LOS ANGELES—Hewlett-Packard Co. Chairman Carly Fiorina said recent strategic moves by rival computer makers provides validation for her controversial decision to buy Compaq Computer Corp. for about $19 billion in a deal completed in May.
“Today we are in a much better position to serve you than we were a year ago,” Fiorina said in her keynote address to about 5,000 attendees of HP World packed into an auditorium at the Los Angeles Convention Center on Wednesday.
“We think that other competitors are now reacting to us and starting to make their own strategic choices,” she said.
For example, Fiorina noted that Sun Microsystems Inc. is “going so far as to offer Linux on a PC,” a dramatic shift from its historic sole focus on supporting only its proprietary Solaris operating system.
Dell Computer Corp., according to the chief executive, recently made the “decision to upend its business model in search of new growth opportunities in printers, services and white box PCs.”
Dell on Tuesday announced it had signed a deal with Lexmark International Inc. to develop and market its own line-branded printers starting next year. In response to Dells plans to enter HPs most profitable business market, HP in July canceled a reseller agreement through which Dell acquired and sold HP printers and supplies, as well as handheld devices.
Fiorina saved her harshest comments for IBM, the giant computer maker often cited as the model company for HPs expansion beyond hardware to a greater focus on services. The chief executive contended that rather than expanding and embracing new technology, IBM was reverting to its old ways of promoting its own technology and reducing choices for its customers.
“IBM is reverting to completely vertical integrated strategy of the 80s, so you cant have it your way, but you can have it IBMs way,” Firoina said, spurring laughter from the crowded hall.
: Fiorina: Rivals Moves Justify Compaq Deal”>
Overall, Fiorina sought to assure HP customers and resellers gathered at the companys annual conference that the buyout of Compaq had strengthened, not weakened, the giant computer maker by extending its capabilities and giving it market leadership in several areas.
Highlighting the companys broad reach, she noted that HP hardware powers 14 of the worlds largest stock exchanges, helps process two-out-of-three credit card transactions worldwide and is used to manage about 65 percent of the worlds energy infrastructure.
Speaking amid the high-tech industrys worst downturn in its history, Fiorina also argued that companies must continue to buy and upgrade their IT infrastructures, contending that most companies existing IT infrastructures are already outdated.
“Information technology is the ultimate team sport. The challenge is that many of you are trying to play the game with a quarterback and a system that last saw success five years ago,” she said.
A few years ago, Fiorina said, IT managers sought to integrate their data into the most stable platforms possible, but such architectures cant keep up with todays changing business demands. Citing an unspecified survey of technology managers, she said that the business environment is changing seven times as fast as the underlying IT technology—a problem she said system managers must address.
“You are no longer rewarded for stability, you are rewarded for agility,” Fiorina said, comparing the challenges facing todays system manager to those of a football coach.
“You are no longer simply defending your own goal line, you are now charged with making up plays and moving the ball down field against a shifting, blitzing, lightning-fast opponent with only two minutes left to play,” she said.
More specifically, system managers now have to worry about more than simply deploying hardware, she said, they must also consider how to manage systems, distribute information, network, and adjust to changing workloads on the go.
In order to address such a broad array of issues, she said, companies are increasingly going to be looking toward computer makers that can offer a broad range of hardware, software and services—precisely the reasons HP merged with Compaq.
“We saw the opportunity to combine these two companies to create one great technology company,” she said. “We will stake our claim on being the company that offers the best return on IT.”
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