studying many options and blasting more than one proposal. Even the visit with a Congressional representative came in for some charges of wasting taxpayer money -- until others pointed out that IBM was due for a billion-dollar windfall from the US government, part of a $70 billion rebate of alternative minimum taxes paid by companies like GM, Ford and General Electric.

Getting involved on some level may help ease the shock and dismay which the most loyal customers are still experiencing, even one month after the HP announcement. While sizing up what might become of OpenMPE and the movement to extend the 3000's life, skeptics and advocates alike might take note of these words from Shakespeare's "Measure for Measure:"

Our doubts are traitors
And make us lose the
good we oft might win,
By fearing to attempt.

Changes to expect in moving to HP-UX

HP-UX instructor Chris Wong shared some observations over the 3000-L mailing list recently about what administrative surprises a customer might expect in moving from the HP 3000 to HP-UX. For sites looking at migration issues to resolve their Transition, here's some of Wong's warnings posted for free over the Internet:

"I think the biggest difference for most MPE administrators is just the concepts of admin work. For example, there aren't roles in UNIX like there are in MPE. (Example, you have manager.sys, operator.sys, etc..). In UNIX you have all (root) or something else. In MPE you are used to having your operators be operators so that they can do backups, etc.. In UNIX there isn't a special class for this type of user, yet perhaps the operator needs root privileges to complete tasks. The administrator is left with the task of figuring out how to give the operator the permissions they need to do their job without giving permissions that could end up destroying the system.

"HP-UX comes with fbackup that is integrated into [administration tool] SAM, or you can run it at the command line. This is adequate for many sites. If there are special things that you want to do with your backup, you may want a third-party software package, just as you would on your 3000. Typically, [HP's] Omniback is not well liked, however, it has improved greatly in the last few releases. If you want an all-HP package, you can go with Omniback. There are many popular third-party packages. Veritas seems to be the favorite currently.

"Just as you have the option of purchasing Glance for the 3000, Glance is also available for the 9000. Lund also sells their performance products on both systems. If you want to collect data over a period of time, you need to purchase the MeasureWare agent (just like on the 3000). To view this collected data, you need PerfView. All three of these products come with a 90 day free trial.

"Spool file management is a different issue. For starters, there aren't "standard lists" like on the 3000. It depends what you need to do with your spoolfiles (and that, on HP-UX, means strictly print jobs). If there are special things you are doing, you may need some software. If all you are doing is sending print jobs, it should be okay on its own."

Having worked on MPE systems since the mid-1980s and HP-UX systems for the past 8 years, Wong has written a book on HP-UX Security <http://newfdog.hpwebhost.com/hpuxsecurity> and also teaches classes for Cerius Technology Group, which will be offering "UNIX for MPE users" classes starting in January. She says that "the good news about security on HP-UX is that it isn't going to cost you extra money. You do not need to by any additional software unless you are a bank (or something like that) running a Web server, in which case you would want one of the virtual vault products. (But, you'd need this even if you were running a 3000)."

Built-in tools in Unix might fall quite a bit short of the standards HP 3000 managers expect. Gavin Scott of Allegro Consultants, a company that has developed MPE software on contract for HP and for commercial release, said that customers can find performance monitoring and management, spool file management and security tools in HP-UX, however crude. "HP-UX comes with tools to do all of these things, though the word 'primitive' comes to mind," Scott said in an Internet posting.

Track MPE files on backups

With all the discussion of Transition issues, it's easy to overlook the everyday efforts during the past month of managing HP 3000 resources. Pierce County, Washington's Douglas Becker hasn't overlooked the continuing work to be done out there -- after all, HP has said the next two years will be "business as usual" -- by sharing a free utility he uses to find which tapes carry which backups. He's even promising a little fun. Becker reports:

"I offer to the HP 3000 community a product source written entirely in COBOL 85 which can be used to track your MPE files on backups. For those who use it, they may find that it cuts literally hours of work researching which tapes backups are on and even now tracks backups on disc.

"Information on use of this product is at: http://www.mind-set.com/hp3000/html/pages/CSB220.htm with additional information at: http://www.mind-set.com/hp3000/html/pages/RESTOREJ.htm. Complete source is at http://www.mind-set.com/hp3000/html/pages/CSB220CC.txt

"HP 3000 users may download and try this program, and, while not a simple one, it is well documented internally. While it is for clients of BackPack/iX and Tapes+ from ROC Software, enterprising folks may be able to adapt it to other venues. It has saved us here at [Pierce] County countless hours of research -- and made restoring files from backups fun again."

A free C compiler independent of HP's support

The December 31, 2006 deadline means the end of HP support of its HP 3000 compilers, as well as the computers and operating environment. But there's a well-regarded Open Source compiler for C that's been in production use at lots of places, including inside HP's own MPE labs. Brian Duncombe of 3000 developer and Open Seas software distributor Triolet Systems reminds us that Mark Klein's port of the GNU Compiler Collection (GCC) for MPE/iX works well:

"I for one see no reason to spend money on C/iX. Mark Klein has provided us with the port of the 'industry standard' GCC compiler tools, a very valuable contribution to the HP 3000 ecosystem indeed. This is what we have switched to and it has many advantages including better diagnostics. The only downside so far has been the debug environment, but that may improve with time. If you insist on using non-portable intrinsic calls (we do), then you need to get accurate function prototypes for the intrinsics that you use, but that is certainly not an insurmountable issue."

GCC thus has the advantage of having no end of support date, being an Open Source product that's backed up by the 3000 development community. HP thinks enough of the software to be using it while developing releases of things like Samba for the HP 3000. On its last release, it was outperforming HP's C compiler, too. You can download the software from the HP Jazz Web server at http://jazz.external.hp.com/src/gnu/download3_0_1.html

You can also get a commercial C compiler for the HP e3000 that's also not under HP's support deadlines. The CCS/C compiler is currently available from European distributor The Internet Agency, "together with the CCS/Trax-C source level debugger," reported the agency's Chris Thompson. "The interface for Trax-C is the same as for TRAX-Cobol, the source level debugger for Cobol." More information is at the Web site at http://www.the-internet-agency.com/itagency/ccs/ccsprods.htm#c3000

Speedware returns to profits for fiscal year

4GL and development tool provider Speedware returned to profitability to Fiscal 2001, according to figures it released in early December. For its fiscal year ending September 30, the company posted four consecutive profitable quarters, $467,000 total profits on $16 million in revenues. The company's revenue dropped from $23.2 million in the prior fiscal year, in part because of the sale of its Czech subsidiary last December. Last year Speedware finished its fiscal year with a $3.9 million loss.

The company, which produces the Speedware 4GL and Autobahn Web development software, also refocused its efforts over the fiscal year, to follow a path where keeping customers locked into the HP 3000 became less important than keeping them using Speedware products. Officials said the firm also "dramatically reduced its cost structure by significantly scaling back a very expensive US-based sales and marketing operation." It's continuing work on KnowledgeMaker, a new business intelligence tool expected for release next fall which will send alerts to a variety of wireless devices.

Speedware said the company "began the process of rebuilding a sales infrastructure around a leveraged selling model designed to effectively target the small to mid-size enterprise market. The company now has a dedicated team of sales executives who look after supporting a large installed base of customers, and business development professionals to support an ever-growing roster of partners who either "bundle" Speedware's tools or cooperatively sell alongside the company's direct field sales executives."