Think What a Difference a Year Makes

Jean reflects on the past year at HP.

Think back to a year ago. HP was virtually leaderless, engaged in a search for a new CEO. The company was plagued by lackluster sales in Asia, lagging UNIX sales in North America, an organizational structure that seemed to cripple innovation and nimbleness, and the widespread notion that the Internet revolution had left it sitting on the sidelines.

By the time Carly Fiorina took charge last July, HP had begun to turn things around. Asian problems were diminishing. The company was spewing forth new products and new initiatives. Lew Platt, trying to make HP more nimble, was spinning off its test and measurement operations into a separate company, Agilent Technologies. As Fiorina took the helm, HP picked up the pace.

Building on efforts begun before Platt retired, Fiorina consolidated what she called HP’s "silos" into four main groups: Two customer-facing organizations – the Enterprise and Commercial Business, and the Consumer Business – and two product and platform organizations – Imaging and Printing Systems, and Computing Systems.

Fiorina also hammered hard on e-services, identifying three new business models flowing out of them: apps-on-tap, next-generation portals and dynamically brokered services. And she established "strategic choices," or priorities. These include a commitment to both UNIX and NT, storage, PCs, services, and printing and imaging. Fiorina also said HP intended to exploit its position at "the intersection of e-services, infrastructure, and appliances."

It wasn’t just talk. HP has teamed up with service providers like Qwest and USinternetworking to deliver apps-on-tap. It has entered the portal space, first by focusing on enterprise information portals and then, this May, by jumping into the market for trading exchanges and personalized portals. The company even introduced a new business model for portals – Channels-on-Tap.

Dynamically brokered services are core to HP’s e-services strategy, and they rest, of course, on the company’s e-speak technology. HP has set up a developer’s site to promote e-speak and has integrated OpenView, its widely used system management software, into the new technology.

Then there are the other areas Fiorina mentioned: UNIX and NT, storage, PCs, printing and digital imaging, and infrastructure. While UNIX sales are healthy, HP needs to do better in the North American market. On the NT front, the company has unveiled new NetServers and programs and services for users migrating to Windows 2000.

Storage – well, the announcements just keep coming. Equally important, Fiorina has consolidated the separate storage groups once defined by platform into one large organization.

As for the lucrative printing and imaging business market, well HP provides about half of the printers sold.

As far as infrastructure is concerned, HP has introduced its IP-Billing-on-Tap and Infrastructure-on-Tap initiatives. These are intended to further HP’s vision of Internet utility computing – of digital information moving as dependably as water flowing from the tap or flowing as effortlessly as electricity through a lamp.

In all its interests in new markets, HP didn’t overlook a loyal part of its installed base – HP 3000 users. The HP 3000 has morphed into the HP e-3000, an Internet-ready machine.

This all stacks up to a lot of progress. But, HP still has a way to go. It remains a hardware vendor and must rely heavily on partnerships. It’s essential that e-speak catch on. And the competition isn’t standing still. HP’s services business remains a fraction of IBM’s, and Sun continues to cut a wide swatch in the high-end UNIX market. All that aside, HP’s fortunes look much brighter than they did a year ago.

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