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HP's PC/printer chief
takes computer helm
Channel growth, cost cuts lead HP 3000 impact list
By Ron Seybold
3000 News/Wire
HP inserted another layer of management between its CEO
and the HP 3000 division when it named Rick Belluzzo to lead
all of its computer operations on August 29. The move shows
HP is serious about developing self-sufficient channels for
all of its computer business, including HP 3000 servers.
HP's press release didn't assign a new title to the
41-year-old Belluzzo, but he was named an executive vice
president. Only HP's CFO holds an equivalent rank. Senior
vice president Wim Roelandts, who leads the Computer Systems
Organization that includes the HP 3000 Commercial Systems
Division (CSY), now reports to Belluzzo instead of CEO Lew
Platt. James Arthur, head of HP's customer support
operations, also had his direct-report shifted to Belluzzo in
the reorganization.
The change was the second time this year a management layer
was inserted between CSY and Platt. This spring Bernard
Guidon was named to manage the Computer Systems Group, which
includes CSY and the HP 9000 division. An HP spokeswoman said
Belluzzo's appointment has no impact on the company's
commitment to making MPE/iX run in its RISC project with
Intel. Only Unix and Windows NT were mentioned in the HP
release about the reorganization.
HP announced Belluzzo as the number two executive in its
$20 billion computer business from a position of strength,
after posting third quarter numbers that were the envy of the
industry: profits up 66 percent, with the company well on its
way to its first $30 billion year. HP mentioned its
channel-rich business - PCs and printers - as a strong
contributor to the quarter's 34 percent order growth.
The channel is where Belluzzo made his points with HP. At
age 21 he started as an accountant in HP's Santa Rosa plant
20 years ago, taking his accounting degree into management
and marketing positions by the mid-80s. Belluzzo was been on
point with HP 3000 customers once during that period, during
a quality crisis surrounding 7933 disk drives. Failures were
not uncommon on the devices, and a faulty lot of write heads
proved to be the problem. The Boise disk operations where
Belluzzo was a manager eventually committed to replacing 7933
heads on any customer's demand, to ensure reliability and
satisfaction.
Belluzzo has spent the last two years running the part of
HP's business that demands quality manufacturing: PCs and
printers. Failures in such commodity businesses can be
deadly. He became a protege of Dick Hackborn, who led HP's
success in hardcopy devices - the revenue that kept HP
growing during its early struggles with RISC-based MPE/XL
reliability. Belluzzo's mentor retired a year after Lew Platt
took the CEO post, leaving his protege with the leadership of
a new Hardcopy Products Group; later that year Belluzzo took
over HP's PC organization as well.
Today he can take ownership of successes in inkjet printers
and PCs, two areas which show clues to what his management
will mean to HP 3000 customers. In inkjets, HP owns the
technology it's riding to a leading market share, the kind of
lead that attracts channel outlets like flies to honey.
Belluzzo also saw first-hand the impact of technology
partnership versus ownership. In the 1980s Belluzzo nurtured
the technology partnership with Canon that gave HP a laser
printer empire, while Canon created the engines for those
LaserJets. Later Canon mounted its own product push with its
engine technology, and took market share from HP.
In contrast, HP holds patents on inkjet engineering, a
technology much more important to a future where people will
want hard copy of what's on their TV screens. As a result, HP
is in a better position to dominate the inkjet market.
Ownership of technology is an advantage that HP will continue
to invest in under Belluzzo, whenever possible, to drive
increases in market share. This can be good news for a
division like CSY that leads in database technology and
multiuser system performance using its own engineering.
PC growth at HP has been stout under Belluzzo's direction,
showing Belluzzo's other forte: management of manufacturing
quality. Just a few years ago the company had eked out a spot
in the top 10 PC vendors; this quarter InfoWorld placed HP in
the top five PC sellers. HP improved its position by lowering
prices while maintaining quality and service - the kind of
moves a large company makes that a Dell or Gateway can only
envy. In printers and in PCs, cost containment is the second
commandment; reliability out of the box is the first.
Since the HP 3000 has both engineering and quality
attributes already working for it, Belluzzo's appointment
might seem to have little impact on CSY customers. Not so: HP
is hoping to develop a channel as robust as its printer and
PC distribution for its server sales. Margins are dropping
steadily for all systems - printers with a relatively simple
RISC system, as well as workhorses like the 3000 whose RISC
processors are wired to advanced subsystems and operating
environments. The more channel HP builds, the better it
insulates itself from the commodity wars in the hardware
business.
The challenge to Belluzzo and the rest of HP is how to
build channel for these more complex products. In the 1980s
when HP convinced PC software developers to write PCL drivers
for their applications, the LaserJet could ride herd over the
booming Windows PC marketplace. No single API is as central
to sparking a channel for complex systems such as HP 3000s.
The new 64-bit RISC API initiative might be a contender for such a role.
The other project sure to be high on the list for HP's new
computer chief is containing manufacturing costs for servers
like the HP 3000. HP's release promises that his group's
"outstanding cost structures and understanding of high-volume
manufacturing can be leveraged on behalf of other parts of
HP." CSY has made these breakthroughs before, when it
released the Nova 9x7 line and the Kittyhawk 9x9 line. Look
for 1996 price reductions in the 9x8 servers, leveraged in
part as a result of these kinds of manufacturing
efficiencies.
One area that should attract Belluzzo's interest while
building channel for multiuser systems is the Commercial
Systems Division's track record for customer focus. Customer
First has delivered satisfaction to HP 3000 users, and more
importantly, created a process for improving the product
while maintaining the installed base's investment.
--
Ron Seybold
The 3000 News/Wire
Independent Information to Maximize Your HP 3000
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