On Wed, 1 May 2002 20:53:11 +0200, Jerry Finn <[log in to unmask]> wrote:

>>
>> Date:    Tue, 30 Apr 2002 06:33:33 -0400
>> From:    "John R. Wolff" <[log in to unmask]>
>> Subject: IBM Gets It Right for the iSeries (formerly AS/400)
>>
>> The article referenced below illustrates how IBM is continuing to support
>> their iSeries (formerly called the AS/400) and is regularly upgrading the
>> OS to newer chips, including the top of the line chip.
>-Snip-
>> If the "new" HP wants to compete with IBM they need to take a page (and
>> probably the whole book) from IBM and learn how to *market* a product
line
>
>I think this really gets to point. Justifications for the EOL from
>HP and those who agree have read like banal platitudes cut and
>pasted from a business 101 text. Due to a "shirking environment", as
>if it is completely alien to a company differentiate its product and
>grow a market.
>
>With hindsight I would rather compare MPE to IBM's 390 mainframe,
>which is gaining as centralized transaction processing is regaining
>favor in large companies. This is the type of thing MPE and VMS
>excel at, but the high end of the market has been abandoned to IBM.
>The way to market MPE would have been to push it up market, not down
>to compete with PC networks.
>
>The top end of the market is where you sell high margin services too.
>
>In HP's last Web cast, someone asked why the same machine ran at
>a faster clock speed when HPUX was installed than MPE. The answer
>seemed as lame as I could imagine. I don't think I understood it.
>It went something like HP decided what price/performance was
>appropriate considering where the customers were upgrading from.
>It left me the impression that HP was deliberately crippling the
>hardware if MPE was installed because THEY decided YOU didn't need
>the performance. Did I misunderstand this?
>
>We'll see if HP learned its lesson when they inherit VMS from
>Compaq/Digital. The current strategy is to port VMS to the IA-64.
>But with so many Unix versions and Windows going IA-64, why should
>I buy a complex system like VMS. The herd mentality is killing
>product differentiation.
>
>VMS has a good install base in the financial industry. If it's pushed
>down market it will follow MPE to the grave and the 390 will
>inherit its top market customers and the services that go with it.
>
>Jerry Finn
>[log in to unmask]


I have been thinking about your excellent comments above and have read them
more than once.  The CSY division has done an incredibly poor job of
managing and marketing the HP3000 over the last 10 years at least.  It is
difficult to comprehend how a profitable division within a previously well
managed company could atrophe to the point of obscurity, especially given
the fact that the entire success of what is now called Hewlett-Packard
(computers & printers without measuring & instrumentation) is based on the
HP3000.  Without that single successful product line, HP would not be a
factor in the computer business today at all.

CSY has systematically destroyed the growth of the HP3000 by a fatal
combination of neglect and intent.  Their failures include decisions such
as: Not marketing the product upscale (or anywhere else) as you suggest,
losing contact with the customer base, integrating new peripheral equipment
into MPE at a very slow rate (behind HP-UX), stupid cpu based tiers instead
of user based pricing making the system artifically expensive,
unexplainable intentional degradation of hardware performance compared to
the same box running HP-UX, silly accounting manipulations and
compartmentalization which separate support revenue from sales revenue
making the division look worse than it is (after all, the reason customers
stay on support is to receive the enhancements CSY produces, but CSY does
not get that revenue to support the enhancement costs so new sales must
carry this burden alone), etc..

CSY whining about customers not buying new equipment in favor of used
equipment is simply a result of the decisions just mentioned; i.e.,
artifical high prices for underperforming product and the failure to grow
into new markets.  The automobile industry seems to get along fine even
though a brisk business in used cars exists.  Computers are no different  --
  entry level customers will often start with used product that still has a
serviceable life and then grow up from there.  HP could easily maintain
contact with these customers (the systems are licensed) and sell them on
the benefits of support or new equipment when they are ready.

Meanwhile, other computer divisions and product lines within HP began to
appear about the same time as PA-RISC in the mid-1980's, namely PC's
(Windows) and the HP9000 (HP-UX).  (For purposes of this discussion I am
ignoring many other HP products that did not impact this process.)  Looking
at the bigger picture of HP as a previously well managed company, the
original management with the strategic thinking that created the HP3000
apparently became overwhelmed and drowned out by other management thinking
brought into the company for these additional product lines.  Low margin
commodity products were now somehow perceived as the road to riches.
The "new" strategy embraced standards almost exclusively which stifles new
development (unless you can get your invention adopted as a standard, like
Java or Windows).  HP adopted a marketing philosophy of following and
mimicking competitors, not customers needs, and lurching from trend to
trend.

The original philosophy that the HP3000 embodied was that of a compatible
system that would evolve in terms of both hardware and software without
disrupting customers and forcing them to do expensive software migrations
(either mini or maxi) with each OS upgrade.  This goal was accomplished
very well and is what permitted the platform to grow successfully (as did
HP).  But, the alternate platforms of Windows and UNIX and the thinking
that goes with them did not appreciate the values that the HP3000
established.  Consequently, management at CSY began (or were told) to defer
to the other rapidly growing elements in the company until HP was almost
ashamed to have a product line such as the HP3000.  Where is it written
that multiple successful markets cannot be served unless they are the
dominate trend?  Why has the driving strategy become the need to be #1 in
any market share, without regard to anything else?  Customers obviously
purchase product from companies that are not #1 or else there would only be
one company per product line.

Now most recently, HP has promoted the migration from the HP3000 to HP-UX.
Forcing customers to contemplate and embark on an expensive process, which
will yield no new value when and if completed.  As we speak HP has just
purchased Compaq Computer and is about to integrate it into the fold.
More "new" trendy thinking is on the way.  Just a couple of days ago the
new HP President, Michael Capellas, disclosed publicly that (as
he/HP/Compaq sees it) UNIX is on the way out in favor of Windows and
Linux.  He indicated that SUN would become a casulty of this latest trend.
Meanwhile, what are customers with real businesses to run supposed to think
and do?  How many migrations and at what pace are customers supposed to
keep up?  And why should they?  Again, the result of all this migration is
just trying to stand in place and continue being able to run your business.

To add insult to injury, HP appears to have no real interest in passing the
MPE legacy along to others who would continue to service these users and
the market it represents.  Perception is reality. The last six months of
lip service about considering this idea rings hollow indeed.  Time is of
the essence.  Instead HP assumes that present HP3000 customers or users
will have some reason to want to stay with any HP solution and migrate.
Some undoubtedly will in fact do this.  But I predict that many will look
elsewhere for a more stable and supportive vendor that knows how to value
customer loyalty and can recognize market value.  Customers (management not
programmers) will get tired of lurching from trend to trend, watching
product lines get yanked and trying to keep up, but really just standing in
place at great cost.

I say enough is enough.

* To join/leave the list, search archives, change list settings, *
* etc., please visit http://raven.utc.edu/archives/hp3000-l.html *