April, 1999

Martino came to CSY from HP’s Test and Measurement Organization. She has 20 years of industry experience. Until her move to HP’s Video Communications Division (VID) four years ago, the bulk of her career was in networking. Most recently she held a variety of marketing management roles at VID, including MARCOM, outbound marketing manager and technical marketing manager.

After seeing prospects wane for new 3000 software partners in 1999, we asked her where solutions for 3000 customers will come from, and how she’ll be balancing the needs of two very different customers: the vertical-centric new sites and the general-purpose installed base.

Among your staff is a person in charge of ISV alliances. Why is that person not recruiting new ISVs?

To be honest, I don’t think it’s realistic that we’ll find a number of new ISVs that want to port to the 3000 platform. I think the AS/400 has similar issues. These people are thinking NT and HP-UX. I think it’s not a big issue that we need to port a lot of ISVs, because we have tons out there already. They have been there for a long time, and until recently we were basically ignoring them. I think we’re going to find the key solutions for our new focused verticals with the existing ISVs.

Do you think that this freezes the range of solutions available for 3000 customers?

It’s the same base of applications from the same companies, but a lot of people are Web-ifying their applications and adding bells and whistles. We’re really working with them to do that. That offers new things to customers. It’s unrealistic [to think] we can go to all these software houses that never heard of a 3000 and have them port their applications. I don’t think we’re going to get their mindshare. I can see a day where that will happen, but we’re not there yet. We first need to prove we can grow our marketplace through selling focused vertical solutions. We’ve decided to work with existing ISVs, because they’re there in large numbers.

How do you market the HP 3000 as an e-commerce solution when it’s so dependent on other platforms?

I don’t think it’s very unusual to have a different front end, particularly an NT front end. There’s functionality you can get in NT that’s attractive for a Web front end. We’ve announced Apache’s Web server, but I think most people will use an NT front end. What it’s going to take to manage inventory, process transactions, how I’ll bill the people doing e-commerce with me — that’s the part we have down.

So you’re not focusing on an end-to-end, all-3000 e-commerce solution?

I’m not reluctant to offer the full value chain. I think we have the pieces there to do that, but I think people are going to set it up with an NT front end. We bring the back end, a much harder part.

Your installed base customers and partners seem to want platform-based marketing efforts. This approach appears to run second to marketing by solution. How do you balance these marketing needs?

Most of our advertising dollars last year went to the worldwide “blanket” ad that was on the 3000, not solutions. We continued with the HP Advisor, supporting publications like yourself which target the installed base. I actually think we’ve still been spending too much money there, and not enough [on solution ads] so far. I’m looking at having significant dollars in ads for the 3000 — we’re working on a new worldwide ad right now — while also doing solution-type advertising and mailers with our solution partners.

Since we believe most of our new customers are going to come through the focused verticals, we have to jointly market a solution with our key application partners. Putting an HP 3000 [platform] ad in medical publications isn’t really going to reach anybody.

I think I have a real balance now in doing both. We have a little delay in getting our worldwide [3000] ad out, but that’s another story. We are now tapping into HP’s services campaign. We’ll be the second product to come out in the new HP campaign — and Unix is not the first.

Which verticals are the best candidates for a new HP 3000 marketing focus? Is it reasonable to expect there are markets out there virtually overlooked by Unix and NT solutions?

I think there are markets that aren’t completely saturated [by those platforms], but I don’t have any identified yet. We’ve been working with a consulting firm, and they’re halfway through their project to look at the applications that still exist on the 3000. They’re looking at which of those marketplaces have a good potential for growth. This is all going to be tied to a solution sale, and what kind of application partner we have.

The work the consultants have done shows we’re already in three of the right focused verticals: mail order and Internet retail, healthcare payors and credit unions with Summit. I don’t know that we’re going to find others that are equally attractive, but the next level of attractiveness…

Why not sell the HP 3000 to companies that need a more reliable system for small business than Unix or NT platforms provide?

It sounds like you’re asking why we’re not selling the HP 3000s as a multipurpose computer regardless of application. Our installed base bought the 3000 [to do this] in a really different time, before we had Unix or NT. I really believe bringing new customers onto the platform is going to come from solution sales. No matter how you look at it, we’re going to get the NT bigots and the Unix bigots out there. I don’t think we’re going to be able sell the HP 3000 as a multipurpose computer right now. We’re going to be able to sell it as the workhorse for a specific solution.

So should the installed base face the reality that the days of the general-purpose new HP 3000 sale are over?

Yes, except I don’t understand what the bad news is about the installed base over this. They’re still being well taken care of. We’re still committed to 30 percent or more performance growth every year. We have a very fleshed-out roadmap. The majority of the work we’re doing in R&D is really for the installed base customers who are pushing the limits of the system.

Since you’re dedicated to working with existing ISV partners, do you have specific help you’re ready to get to them to help market their products?

Over the last five months we’ve beefed up our relationship to the SPP program. We’re offering more systems to develop on, a technical support line with MPE/iX expertise. The SPP program also helps ISVs with marketing efforts. We’re doing as much as we can, especially to reach the mass of ISVs. In our top three focused verticals we’re doing a lot more: resources in R&D, marketing, in the field. There are different levels of support that are appropriate based on the market size and potential of the ISVs. If you’re a tiny ISV we haven’t worked with for awhile, you can begin to get information about CSY through SPP.

After three months in the 3000 market, how does the CSY challenge differ from your experience building market share for VID in TMO? How will your marketing build the 3000 share against better-known platform alternatives?

We weren’t dealing with the rich history of an installed base [in VID]. Some of the topics we’re talking about, like trading off marketing focus and installed base and new business, are different. It’s different in a mature marketplace. In my old division we were inventing the rules as we ran along. Here there’s a lot of history — some of which is good, and some of which we need to crack through to continue to grow the platform.

There are different awareness challenges. In VID we had to get people to understand why they would care about buying a video server. Here we have the challenge of getting over our own negative awareness, if you will, of a few years ago when people really were moving off the platform. Now we have this resurgence, and we have to correct our own messages from a few years ago. Many people here think they’ve showed the roadmap until they’re blue in the face. Everywhere I go there are people who haven’t heard that message.

The installed base asks for things a solution-centric customer doesn’t even know they need. How do you market these things to customers who don’t even know what they are?

A 30 percent performance growth per year is something most focused verticals don’t need. For the most part, that’s for our big installed-base customers. I think we’re in a good position with the needs of the installed base versus the needs of the verticals. I have a platform for the focused verticals that all I need to do is go market. I don’t need to do a lot of shifting of resources. I have R&D resources dedicated to what my installed base needs, so I can have a perfect box that I can go market to the focused verticals to gain new customers. The only shift we’ve done is to take some of our consulting resources in the lab and get them to focus on the verticals — like work with Smith-Gardner to help them get into the Web realm.

Do you think the customers that are buying the 3000 as a focused vertical solution are actually retaining a brand awareness of the 3000? Or are they just buying Summit or SGA solutions, and aren’t even aware of the 3000?

It’s somewhere between those two extremes, but it’s closer to the latter. They are buying a solution that works. The system becomes of secondary importance. It’s a different sales model than when we were selling a multi-purpose computer. It is a solution sale.

Do you expect the HP 3000 installed base to grow, in real installations, outside of solutions such as SGA and Amisys?

I consider everything our installed base, so it grows when I sell SGA and Amisys. We will have growth from our legacy customers as they do consolidations or add datacenters. I think new customers are really going to come from focused verticals. There’s going to be an overall increase in our installed base.

Worldwide Marketing Manager

HP Commercial Systems Division