Searching for stability

With all of the recent media-spun, post-merger goodwill, there is a tendency to view the new Hewlett-Packard through rose-tinted glasses. The general consensus, however, is that the merger stands to benefit both companies.

This stands in stark contrast to Compaq’s earlier acquisition of both Digital Equipment Corp. and Tandem Computers Inc. Then, customers of both companies felt the companies did not fit with Compaq’s technology vision.

“There was a bit of a clash when Tandem was acquired,” said Dave Wilson, Ottawa-based president of the Canadian Association of Compaq Users.

Lately, though, he’s hearing sighs of relief that maybe Tandem has found a better home in the more enterprise-savvy HP.

On the Digital side, the transition was worse. “It was just wholesale ugliness, (especially with) sales force issues,” said Scooter Morris, a systems architect for a San Francisco Bay area technology company. “It was a transition that could not have been handled worse.”

“I think this is a much better merger than what happened when Compaq took over both Tandem and Digital,” said Randall Becker, president of the Canadian Tandem Users Group in Toronto.

It is often the case that those brought into the fold through mergers do not have the same standing as those who were there from the beginning. When corporate cultures clash, the newbies get the short end of the stick.

The acquisition of Tandem and Digital were no different. When the pre-merger Compaq came out with a roadmap for its top end server technology, users did not perceive a lot of buy-in from the sales and marketing types because, they felt, Compaq corporate culture did not have an enterprise focus.

“The roadmap…in my view was unattainable,” Becker said.

He then recalled a conversation he had at the time with a Compaq Web marketing representative, who wanted to know how many NonStop servers Becker had purchased over the Web. Given that they can run into the millions of dollars, this never should have been a question, he said.

“That was the kind of attitude that we saw from Compaq,” Becker said. “I don’t know if Compaq ever really truly grasped that it took six to 18 months to sell a NonStop server or an Alpha.”

He’s not alone in his views. “You just don’t sell those kinds of servers as a commodity product, which is how Compaq made its business,” said Joe Pollizzi, Baltimore-based president of Encompass U.S., an enterprise computing association.

However, Pollizzi, a computer engineer at the Space Telescope Science Institute, (the NASA institute which operates the Hubble telescope), said with the HP-Compaq merger, Digital and Tandem users feel as though they are coming home.

“I think that is one of the reasons…that people felt much more comfortable with this acquisition than they felt with the Compaq acquisition.”

change and migration

Serious changes are occurring at the enterprise level for the new HP. Though some products will survive unscathed, others will undergo some radical shifts in the years to come.

The NonStop server family has no equivalent HP product so it will continue in its present direction, though eventually it will move to the Intel Itanium processor. On the other hand, Tru64’s days are numbered. It is here HP may tread carefully, since those who use the Tru64 tend to be rather passionate about it. However, the consensus among users is that HP is pulling out all the stops to placate their Tru64 customers.

“They have convinced me, at least right now, that they are really going to put effort behind making sure that I stay an HP customer,” said Morris, a Tru64 user. HP is picking a phase-out date so far in the future – the support will continue into the next decade – that it becomes a non-issue for those customers thinking about buying a Tru64 today, he explained.

“They are supporting the system well beyond its useful life.”

Regardless, companies will have to migrate from Tru64 to another server system in the years to come. Though having customers eventually migrate to the new HP-UX on Itanium is the corporate goal, the task is far from trivial.

“There is cause for optimism…[but] I won’t say that it is flat out good,” Morris said. “The migration is going to be challenging.”

The byte ordering (big versus little-endian) is different on the two systems and work has to be done to make sure those companies migrating from Tru64 have a relatively easy time of it. If the migration is too challenging, this would be the time companies might consider jumping ship.

Morris is also slightly concerned that HP is going to become an end-to-end Intel shop. “If Intel has another face plant on Itanium…coming out many years late and way to slow, then HP at the high end is going to face plant right with them,” he said.

An additional area of concern for many Digital and Tandem users is the professional service levels under the new HP umbrella.

Both Becker and Wilson laughed at common misconceptions. The popular view had Compaq as the services company and HP as the technology company. Though this may have held true in some respects, it was not the case at the enterprise level. So Becker said he is going to be closely monitoring staffing, especially after his experience with Compaq.

“There are going to be layoffs…the questions is where will the layoffs occur?” he said. “Which parts of the (professional) service organization will be developed and which won’t? That, I think, will be a very important indicator as to whether the product roadmaps are legitimate or are just fantasies.”

Pollizzi agrees. Watching who they are set to retain and who they are letting go is a “telling tale,” he said. “By the end of the year, I need to know.”

But so far Pollizzi said he is pleased with the senior people who have been brought over to HP.

When HP was contacted directly, a corporate spokeswoman would not offer details regarding exact staffing or layoff numbers, and had little to add other than that the new HP would be “customer focused.”

Regardless, time is not on HP’s side.

“I actually think they don’t have a lot of time,” Becker said. “If we do not start seeing new customers at the enterprise level within the six month timeframe, they are going to run out of gas.” “They have to start closing the customers that they have had in their pipeline the past three years. If they can’t…they are going to run out of steam and are going to end up as a PC company.”