HP Profiles: A Conversation With Joe Beyers
March 9, 1999 may have just been another day in your life. Perhaps you celebrated abirthday or anniversary. Or, you may have finally gotten that "big promotion"with the "big office." But at HP, that date rings out as a "majormilestone" in the company's history. "For the first time we've pulled togetherall of our key software and solutions activities around the Internet into one integratedorganization," says Joe Beyers. As General Manager of that newly created "oneintegrated organization" -- HP's Internet Business Unit (IBU) -- he's responsible forestablishing HP as a leading innovator in a brave new world of "E-services."
"E-services is our view of the evolution of the Internet as it moves into what wecall Chapter 2 of the Internet. Our intent is to drive forward aggressively to achieveleadership in this E-services-centric world. We will do this by driving our strategy[with] our key partners by bringing to bear this technology which we call'Freemont.'" Beyers and his IBU troops have three overall objectives: 1. Grow a verylarge software solutions, appliance and e-services business; 2. Impact and grow HP's valuechain revenue; 3. Establish HP in a premier position as a leading Internet innovator.
Like any statement of technical direction and strategy -- it sure sounds good. To fleshout what it all means for HP's partners and customers, George Thompson, Editor-in-Chief ofHP Professional spoke with Joe Beyers about HP's efforts to become a big-time Internetwheeler and dealer.
Editor's Note: In early April, as this issue was going to press, HP's E-servicesdivision announced a $100 million investment in BEA Systems. The two companies haveintegrated HP Praesidium's VirtualVault with BEA's WebLogic Server and BEA TUXEDO. Throughthe integration of these products, customers build secure Java-based Web applications thatact as an application server within the VirtualVault environment.
HP also announced ChaiAppliance Plug-and-Play, a new software product that is expectedto help advance HP's goal of making transparent connectivity of appliances a reality.
HP Pro: Can you describe all the parts of HP that were brought together for the IBU?
Beyers: The IBU [now] consists of the VeriFone organization, which was acquired by HP[in 1997] and had been acting as an independent subsidiary, and didn't have a lot ofstrategic linkages to [HP]. My previous organization which was the Internet SoftwareBusiness Unit [the ISBU; formed about 14 months ago] started several software businessesand the Internet Application Server Division [IASD], which was developing such software asWeb QoS and driving many Internet partnerships as well. We pulled all this together inthis one organization. This is really important because when we had a lot of fragmentedparts, it was difficult to have an integrated strategy and to move our position forward.
HP Pro: How does that all translate into better products and services for HP customers?
Beyers: We have full value-chain responsibility across HP for driving HP's strategyaround supply-chain solutions and customer interactive solutions. We also have strategicleadership for our security strategy across the company, in addition to the securityproducts. And we have responsibility for driving these overall e-services across theentire company.
HP Pro: In the past, you've described your strategy as bi-modal. Does that still applynow?
Beyers: Yes. When you look at the software components in the organization our objectiveis to achieve category leadership in those areas. And that means we'll drive thosesoftware areas aggressively in capabilities and pervasiveness. And that means acrossmultiple platforms and multiple SI partners.
But in addition, we're taking those elements and putting them together into theseend-to-end business solutions that solve a broader business problem and with a set ofservices to deploy those into the market place.
Bi-modal is the concept of running [a] software business and also being what I call ananchor-tenant of these end-to-end business solutions that will have our software productsand third-party software products in them as well.
HP Pro: Can you give some examples of what you mean?
Beyers: We have already announced OEM relationships with two security companies: withAccent for firewalls and Aventail for VPN products. We've also announced relationshipswith Arriba, a provider of procurement software and networks. The joint relationship withthem converts that into an e-procurement service. We also announced Vialink that is also aprocurement portal service for retailers and distributors. And we announced an equityinvestment in S1, an Internet banking supplier, for outsourcing services for banks. And weannounced a joint venture in Japan to create e-business solutions for the Japanese marketwith Hitachi and Mirenbeni.
HP Pro: I've heard a lot about the information utility model. Does that still apply?
Beyers: We've developed a crisper articulation of what that means. And that's whatE-services is. To put this in context, Joel Birnbaum has been philosophizing around thisconcept of information utility for over a decade. That concept is becoming a realitytoday. It's the underpinnings of this e-services world.
HP Pro: So, the term "information utility" has been generally replaced withE-services?
Beyers: Yes. That's correct.
HP Pro: What do you hope to accomplish with your $150 million E-services advertisingcampaign?
Beyers: We're starting the process of educating the world about the emergence of thisE-services concept. And it's resonating very, very well. People see this emerging as wedo. It's been very well received. [The campaign] will become more explicit over time aboutwhat E-services means and explaining HP's role. And then it will branch out to other mediatypes.
HP Pro: Whom are you targeting at this juncture?
