Analyst briefing shows HP’s changing face

But CEO still misses MPE/iX in platform comments

Hewlett-Packard has become a company where one person in six has worked for the firm a year or less, a fact revealed in an all-day briefing of security analysts last month. Despite all the staff changes, the company has no plans to shed any of its computing platforms — although the CEO missed a chance to mention its investments in MPE/iX to analysts.

Some analysts at the semi-annual meeting asked Fiorina and a host of HP executives if it might make more sense to consolidate on a single computing platform. Throughout the day Duane Zitzner, president of HP’s Computing Systems group, as well as others painted a picture of a company stronger because of its varied offerings.

“This is a choice we’re sticking with, to keep the portfolio together,” Fiorina said. “The power in this company comes from being in the computing systems business, in the imaging and printing business, as well as in services and software.”

The CEO related HP’s desire to reshape the printer as a standalone, Internet enabled device, a system-level platform. But until that happens, the company is committed to R&D investments in its existing systems platforms.

In her opening remarks to those analysts, the details of the HP 3000 business once again escaped Fiorina. “We are making up for under-investment in the past,” she said. “Particularly in our Computing Systems business, we are making investments across two platforms now, PA-RISC and IA-64; we’re making investments across three operating systems: HP-UX, NT and Linux, and as well we are investing for future growth in software and storage.”

The scope of HP’s comments throughout the day highlighted few individual platforms, though the new Superdome servers were often mentioned. Fiorina said the company has a goal to consolidate products as well as platforms in an effort to maximize R&D productivity. It will take at least three years, but the company intends to consolidate its high-end NT and HP-UX server business onto Intel’s Itanium processor family.

HP has created a new Technology Council inside HP to study these kinds of decisions, Fiorina said. It’s chaired by the company’s chief technology officer Rich Demillo, and populated by chief technology officers of each of the HP businesses. “The group is really focused on technology vision,” Fiorina said, “the things required to drive key interoperability issues like security across the product line.”

HP has focused its performance metrics on external benchmarks, she added. HP will be tying employees’ pay, starting with its senior-most leaders, “to how we score on total customer experience.” In 2002, bonuses will be based in part on leadership capabilities measured by employee surveys.

“Culture and behavior are always a big part of transforming a company, and in this case the fabled HP Way and the culture of HP is in some ways both our greatest strength weakness. We believe the HP Way is a meritocracy focused on performance.”

This updated vision of the HP Way could be easier to sell to the new employees of the company, of which there are many. One third of the company has been with HP less than three years, and 16 percent of the employees have less than a year of service. Of the 12 members of HP’s Executive Council, seven took new posts in HP during the last year.

“We are embarked upon substantial, systemic change,” Fiorina said. “The reinvention process we’re in at HP is not a tweak job.”