| Front Page | News Headlines | Technical Headlines | Planning Features | Advanced Search |
Click for Whisper Technology Sponsor Message

April 2000

A cozy, captured environment

NewsWire Editorial

The hail of wet drops spattered our car windows as we slid along Highway 20 on a Saturday afternoon. To the left and right soared spruce trees, soaked from the seacoast mist and insistent rain. The California highway climbed for 30 miles to a summit, then fell away in graceful hairpins off the King coastal mountains. Dottie spun the wheel left and right like a fighter throwing combinations in the late rounds. We were arriving at the Sonoma County coast — and soon to leave the familiar world of commerce and communication.

On our trip to Mendocino, I felt like we were entering a kind of Shangri-La, a land where the status quo was shifted for the betterment of the community. Weeks later, the distinctions remind me of how HP e3000 customers’ world harbors its own differences, policies in place to protect the value of owning a system. Like the remote land of Shangri-La, the 3000’s market includes residents who resist HP’s tradition and policy.

The sea view was enough to make me pause with mouth agape, gray rays cutting through the trees as the last of the daylight dropped below the Pacific horizon. In the fading light I dialed my cell phone to return a call from my niece, who was working on a school project and wanted to interview me. We made plans to talk after Dottie and I had arrived at the Sea Rock Inn, tucked into a rise on the Mendocino coastline. Once we got to the inn, however, we learned how far Mendo wants to be from the rest of the world. It’s a city without wireless phone service. I called my niece from a pay phone.

There is long distance phone from Mendo, but only on land lines, most buried carefully. This is a place that values its ambiance above all. A cellular tower was proposed recently, but the residents shot the idea down. California law protects scenic seascapes, and the citizens used the law to keep cell service out of the town. This made for a pleasant three days for us, living in a world where cell phones didn’t go off in restaurants, and people drove with attention focused on the road. And the view, when the rains lifted and the sun’s rays poured through the clouds like waterfalls of light.

It was easy to see the initial benefits of being somewhat cut off. Initial benefits surface in the HP 3000 market, too, when customers learn how reliable and speedy their systems are. If this comes at the cost of using technology not entirely in the mainstream, well, customers can handle that like we adapted to a lack of cell phones. Extra effort to recruit trained staff bridges the difference when relying on MPE/iX.

But the lack of wireless service in this beautiful coastal town turned out to be a signal of its overall mission. Mendo has no chain stores, either. In several days of investigation we found no Starbucks, Safeway food stores or McDonalds. Home Depot was nowhere near the town. Shopping there is a local experience that invites you to be truly present, part of the community. You partake of goods from merchants who are as indigenous as the sea lions barking on the rocks.

It felt idyllic, but we didn’t have to make a life there, just enjoy the visit. If we didn’t like the captivity of the marketplace in Mendo, we could drive up Highway 1 to Fort Bragg, a larger community with less protection for its scenery and commerce. We had an option to leave Shangri-La, though we never did. We kept holding out for a view from our bathtub window of the grey whales offshore, migrating for food.

Such a Shangri-La exists for some e3000 application providers as well. If they sell an HP 3000 into a company as they sell their software, HP policy protects them when the customer wants to buy larger or additional systems. HP calls the policy “compliance,” meaning the new systems sellers must comply with HP’s rules of sale. The rule is to always add more than hardware. Add value, or you don’t get to make the sale.

HP maintains its compliance policy to protect its software suppliers, those who sell what the e3000 division likes to call solutions. The financials to run a lumber company. Software that administers a managed health plan. The heart of a credit union, 911 dispatch service, or a Web-based merchant. By protecting solution suppliers, HP says it protects the customer, who otherwise wouldn’t get anything but goods when they bought an e3000.

What has apparently happened in this market is that the high mountain passes that created the Shangri-La are now patrolled by resellers, software companies intent on keeping business they first won when installing an application. HP says they get to do this by adding value. But the definition of value is left open for debate, a discussion the customer rarely engages in. If a solution supplier like HBOC gets challenged on price, it can try to derail a sale. The result is that customers are captured, left only with HBOC as their source of hardware.

Some residents of the e3000’s bountiful community have looked for more options when buying very big systems. They want to shop on price, and have no desire to see any value added when they purchase more than a quarter-million dollars of hardware. Their object is to keep their investment down, probably to help keep their companies profitable.

HP’s reply to these companies is that they will have a hard time buying the HP e3000 strictly on price. Instead, when they buy, these companies will have to consider value: the intersection of higher benefits with higher prices. As in, “it will cost more, but it will be well worth whatever extra you pay.” HP has gone so far as to say the e3000 would wither in a marketplace where its new customers shopped price rather than value.

It may well be right, but in the 21st century that kind of outlook seems overprotective and defensive. HP’s already cut down broker commerce in this market. Compliance is another way to make everyone shop at the same store. We don’t know if compliance exists in channel policies for HP’s Unix, NT or Linux business. But telling a customer they only have one source of purchase — or face a business debate to win if they want to shop elsewhere — well, that doesn’t sound like a message from a vendor confident in value, or the loyalty of its solution suppliers.

HP explains that it doesn’t want its resellers competing with each other on price; it wants them to compete with other vendors (IBM, Sun) for business. Keeping down the competition feels unfair to some 3000 owners, especially those who remember what it was like to shop on price. Despite HP’s headlong focus on its newer, application software-based customers, there are many sites out there who have the know-how to find added value on their own. Many supplied it themselves, with trained IT professionals like you to configure and analyze purchases. Some used to get this value from HP, which has been dropping out of the value-added business, leaving that mission to its resellers.

It’s always risky to question the status quo in any community. We didn’t complain about the lack of cell service, or start a movement to get an Einstein’s Bagels, while visiting in Mendo. But we didn’t have to live there. Your company lives in the channel of a system manufactured by only one vendor. It’s cozy, but at times may seem captive.

If HP maintains rules to keep customers committed to a single source of hardware, then customers may need HP to enforce rules about service levels that customers can expect from those exclusive sources. The old commercial rule that says unsatisfied customers can go elsewhere for hardware doesn’t seem to apply to HP’s compliance plan. We encourage all e3000 customers to be aware of where they can shop for new systems, especially when buying solution software. Knowing where resources lie is the kind of instinctive intelligence you can expect from any mature community — whether it’s whales, or e3000 customers.

— Ron Seybold 


Copyright The 3000 NewsWire. All rights reserved.