Beyers: It's a pretty broad business and consumer educational thrust. It's more of anawareness campaign at this stage.
HP Pro: Maybe it will help our readers, and me too, if you can put it in some kind ofcompetitive context. Do you see your campaign as similar to or competing with IBM in termsof the way they presented their role in e-business?
Beyers: IBM really is pushing and promoting in today's e-business and e-commerce world.And that's what their ad campaign and their business thrust is all about. We arestrengthening our capabilities in that space as well; but we are also moving aggressivelyto the next wave -- of E-services. We truly are a technology leader and thought leader inthis space.
HP Pro: What's your sense of people being able to grasp the E-services concept, whichis really a new paradigm, at this point?
Beyers: I think there was some concern about whether that would be a problem. But weare finding that people are grasping it. They understand what that means, they see theearly indication of it.
HP Pro: I think many people will be skeptical about HP's marketing plans.
Beyers: You should think of March 9 as the death of HP's stealth marketing program.
HP Pro: Another term you've used -- correct me if I'm wrong -- is virtual corporation.How does the virtual corporation fit into the E-services world?
Beyers: The term virtual corporation was how I was characterizing the kind ofe-business and e-commerce solutions that we were creating with our current softwarecapabilities.
Think of a customer's front office interface, which links into their back office, whichlinks into their demand and supply-chain partners. Customers interacting with the frontoffice result in actions in the back office, which results in actions with your partnersand your supply chain.
While the virtual corporation was a concept to describe how these solutions are linkedtogether in a transparent way, we are using E-services as a higher level umbrella.
HP Pro: From what I understand, Lew Platt wants HP to become a major software companyor at least be recognized as a major software player. But I think it's difficult for thosemost familiar with HP to think of the company as such.
Beyers: You should think of this [E-services thrust] as the meat behind HP becoming asoftware and solutions provider.
HP Pro: What company keeps you up at night?
Beyers: Some company that isn't even on our radar screen. HP's biggest threat isprobably a company that doesn't exist today.
HP'S IBU: THE BUSINESS OF E-BUSINESS
HP's new Internet Business Unit (IBU), led by Joe Beyers, consists of five divisions:
- E-Services Division provides the software infrastructure to enable e-business solutions and services, including the software environment that spans from servers to clients to appliances.
- Internet Security Division is responsible for providing software products that enable end-to-end security of e-business solutions.
- VeriFone Division develops Internet software and appliances that enable secure financial transactions.
- E-Commerce Division develops software that enhances e-commerce and customer-relationship management solutions.
- E-Business Solutions Division develops e-business solutions that are replicated within vertical industries or selected horizontal segments. Examples include e-banking, manufacturing, business-to-business e-commerce vertical solutions as well as horizontal solutions in security and management.
MINDING YOUR OWN BUSINESS WITH HP'S CHANGENGINE
Changengine is perhaps the least well-known product in HP's IBU software portfolio. For example, version 3.0, released this past December, is now available. Initially developed behind the doors at HP Labs (Palo Alto, Calif.), Changengine was launched in commercial form in July 1998 and known as Changengine 2.0 Admin Edition. "It was focused primarily at the operational or administrative level where many organizations were looking to reduce costs, increase efficiencies, increase internal and external customer satisfaction," says Dave Hinman, general manager for the Changengine Operation. "The 3.0 version is a huge leap. We get a chance to tie into applications inside the enterprise. Instead of being able to do integration at the client level, we can do integration at the server-application level."
Changengine is best described as a technology that automates business processes across applications, organizations, business partners and customers. "We're moving [Changengine] into the line of business world where in any enterprise there could be up to 70 specific line of business processes that are critical to the success of the company.
"We're working with partners to verticalize [solutions]." For example, one company, is creating a "business process library that [will] contain up to 46 different pre-canned HR processes [e.g., hiring, firing, background checks, drug testing, etc.]. And we are looking to do that in other areas." He also mentions a product called Tia from Document Access (Rotterdam, Netherlands) that's geared towards the property and casualty side of the insurance industry.
From an IT perspective, Changengine "provides an environment that helps to externalize the business logic that, in the past, has been embedded in applications; pulls them out, creates an abstraction and stores them in process design maps. As your business changes, you can make changes to those abstracted process maps without having to recode your applications." For example, Shell Expro (Aberdeen, Scotland) uses Changengine to model and track engineering change orders in designing offshore oil platforms in the North Sea.
"It's also critically involved in providing a way of connecting across the Internet," emphasizes Hinman. For example, GE Information Services (Gaithersburg, Md.) built a retail supply-chain management extranet for Tesco (Cheshunt, Hertfordshire, U.K.) with Changengine called the GE Trading Information Exchange (GE TIE). GE TIE is an example of another favorite HP E-services concept: the virtual corporation. "We provide an environment from the supplier to the customer through the front and back office environment. And that is where application integration is essential."