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May, 2000

Easy to own, hard to buy

NewsWire Editorial

There are things in the world that have a great value, but are very difficult to purchase. If you doubt that, I’d invite you to my neighborhood for the next Big Trash Day. Sit on my porch as commerce takes a path nobody in power imagined. It might provide some ideas on how to sell HP e3000s.

I don’t mean to suggest that 3000s belong in the trash. But the value in them is something that’s not on everybody’s lips inside HP, or in the commonplace world of IT management. Owning an HP 3000 is an uncommon thing, compared to owing a Unix system or an NT server. You should consider yourselves lucky that you already own one. It’s not nearly as easy to get one as to scoop up a bargain on Big Trash Day.

Twice a year here in Austin, the city holds the Bulky Items Collection. (We like the ring of Big Trash Day better.) On the first day of the week-long collection, all of Austin rummages through garages, attics and back yards, and drags everything they couldn’t fit in the can all year to the curb. Driving through any neighborhood is like walking the aisles of some homespun museum. Couches. Rug shampooers. Stereo racks. Refrigerators. All for the city to collect and dispose.

Within an hour after sunup, the uncharted commerce aspect of the day begins. Pickup trucks we’ve never seen before crawl along the street, stopping as the driver eyes what’s on the curb. The city takes all week to collect, but the shoppers hunting for bargains pounce. And they find things you cannot buy any longer, and value in things we think of as worthless.

It’s a real lesson in perception to watch Big Trash Day unfold. Since we’re middle-aged and prosperous, we always have something to contribute. By lunchtime our leaky plastic cooler was gone. Before sundown the old Christmas tree stand had been scooped up.

The pickup people, as I think of them, remind me of hardware brokers in the e3000 community. They see value in just about everything, especially those things the original owners are casting off. I get a sense of pleasure in knowing our Big Trash is someone else’s treasure. You might be able to find some of these treasures on eBay, but it’s pretty competitive. On Big Trash Day, the early birds get their worms.

No transaction or item is too small for the Pickup mentality. One of our neighbors practices this thinking for an income. As my wife and partner Abby (Dottie to some of you) takes off for her daily 5K walk (she’s in training for a charity marathon walk in October), she passes our neighbor’s house. He’s always out there in the early cool of the dawn, strapping down the found goods that he’s repaired and selling to the second-hand shops. It supplements his pension check. He’ll often have things like a wicker furniture set roped onto his minivan roof, like some tree sprouting limbs of plenty after his patient repair.

Watching something as simple as furniture get resold makes me wonder why something of such great value as the 3000 gets sold in so few places. And fewer all the time, by the looks of HP’s changes. This is supposed to be a special investment, to be sure. But this tree of commerce feels like it’s getting pruned too closely.

Last year in the name of honesty and fairness, HP cracked down on illegal license transfers of HP 3000 software. Fewer HP 3000s got sold in the broker market by some companies, and that meant fewer got bought. This didn’t hurt HP’s revenue any — in fact, it may have gotten paid for some software that had been “included” illegally. But another result of the crackdown was it became harder to buy a 3000 outside the authorized channel.

In the same year, HP authorized its first used hardware outlet, an alternative to the broker market. Phoenix 3000 is still gathering momentum, but its first year efforts still are priced above the broker community. Buying on the lowest price for used equipment still takes extra effort.

At the same time HP began its license crackdown, it worked to sue some companies out of the 3000 sales business altogether. The two largest sources of used equipment stopped selling HP 3000s, after a full-court legal press by HP attorneys and California police.

HP’s zeal in stemming the illegal competition should not be underestimated. On our front page runs a story that outlines the latest legal battle between HP and a competitor. HP believes the company has received stolen HP property. On the basis of that belief and testimony from California policemen called the High Tech Task Force, HP secured a search warrant of their competitor in Washington. The story of the HP security investigator’s behavior as told in court documents is compelling. Perhaps it was written to read that way. But the full text of the motion describes HP’s private security officer executing a search warrant with disdain and disregard for another company’s employees.

No one should be allowed to steal. But investigating an alleged crime with private security officers, while authorized police stand by to watch, feels wrong, too. Neither the competitor’s theft or the abuse of the search warrant has been proven yet. But the specter of having a larger competitor search your offices and confiscate documents that can support their civil lawsuit strikes me as unfair. Even the accused are supposed to have civil rights in the United States.

I wish that some this zeal of policing HP’s sales policies and ownership might be transferred to expanding its 3000 market. All of the activity appears to be designed to protect the 3000’s value in the marketplace. A marketplace whose outlets and options are being reduced in number at the same time its value is being protected. Some HP 3000 customers cannot buy systems at the best price, we are told. Value delivered in the sale will determine who they may buy from — because otherwise, we have been told, “It becomes a price war.” There’s definitely some serious competition afoot for your purchases. Some of the stories resemble a war.

Now the smallest of resellers report they are being removed from the HP 3000 channel, so some existing customers will need to make purchases from new sources. We don’t know why this is happening yet, but there won’t be much the customers will have to say about it once you read this.

Perhaps it’s naive to think that the simple, unfettered commerce at my curb could be mirrored in the computer marketplace of the 21st century. People need something, and they go find it. Who knows, maybe restarting the e3000 sales channel will require the magic of HP’s e-services to broker deals. During 1997 and 1998 we often heard from CSY about five-year highs for 3000 sales. The comments since then haven’t mentioned highs. We’re waiting to see how fewer, more restricted options to purchase can result in more sales. Owning an HP 3000 seems to be the easiest part of the experience. I hope HP remembers that they need to make it easy to buy one, too.

— Ron Seybold 


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