Carly exits amid 3000 customer wishes
After board demands CEOs resignation, 3000
sites ponder new future
The CEO who hawked change as HPs new mission
and so sparked the 3000s exit from the companys lineup
has left HP in a resignation that made some customers hope for
a change in HP to alter the 3000s fate.
But HPs board of directors, after demanding Carly
Fiorinas resignation on Feb. 9, have shown no signs of changing
the companys commodity and consumer-driven strategy, one which
hurried the 3000s HP exit.
Interim CEO Bob Wayman told stock analysts the next CEO
will need to march to the tune Fiorina composed during the five-plus
years she headed the company.
The company wont change because its board
hasnt changed much. Venture capitalist Thomas Perkins came on
board in early February, but the list of directors includes a group
of officers who have approved Fiorinas plans to grow HP. The
board said it removed its CEO and chairman because she did not
execute HPs strategy well enough. The companys earnings
growth has disappointed analysts in recent quarters.
Wayman said during an analyst briefing that the board is
looking for a CEO to work with the current strategy: Offering a broad
portfolio of products while operating a printer business integrated
with the rest of HP.
While they wont preclude any open discussion
on a new CEOs view of what the future strategy should be,
Wayman said, we are looking for a CEO who also embraces that
strategy, in all probability.
Fiorina, who earned $44 million in signing bonuses to join
HP in 1999, left the company with a $21.1 million payout. Her
contract also provides $50,000 in job counseling services, a point of
irony that didnt escape HP 3000 customers who have seen careers
ended or altered after the 3000s cancellation.
She was the executioner, said John Dunlop of
3000links.com She chopped and pruned product lines and
employees. Unfortunately for the HP 3000 community, the HP 3000 was
one of the early casualties. Thus she became the name synonymous with
the death of the HP 3000.
Another customer said Fiorina represented a strategy of
judging a customer by what theyve bought lately. The 3000
customer has been expected to buy what HP produces after it said it
wont offer the HP 3000.
Carly was viewed by many to be of the mindset that
our value as customers was limited to our wanting to buy what HP had
to sell, said Russ Smith of credit union Cal State 9. It
was not that our value was inherent as customers, period and
that HP should produce what we need.
The majority of customers were realistic about how much
change would filter down to the HP 3000 issues that remain at the
company. HP now has bigger problems such that this issue
wont even be on the radar, said John Wolff, the CIO at
LAACO, Ltd and vice-chair of OpenMPE. Not only did they break
the HP 3000 product line, but Carly broke the whole company 60
years to build it, six years to wreck it.
Fiorina was the first CEO ousted from HP in such a public
manner: Stories of the forced resignation aired on all major US TV
networks; HP called a press conference to explain on the day it
removed Fiorina. She was not the first to leave involuntarily,
though. Another HP CEO, John Young, was politely retired when
Dave Packard came back out of retirement to put the company back onto
the right path in October, 1992, Wolff said. Young was
paid $1 million for unused vacation time.
An enterprise change?
Some 3000 customers said they were hopeful a better
enterprise server strategy would emerge under a new CEO. The majority
of customers responding to a spot poll by the NewsWire reported they
were migrating away from the server, a position that has them
considering HPs server alternatives. For many, the damage has
already been done.
We lost all faith in HPs strategy some time
ago, said Don Baird, president of EnCore Systems. We do
not rely on anything HP except our 3000s, which we are replacing with
HPs change of heart is having an impact on a choice
of vendor for migration sources. At the Anchorage, Alaska light and
power utility, systems analyst Wayne Johnson is moving to Windows
but HPs moves with the 3000 make the utility wary.
Part of my companys fear has been the HP 3000
is going away, so lets steer clear of any other HP
product, he said. Could the change mean that the HP 3000
will be resurrected and not meet its demise in 2006? Our Windows
platform is not HP.
Some drew a direct link to Fiorinas strategy and the
slide of HPs enterprise business. HP lost its personality
under Carly. Their niche was solid, reliable computing platforms, not
PCs and not iPods, said John Lee of reseller Vaske Computer
Solutions. Hopefully, the new CEO will re-focus the company on
its core strengths, one of which used to be enterprise
Even those moving to HPs Unix systems want to
believe more change in management is on the way. I really hope
the shakeup continues down the line, said a long-term HP 3000
manager who wanted his name withheld. At his firm, HP 9000s are
replacing HP 3000s. Maybe we can get back to a point were the
customer and our needs come first, and the profits and sales will
follow, he said. Since the Compaq-HP merger, the quality
of our service programs and sales support have dropped.
