Hello Friends:

We've been working hard this week to get the news out about HP's
decision to put the e3000 into an independent orbit. But a few
technical troubles have prevented us from putting our news and
analysis online. Our Web site is experiencing some problems that
prevent us from posting this morning; Webmaster Chris Bartram is
working on resolving that issue. In the meantime we've made our
stories available at the 3kworld.com site:

<http://www.3kworld.com/newsroom.asp?appmode=itemDetail&news_PK=3757>

<http://www.3kworld.com/newsroom.asp?sit_PK=67&appmode=itemDetail&news_pk=3758>

In an incredible coincidence, our ISP has somehow been blackholed by
ORBZ, so we're experiencing some trouble with a few subscribers in
sending them e-mail as well (a report was e-mailed right at the HP
embargo deadline on the news -- if you haven't received it, let us
know). The ISP is working on getting their mail server off the ORBZ
blackhole list, but at the moment, has not resolved the problem.

US Mail is working fine; our report on the HP announcement and our
commentary has been in the mails since Tuesday, the day before HP
announced the news. We haven't commented before this time because
there was no official announcement -- and like most of you, we were
hoping it wasn't true.

Here's our story, written on Monday afternoon US time (about 9PM in
London, where I heard the news). We still need to report on your
reactions and decisions, which I'm sure you're still pondering. We
would love to hear from you on your plans, hopes, and emotions. A
complete report will appear in our next issue, with continuing
coverage in the months to come.

We're not going anywhere, not with things getting this interesting.

Ron Seybold
Editor
3000 NewsWire

HP advises transition plan from 3000

Recommendation includes five-year support guarantee, two more years
of new sales

        Hewlett-Packard proposed a new chapter for its oldest
business computer on November 14, one that advises customers to
transition away from the HP e3000 over the next five years. The
announcement from 3000 division general manager Winston Prather and
marketing director Christine Martino included news of a confirmed
date for end of HP support and a halt of new sales in a little less
than two years' time.

        HP said it will stop selling new systems on Oct. 31, 2003,
ending its distribution of more than three decades of the most
reliable business computer in the HP lineup. The company's contract
with North American distributor Client Systems - a company doing
business exclusively in the HP 3000 line - has been extended for two
more years. The computers will clearly be in service for quite awhile
after that date, however, as HP is promising full customer support
for the systems through the end of 2006.

        "This really is about concluding that it's time to advise
customers of the long-term trend," said Prather. "It has nothing to
do with cost savings or downsizing. This is an advisory type of
announcement."

        HP briefed the NewsWire several days in advance of the
worldwide announcement to the general press. The announcement
included news that HP will provide free unlimited HP-UX licenses for
all customers who own the new A-Class and N-Class servers, and
transform those systems into equivalent HP 9000 computers. And in the
meantime, HP intends to continue selling the system, and upgrading it
with projects that have already been announced. It will present
papers and communicate with customers at Interex conferences during
2002, and continue its Webcast series with a January broadcast on
transition.

        "From a CSY perspective and a support perspective, it's
business as usual for the next two years," Martino said. "It's time
for customers start their planning to move to a platform that will
serve their businesses better in the future. HP recommends that
customers begin transitioning off the HP 3000 to alternate HP
platforms." HP will be releasing an overview White Paper in the first
of a series, "HP e3000 Migration Considerations," from its Web site.
More detailed white papers on transitions to HP-UX will be released
in the future.

        There's even a silver lining in the announcement for some HP
3000 customers. The end of support date for MPE/iX 6.0 has been
extended by six months to October, 2002, making it easier for
companies using the HP 3000 9x7 systems to remain on the platform. HP
stops support of that hardware in April, but software support for the
systems has been extended as part of the transition. Series 939 and
959 system support has been extended to December of 2003.

        The company is also notifying all of its customers on current
support contracts by letter. Prather said the division started to
brief its top-tier customers on November 9. "They were not surprised,
and they really appreciated HP being able to tell them what we see as
the future role of the platform," he said. "At the same time they
really love the platform, so there was some sadness in transitioning
from the platform." Prather said these top-tier customers "already
have a multi-OS strategy, so they've been evolving their applications
over time. It is a stake in the ground, but the CIOs I talked to were
appreciative of hearing what the future holds."

