HP: Adaptation Needed

The company should take a cue from its own "adaptive enterprise" push.

Hewlett-Packard, the company that has made "adaptive enterprise" a company slogan, needs to be more, well, adaptive. Thats my conclusion after spending a day last week at the companys HP World user conference in Chicago.

The conference took place a few days after HP issued one of those fiscal surprises that Wall Street dislikes. The surprise was HPs disclosure that it would miss its third- and fourth-quarter financial estimates because of lackluster and money-losing performance in the companys enterprise server and storage division. Following that news, HP reacted with an uncharacteristic dismissal of its top server and storage executives. A secondary reaction came shortly thereafter from Dell and IBM, which issued releases saying business was going along swimmingly for them.

HP executives, led by CEO Carly Fiorina, face a series of difficult challenges within the company, within the customer base and among powerful competitors looking to gain share in an increasingly uncertain economy. The bet that Fiorina made following the acquisition of Compaq is that the combined companies can be greater than the sum of their parts. Its a bet that contends a company with operations extending from consumer electronics through enterprise systems can leverage those myriad operations in a way that is unavailable to competitors not playing in such a broad market spectrum. At last weeks conference, there were examples of the downside and the upside of that bet.

The management departures and reshuffling in the server and storage division that received so much media attention were not major conversation topics among the attendees I spoke with. "I dont see any effect. [HP management has] been reorganizing every six months for the last 28 years," said Denys Beauchemin, chairman of the Interex HP user group and one of the shows sponsors.

In addition, HPs push to promote the concept of the adaptive enterprise and utility computing was not top of mind for the attendees.

Users at HP World were more concerned with the companys continuing push to Intel Itanium-based servers, supplanting the old Digital Alpha-based and Tandem NonStop systems. With even Intels enthusiasm for Itanium apparently on the wane, there was a lot of interest in preserving legacy systems and improving the performance, capacity and administration of those systems.

Casual discussions with a few users does not a survey make, but I think there are several issues related to user discontent and expectations that HPs management should adapt into their adaptive enterprise:

(1) Stop dissing Dell; there is less interest in hearing why Dell is simply a manufacturing and distribution machine than in hearing how HP will compete with Dell on pricing and delivery.

(2) Remember the enterprise customer base; the flash and excitement around consumer products can overshadow the more mundane—but, to the enterprise customer, more important—developments in the enterprise base.

(3) Explain why HPs products can lead to new corporate technology architectures that competitive products cant achieve.

(4) Dont make it easier to outsource my job; instead, explain how I can develop the skills to build a career in an outsourced world.

Ann Livermore, executive vice president of HPs Technology Solutions Group, used her keynote to chronicle the case histories of such organizations as UNICEF, DreamWorks and Starbucks. Those case histories were strong examples of how technology can be used to develop new business models and markets.

/zimages/1/28571.gifClick here to read eWEEKs interview with Livermore.

Missing from Livermores keynote was a discussion of why those new business models and markets could be developed using only HPs competitive products and services. HP needs to answer that charge and give its users a set of tools to build a bridge from the technology infrastructure of the past to the technology requirements of tomorrow.

Editor in Chief Eric Lundquist can be reached at eric_lundquist@ziffdavis.com.

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