The CEOs departure wont change much for
Pivital Solutions, a company that signed on for the last year of
HPs authorized 3000 sales and now offers third-party support
for the server and MPE. The only hope I still loosely hold is
that they will sell off the enterprise systems group before they run
it into the ground, said president Steve Suraci.
Operator seeks operations whiz
HPs executives say the company now needs a CEO with
better operational skills. Its top sales officer Mike Winkler, quoted
in a published report from the recent Goldman Sachs Technology
Investment Forum, said HPs fortunes would rise with a CEO like
Lou Gerstner, the IBM leader who came in to turn around that company
in 1992. In that same year, HPs founders Bill Hewlett and Dave
Packard asked LaserJet czar Dick Hackborn to take the CEO reins from
John Young. Hackborn wouldnt leave his home in Boise, Idaho to
take the job and retired a year later.
But Hackborn, an operator behind the scenes in most of
HPs business choices since his retirement, played the lead role
in bringing Fiorina to HP after the company felt it missed out on the
Internet boom during CEO Lew Platts watch. Another report,
published in the wake of the Fiorina ouster by BusinessWeek editor
Peter Burrows, says Hackborn acted as the catalyst to spark the
boards removal of Fiorina.
Now Hackborn and the rest of the HP board will try to find
an operational, COO style of CEO. HP will change CEOs because of
Fiorinas inability to execute, not over her direction.
She had a strategic vision and put in place a plan that has
given HP the capabilities to compete and win, HPs press
release assured investors.
The strategy which Hackborn has pulled HP into
commodity sales like printers, with less direct customer contact
relies on resellers and outside distributors to stay in touch
with all but the largest customers. Typical HP 3000 shops, working
for small and medium-sized businesses, say they have not felt much
contact with any HP operation except its support group.
Working for a small company, I dont feel that
I or my company has ever been part of an enterprise systems
strategy, said John Bawden of health insurance provider
QualChoice, an HP 3000 shop. Generally we are ignored unless we
have the energy and the need to go to HP for something.
Holding slim hopes
Despite knowing the 3000s return is a very long shot
at HP, customers still saw change as an agent that might work in
their favor. My heart hopes that the HP3000 line will be
resurrected, Bawden added, but my mind says that it is
probably too late in the game.
Some customers have not begun a transition, but said they
need a signal soon to stall a migration. I would need a
commitment from HP soon to see any hope of keeping the HP 3000s
here, said Bob Phelan of Perot Systems, managing HP 3000s for
Harvard Pilgrim Health Care. I cant help but wonder,
however, if they might see a surge in 3000 sales if they announced a
change of heart.
Customers have read the ouster as a step away from the
companys commodity focus. it appears that HP realizes
that its time for a new direction, said Connie Sellito of
the US purebred registry Cat Fanciers Association. HP is not
just about printers.
Greg Brown of Peerless Pumps said a migration is going to
be costly and disruptive at his company. A CEO change gives him hope
of avoiding the change, though he realizes many sites are already on
My fear is that it is too late, and that many
organizations are well on their way to move on, he said.
It is not too late for us, though. So I do hope that HP will
quickly change their mind to reinstate the HP 3000 as a product to be
supported and evolved.
Some customers are only hoping HP will keep its 3000
resource in place longer than 2006, if only to aid long-term
If they continued support and brought their HP3000
gurus back to the response center, it would sure make our lives a bit
more tolerable, said Dave Evans of Californias San
Bernadino County schools. We are still rewriting our in-house
apps to run in Windows. We are looking at at least five more years to
do so so if HP extended the 3000s life, it would
definitely help us.
HP has already changed directions in what has appeared to
be a hurry for some customers. Greg Gibbons, the MIS Director at
See's Candies, reported that HP awarded Sees with a Bravo award
for excellence in HP 3000 technology in 2001. This award was
presented to us two months before they announced they were killing
the platform! Gibbons said. Talk about mixed messages.
One minute encouraging us to continue with the platform, the next,
killing it off.
Gibbons shop is underway with its transition
already, but Fiorinas ouster gives him hope of something better
being offered to 3000 shops like his.
I do hold out hope for a change in position now that
Carly is gone, he said. I dont expect HP to reverse
the decision to kill the platform, although I would welcome
Gibbons said Sees wants a way to run 3000 apps on
another HP platform. I believe that they have a chance to do
the right thing for their HP 3000 customer base, he said,
to create a real, viable, operational migration path for their
customers, a solution that will not require coding or porting. A
solution that will allow us to run our apps, both third-party and
A shift in HPs alternatives could win the vendor
more business for its enterprise offerings, he added.
I dont mind buying new HP hardware to be able
to run my applications, Gibbons said. Whats
important to me is to be able to keep running in a supported