In-Depth

Fiorina’s Ouster Shakes up Tandem, Digital Users

For former Tandem and Digital users, it’s been bumpy going for a while now, and it could get bumpier still

• By Stephen Swoyer
• 02/15/2005

Users of technology solutions from the former Digital Equipment Corp. (Digital) and Tandem Corp. are a hardy lot. Most have soldiered through not one but two landmark acquisitions, after all, and—before last Wednesday, at least—looked to have a reasonably secure, if uninspiring, future ahead of them.

But with the ouster of CEO Carly Fiorina, the future of HP’s Digital and Tandem technology assets suddenly seems uncertain. It was Fiorina, after all, who masterminded HP’s controversial (and bitterly contested) acquisition of the former Compaq Computer Corp., which, during its reign as a late-1990’s technology high-flyer, purchased both Tandem and Digital.

For users of Tandem’s NonStop Himalaya and Digital’s VMS, OpenVMS, and Tru64 Unix operating environments, it’s been a bumpy ride. Compaq had cut its teeth in the low-margin PC space, and—at that time, anyway—had comparatively little enterprise experience. Tandem, for its part, had an unmatched reputation for mission-critical stability and reliability, and Digital wasn’t any slouch, either: Its history of innovation rivals—and some would say exceeds—that of IBM and HP.

That made for a shaky transition, according to some long-time users.

“I was never impressed by Compaq, nor did I ever trust them,” says Mike Smith, a senior systems analyst with a southern California financial institution, and an administrator with 23 years of experience on Tandem NonStop systems.

Smith says he was even present at 1997’s International Tandem Users Group conference, at which Compaq attempted to make its case to the Tandem faithful. Needless to say, the PC upstart failed to impress Smith and other users. “It was always my belief they bought up DEC and Tandem just because they had the cash, not because they wanted the technology.”

In this respect, Smith says, things improved slightly after HP finalized its acquisition of Compaq three years ago.

“At first, many of us old-timers were excited. Tandem, like many other Silicon Valley technologies, was sired by the old HP. It felt like Tandem was going home,” he says, noting explicit assurances from Fiorina, in particular, that former customers of Tandem and Digital could rest easy. “Fiorina made overtures early in the merger that the NonStop technology would be kept and supported, calling it 'Strategic Technology'. She fell short of saying it would be expanded.”

But HP, like Compaq, proved to be a less-than-attentive parent. “Soon it became obvious that the 'New HP' was not the 'Old HP.' Still, I prefer the HP logo to the Compaq logo,” he says.

OpenVMS programmer Nathaniel Lim, too, believes that things have improved somewhat under Fiorina’s watch. “I am quite satisfied with their technical support,” he comments, adding that HP has also taken steps to reduce OpenVMS’ total cost of ownership. But Lim also faults HP—like Compaq—for not doing enough to make OpenVMS a viable platform for the future. “My main problem is working with the OS is a career downer. I cannot parlay it into a lucrative career because so few companies are using it now,” he indicates.

At this point, he says he’s unsure what Fiorina’s departure will mean for HP’s OpenVMS assets—although he believes the company may already have squandered a golden opportunity. “I am afraid that the computer line of HP—especially operating systems—has a lot of catching up to do,” he concludes. “Unless the OpenVMS division makes itself more price-competitive, HP is simply an OS maintenance shop at this juncture.”

Jay Madore, a NonStop Mission Critical Consultant, also harbors no ill will toward Fiorina or HP. After all, he points out, users of orphaned operating environments such as NonStop, OpenVMS, and Tru64 are rarely going to be as forgiving of a step-vendor as they would be of the original company.

“I personally experienced a big improvement in support with the HP takeover of NonStop,” he confirms. “I have been happy with the ongoing performance improvements and I am anxiously awaiting the Itanium based servers.”

While there’s talk of a big shakeup at HP, Madore remains optimistic. “I personally don't think that Carly's departure will have any negative effects on NonStop in the near future,” he says. “Only time will tell if the next CEO will truly appreciate the NonStop jewel in the HP crown. I can only hope that NonStop will be given more attention—but if there are no changes in the executive team that supply the CEO with info, then I don't see why things would change.”

The big question now that Fiorina’s gone, says Gordon Haff, a senior analyst with consultancy Illuminata, is whether her Big Vision of HP as a systems and services vendor on par with IBM will also get nixed. Financial analysts say that HP’s printing and imaging division is really its only stellar performer, Haff points out, and there’s a perception that the Compaq acquisition, and the orphaned technology assets that came along with it, are holding HP back.

As a result, there’s once again speculation that HP will be broken up into separate companies. “I’m not necessarily as convinced that there will be a break up or even that there should be a break up at HP as some people seem to be,” he stresses. “However, particularly given the fact that the most obvious core competence is HP is in media and imaging, I think it entirely possible that HP could end up focusing its energies more around that area. One way obviously to do that is to split [it into] separate businesses.”

For this reason, Haff concedes that there’s some cause for concern among NonStop, VMS, OpenVMS, and Tru64 users.

“I think it is very reasonable that they have some concerns here. Particularly, the legacy systems folks,” he comments. “A new CEO is going to make changes, which I personally don’t believe is going to mean necessarily throwing customers who are a good revenue stream overboard. But it could very well end up resulting in fewer resources or less of a focus on some product line or some product segment over time.”

CEO Legacies

When speculating about Fiorina’s legacy, it’s tempting to think of former Digital CEO Bob Palmer, who—fairly or unfairly—is often blamed for hastening Digital’s collapse into irrelevance. Illuminata’s Haff believes this is an inappropriate comparison, however. “In all fairness to Bob, there were a lot of problems at Digital when Bob came in. Ken Olson had been the founder, and he deserves a lot of credit for what he did in the computer industry. But the fact was that there were serious structural problems at DEC when Bob took over, although he certainly didn’t make things any better,” he comments.

In this respect, he concludes, Fiorina was in much the same boat. “Some Carly-bashing is certainly deserved. I think it’s also well worth remembering that HP was in a bad place when Carly came on board, and Compaq was not in that great a place when HP acquired them.”

Rightly or wrongly, says Tandem veteran Smith, Fiorina’s legacy will be of a different kind for many NonStop pros. “At the end of Carly's reign, most of my long-time Tandem friends are unemployed, underemployed, or running a small non-technical business,” he observes.