Number 73 (Update of Volume 9, Issue 5)

Looking for truth about used 3000 prices

A series of e-mail messages from a legal firm are the latest probe in an investigation of prices for the used 3000s HP sold during the 1990s. The legal firm has until March 31 to find out HP's 1996-1998 prices for used 3000s, and it wants the help of the 3000 customer community.

The end of the month means the end of the discovery phase for an HP lawsuit that is scheduled for a June trial. The court case where HP is trying to collect more than $30 million in MPE software license fees for the 191 HP 3000s that were resold by Hardware House.

HP filed the lawsuit in 2002 against its insurer, after the company bounced an HP claim for the millions in lost revenue. HP took out a Comprehensive Crime insurance policy in 1995 to protect HP against criminal actions of HP employees. Two HP employees, Deborah Balon and Marc Loriau, improperly sold HP 3000s to Hardware House. Both were convicted in 2000 and received four-month prison sentences and $3,000 fines in exchange for cooperating with US attorneys.

Now HP is after the millions in MPE license fees that its two employees didn't collect from Hardware House, and HP's trying to get that money from its insurance company. The legal firm looking for HP used system prices is defending the insurance company, and it has been working for months to get proof of HP's pricing for the used systems the company sold during 1995-1998 out of its Factory Remarketed Division (FRD). HP, according to the lead attorney defending against the HP suit, has stonewalled discovery of the prices. The insurance company refused to pay on the claim because HP said every one of the 191 used 3000s that Balon and Loriau sold to Hardware House should have been worth full list price, according to HP's figures. The legal firm is looking for price lists that HP's FRD used during the period: flyers, fax ads, anything that shows what a used system was sold for.

The lead attorney from the firm said that HP at first claimed that it could find no documents on its discounted FRD prices. A used HP 3000 that HP claimed was worth $120,000, she said, was selling for between $38,000 and $44,000 at three hardware brokers, according to discovery. HP's lawyers at first tried to assert that any sale of a 3000 outside of official channels to these brokers was a black market sale.

HP's lawsuit complaint from 2002 states that "HP's calculated damages as a result of the dishonest conduct of Balon and Loriau is no less than $30 million, exceeding the $10 million deductible applicable to the Insurance Policy." HP's complaint says it "provided [the insurer] with extensive documentation relating to its claim."

Paralegal Laurie Moss, who's combed the community for months searching for truthful pricing, said that "We know nobody paid full list price for these systems. That would be like somebody buying a used car today, and paying the same as when the car was new in 1989. There's stuff out there that HP's been stonewalling us on." Moss said that many in the 3000 community have wanted to help in the discovery process that would reduce the HP claim on old MPE license fees. An HP 3000 customer in the confectionery business has been deposed in the case, to deliver testimony on prices of used systems. Balon was also on the list of those to be deposed. Customers who have old documents on FRD's 1996-98 price offers, or any information on HP's used 3000 systems prices for the period, can e-mail Moss at lam@amclaw.com, or call her at 213.236.1686.

SIB ballot shows hottest interest in big items

Results from more than 200 voters in the latest Systems Improvement Ballot show the most serious requests earned the greatest attention from customers. Results from the SIB first surfaced on the OpenMPE Web site, just a few days after the online polling closed. The ballot was open to anyone, and voters said their most important strategic request was getting an HP decision by the second half of this year about releasing the MPE source code to a third party. Voters were more pragmatic about the Nos. 2 and 3 items, asking HP to put all internal HP 3000 documentation on the Internet and to remove CPU throttling code from all HP 3000s.

The top item in the Tactical segment of the SIB balloting wasn't the hardest. Voters asked for Network printing to work with non-HP printers, by adding a pcl_supported = false option in NPCONFIG.PUB.SYS. Running second was a request for HP to support gigabit LANs on the platform. A very close third was a request to fix the HP 3000's FTP server to operate like its HP Unix counterpart. HP has said that it has engineering resources available to do some technical improvements on the system before 2006, when the company leaves the HP 3000 marketplace.

Voters were homesteading on the platform 99-73 versus migrating, and 39 voters said they had not decided yet. OpenMPE's summary of the results is online at openmpe.org/SIB2004.htm.

OpenMPE might be even quieter about HP talks

A candidate for the OpenMPE board of directors has asked the organization not to sign any nondisclosure agreements with HP until after the board elections, scheduled for this month. John Burke said that his reading of the OpenMPE minutes from the group's Feb. 26 meeting indicates the current board "is in the process of negotiating a formal [nondisclosure agreement] with HP to replace the informal, non-binding NDA."

Four of the group's nine seats are up for election this month, and there are rumors that a fifth board member will resign his post after the elections. Burke's message to members on the OpenMPE mailing list asked the board to "lay aside any negotiations until a new board is formed. Openness should be an issue discussed by the candidates, not stifled by the current board." Burke believes that the move to "make the Board's negotiations with HP even more secretive than in the past" resulted from board member Ken Sletten's leak of an HP e-mail to the board in December. See the NewsWire's January issue for details on Sletten's open letter, and HP's reply.

OpenMPE's Web site had no notice of the election process as of mid-March. The NewsWire's request for election details was returned on March 9 from board member and Webmaster Ron Horner with the reply "All will be revealed."

New DDS drives work with HP 3000s

Even though HP hasn't done any testing on the devices, the newest DDS-5 generation of DAT tape drives will work with HP 3000 servers, according to an HP 3000 networking expert. Christian Lhereuex has posted a chart on the OpenMPE Web site that shows the DDS-5 units, which use 36Gb tapes in their largest format, read and write to HP 3000 systems. Some smaller-capacity DDS-5 tapes don't work with the 3000, according to the Web page. HP has only certified systems up to DDS-4 for use with the 3000; details on the DDS-5 units first surfaced in the year after HP announced it was ending production of the 3000. For details on the 3000's DDS compatibility, browse to www.openmpe.org/DDS_Comp_Matrix_2003_04.htm

Itanium 2 server helps with migration test drives

HP has put an Itanium 2-based server online as a public resource to help companies who are migrating to Itanium test software. Mark Bixby of HP, who manages these Public Access Development servers for MPE and HP-UX users, announced that "the new inventi2 HP-UX IPF vCSY public access development system is now available for customer use. This system is an HP Integrity rx2600 server running HP-UX 11i v2 (aka 11.23).

"If you'd like to get a taste of HP-UX on Itanium2 to help with your MPE migration planning, come and give inventi2 a spin. Simply register at the same place where you can register for the other vCSY public access systems: jazz.external.hp.com/pads"

"ISVs are welcome to install their own demo software on this system. Just fill out the registration form at the above URL to get the process started."