        No layoffs or downsizing in the CSY division is being
planned, nor are any additional technical development operations
going to be shifted away from the California 3000 labs. The product
has often been pointed to as a profitable part of the HP lineup, but
CSY officials said profits didn't enter into the decision to stop
selling the systems two years from now.

        The end of the CSY division seemed even fuzzier, despite its
announcement of a date for the end of support. "When we get to the
point where HP doesn't need a CSY organization to support the 3000
customers, then we wouldn't have a division," Prather said. "We will
staff the division to make sure we have whatever resources we need to
meet our commitments, and we are committed through December, 2006. We
will ensure from both a CSY perspective as well as our support
organization and field support we have the staff we need."

        HP will also be helping continue the transition after the end
of the support period. "After that, [CSY] employees will transfer to
other businesses to continue the transition as well," Prather said.
HP hopes to capture HP 3000 business in its NetServer and HP-UX
platforms, but recognizes that competitors will be targeting the
customer base. "We will need to earn their business," Prather said.

        HP's plans on database migration were less specific at the
announcement. Prather mentioned HP Eloquence, a revision of the HP
IMAGE database that's been running on HP 9000 servers for more than a
year, as an option for companies migrating their home-grown systems.
Other customers should look to their application providers, Prather
said, for advice and support on how to transition away from the
platform.

        Martino and Prather said a "decline in the ecosystem"
surrounding the 3000 prompted the move - and denied that the
impending HP-Compaq merger had any effect on the decision to write
HP's last chapter in the 3000 community. CSY made the decision
sometime after the last HP World conference, according to Prather.
The general manager, who has spent his entire career managing
technical and business advances for the platform, said he was
saddened by his decision.

        "I'm sad, because I've been involved in this forever," he
said. "But I feel confident we're doing the right thing for
customers. I can stand up in front of any customer and explain why
we're doing this," Prather said. "It's a recognition in general that
we're not going to be able to reverse the trends." Martino said sales
have been declining for the product, although the month of October,
HP's close of its fiscal year, was a record one in North America. She
added that the division's staff has been "going through stages of
grief" over the decision.

        But despite CSY's melancholy approach to the news, the
division remains well in place trying to sell new 3000s to the
community over the next 24 months. The immediate future holds no
changes for companies relying on the system, HP said.

        "We picked these dates that we'll guarantee availability for
customers, and we don't have any plans to review those dates. We knew
that the next question customers would ask is, 'How long will this be
a safe environment?' That's why we gave them these dates."

        As proof of the safety, HP plans to continue with all of its
announced enhancements for the system except moving it to the IA-64
platform. The ongoing PA-8700 project, which is delivering a chip
that is expected improve performance another 30 percent over current
top ends, will be delivered as promised. HP will also release new
A-Class systems during the next two years, offering a performance
bump for those low-end servers as well.

        HP will also be releasing MPE/iX 7.5 next year, although the
future releases of the operating system will be limited to Express
updates beyond that, according to Prather. Native Fiber Channel will
still be released, along with support for the new Ultrium tape
systems and va7400 disk arrays.         Possibilities of selling the
business to another company and helping to create an Open Source
movement to extend MPE's life still may hold some potential for
Prather. "We have a very diverse set of customers," he said, "and in
briefing our top-tier accounts, this doesn't come up. I don't believe
doing any of that [Open Source] will change any of our
recommendations for customers. I feel strongly that the ecosystem is
starting to erode, and that right thing to do is move to another
platform, hopefully an HP platform."

        But "having said all that, we will try to understand how we
can help the evolution of MPE. If it is valuable to customers, we
want to understand how we can help them." Selling the source code for
the operating system, as HP once did for the earlier generation of
MPE, is also a possibility, "but I want to understand to who, and for
what purpose."

        In the meantime, HP expects that a lively market is about to
emerge around migration consulting and tools for the platform. "I
have a feeling the third-party community will spring to life quickly
to develop tools to help with the migration. I think a number of the
partners in the ecosystem will look at this as an opportunity. This
could bring the ecosystem to life for the transition period."

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