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December 2001, Week 1

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george c stachnik <[log in to unmask]>
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george c stachnik <[log in to unmask]>
Date:
Tue, 4 Dec 2001 18:31:43 -0600
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In the 24 hours since I posted the article that started this thread,
there have been about a dozen responses.  I'd like to try to make
one final attempt to answer some of the questions that have been
raised in those responses.

One of the emails that was sent to Carly (and forwarded to me)
accused her (probably quite justifiably) of having "never logged on
to an HP e3000."  The writer went on to explain in detail how his
HP e3000 (which was, as I recall, a model we haven't sold for years)
hadn't crashed in months, and pointedly asked our CEO "Don't you
know how reliable the HP e3000 is?"

I'd like to suggest that the question of what Carly knows about the
reliability of the HP e3000 is hardly the point.  Actually, I think
a far more important point was made by one of the people who
responded to my original post:

John Burke wrote:

> MPE, IMAGE and the HP 3000 were doomed for the
> very reason they were celebrated: they were extremely reliable and
> efficient.

If I may, let me take off my HP badge here and speak only as a guy
from Chicago who knows a little about computers.  At first blush, John's
statement is pretty astonishing.  How could reliability and efficiency
"doom" a product?   Unfortunately, to those of us who work in marketing,
it's
not a mystery at all.  When push comes to shove, most of the buying
decisions that I've seen made in the past 10 years have been made based
on three criteria: price, price and price.

Whenever HP made any effort to sell HP e3000s (or anything else) on
overall cost of ownership, reliability or ease of use, the discussion
quickly
got bogged down down in technical details, side-discussions and finger-
pointing by competitors ("oh yeah - well our products are *just* as reliable

as your HP e3000!  Prove I'm wrong!").  This would ordinarly go on until the

buyer eventually knuckled under and made a decision based on something
he could readily understand - i.e. the price.

>    Sad, isn't it, that HP could not find a sufficiently profitable
>    business model for such a reliable and efficient system.

With my HP badge still off, let me say that if you want a scapegoat,
blame the commoditization of the computer business.  As more and
more buying decisions are made based on price, vendors inevit-
ably concentrate on price above all else.  Reliability and efficiency
are not bad things - they're just not relevant.  And if you ever chose
a $600 PC over a $1200 model that was better built, then you're part
of this trend.

It's not hard to see that when the computer industry began moving
in a commodity direction, a lot of pressure came to bear on products with
high quality (and high prices to match).  You ask why we didn't
promote the reliability of the HP e3000?  Customers wouldn't talk
to us about anything but price.  In many customers' perception,
price was the only thing that was real.  We could talk about reliability,
ease-of-use, and "worry-free business critical computing" 'till we were
blue in the face and all the typical customer heard was the price
tag.  If you're a sales rep who's trying to put 2 kids through college,
you only need one experience like that to conclude that in the future,
all you're going to spend your time on are the products with the lowest
prices.

That's why Linux is doing so well.  Some people have tried to explain
Linux's success in terms of it's technical superiority to Windows.  Humbug.
Linux's success can best be understood in the context of a quote
from an IT manager who was buying his first Linux-based solution.
According to the story I heard, he said, "So let me get this straight.
I pay you $50 for this CD, and I can make as many copies of it as
I like and install it on as many machines as I want, and I don't have
to pay you another penny in licensing fees - is that right?"  Now there's
a guy who's not buying "worry-free-business-critical" anything unless
the price tag is the lowest one on the block.  And he's very typical
of the IT market today - if it ain't price - it ain't real - period.

In a commoditized marketplace, if you do manage to stay in the
running long enough to make the claim that your product is more
reliable than somebody else's platform, you are quickly challenged
to "prove it."  And reliability is a very difficult thing to prove.  There's

no "TPC-R" benchmark for reliability.

The only folks who won't ask for proof are those who already *have*
one of your products.  People who already are using an HP e3000
already *know* how reliable and easy to use it is, so they don't ask
for proof.  That's why the HP e3000 gradually morphed into an
"installed base business", and why HP chose to spend our advertising
dollars in installed base pub's like HPWorld, Interact and the Newswire
instead of on the Wall Street Journal or Computerworld.  Smart companies
spend their money where they think they'll get some return on it.

The commoditization of the computer industry is a well-documented fact.
(See http://www.business2.com/articles/mag/0,1640,17827,FF.html)
But personally, I believe that there is a limit to this trend.  Eventually,
the
customers of even the most commoditized industries wake up one
morning and say to themselves, "Hey - this commodity coffee tastes
terrible" and next day, out of nowhere, a company like Starbucks
appears, creating a market for coffee that costs $3.00 a cup instead
of $0.30 a cup.  The question is, is the IT industry anywhere near
commoditized enough for the pendulum to begin swinging back the
other way?

A few years back, CSY went through a period during which it made a
number of pretty aggressive statements about the future of the HP e3000.
Wirt recently posted part of an article that a former CSY marketing
manager wrote entitled "The HP 3000 -- Here Today and. . . Here
Tomorrow."  I remember when that article was published, it was applauded
by HP e3000 customers who felt that Hp was finally getting behind
the HP e3000.

Wirt faulted HP for not keeping the promises that the author of that article

made.  I suspect that the writer of the article believed that the IT
industry
had reached the point that I'm talking about.  I think he believed that
there were customers out there who might be willing to pay premium
prices for systems that had the "stay-up-ability" of the HP e3000.  Conse-
quently, he made some pretty aggressive statements on behalf of
the division about the future of the HP e3000 platform.

Unfortunately, the author of the article that Wirt posted was wrong.
Maybe it was a case of "too little too late" - or maybe people overestimate
how much influence articles, advertisements and other marketing
tools really have.  I'm inclined to think the latter.  But before you call
your
congressman to complain that HP doesn't keep its promises, read the article
that Wirt posted one more time.  The author raises a question, rhetorically,

"When is MPE going away?"  And he *never* answers the question.  The
article makes no promises.  He states an intent ("Let's just get rid of this

nonsense about the HP 3000 going away.")  But he never promises that
the HP e3000 would be around forever, or even for another five years.   HP
never promised that the HP e3000 would be around forever.  And if you
thought HP did promise any such thing, then be careful that you're not just
hearing what you want to hear.

All that having been said, is MPE/iX dead?  Certainly not yet.  HP has
stated
that there will be another release of MPE/iX (probably called 7.5) next
year.
This will be in support of the PA-8700 chip; this represents a last
performance
"kicker" for the HP e3000 family.  But what about after 2006?

I've been criticized in this forum for not saying anything about the
"OpenMPE"
discussions that have been going on in this newsgroup. I'll say this much.
If I haven't said anything, it's because so far, there's nothing to
say.  Although there are a number of people inside of HP who are
investigating
potential MPE futures, no decisions have been made.  Let me be quite clear
on that point.  HP hasn't agreed to anything, nor has the company ruled
anything
out.  If you support an OpenMPE initiative, you need to make a business
proposition
to HP and show that will have real value to customers going forward.

And that, as Forrest Gump said, is just about all I have to say about that.
At least for now...

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