Pat Maley has a habit of making change take off. The
CEO of Denver-based Client Systems has led his company to a hub
position on the HP 3000 distribution route. The company developed and
promoted its new 3kworld.com Web site as a meeting place for HP 3000
colleagues around the world, adding chat and messaging services and
consolidating information about the system. Its typical of the
vast changes Client Systems has made in its dedication to the HP 3000
over the past 18 months, starting with its 1998 decision to focus
solely on the HP 3000.
That year the company dropped its authorizations to
distribute HP Netservers and HP 9000 systems to its 50-plus
authorized HP resellers, and began to curtail reseller operations in
the Oracle market. In place of that, the company which was once the
only distributor of 3000s to North American resellers began aiming at
an exclusive status once more. It created its Web-based forum at the
same time it launched Phoenix 3000, the first HP-authorized channel
for used HP 3000s. The company attained its goal in August, when HP
finished its Channel 2000 project for the HP 3000 and named Client
Systems as the sole distribution source of HP 3000s sold through the
North American authorized channel.
Maley has been in the cockpit for this quick climb to top
3000 distributor partner. A former P3 Navy pilot who trained
aviators, Maley landed in the HP 3000 community five years ago after
more than 15 years of sales and general management sorties at Sequent
and Intel. At Sequent he sometimes tried to sell against HPs
3000 offerings, with infrequent success. His Intel experience let him
sell to HP at a time when Intel and HP were in competition. Maley
then consulted in the Chasm Group with computer marketing guru and
author of Inside the Tornado Geoffrey Moore. Following
his term in the consulting business, Maley joined Client Systems in
1994, the year HP authorized a second 3000 distributor for North
America. Maley invited Moore onto the Client Systems board in 1996,
and three years later the company earned back its sole distributor
status. With 3kworld.com online, Phoenix changing the used 3000
market with an authorized used channel, and Client Systems now the
source for three out of every four new HP 3000s sold in North
America, Maley and company qualify as one of the brighter stars
shooting through the HP 3000s summer sky. We asked him just
before HP World what qualifies his company for so much of HPs
3000 attention, and how he thought his flight plans might help pilot
the system at the center of his business.
What were your business justifications for embracing
what some think of as a legacy platform?
the time, about half of our revenue was from the HP 3000 and about
half was from Oracle. [The 3000 General Manager] Harry Sterling said,
Pat, youve got to get off the fence and decide which
place youre going to invest in. We looked at it over a
two-month period and brought Geoff Moore in to consult with us about
what we should do. We all came to the conclusion that the right thing
to do was to invest in the 3000.
Our justifications were fairly simple. To be a successful
business, you want to be a big fish in a small pond. We were a very
small fish in a very large lake, and there wasnt going to be
very much we could do to affect that. We just changed the playing
field to a pond we could be a major player in. If we invested in this
 business, it would distinguish us from the others who
werent doing that. We went away from the normal distributor
model: I invest in my business, and I dont invest in your
[vendor] business. We took the view that by investing we could really
extend the product life cycle of the HP 3000.
One of your directors is Geoffrey Moore. What does his
Main Street strategy have to do with the HP 3000? Have you seen him
modify his thinking since hes been more closely involved with
an all-3000 business?
Main Street, youre trying to minimize your investment in your
existing systems that work and run your business well. You want to
add new pieces of technology to that investment, incrementally, that
help you be more efficient and cost effective.
is now making the investments to add the technology to MPE. On Main
Street, if the cost to change is large compared to the cost to
maintain, people will mostly maintain. [Geoff] has gotten a deeper
understanding of this part of the market. The reason is that the
Internet changed everything. Until the Internet, in high-tech we
developed a product and ran it through the tornado and when it
got on Main Street, companies killed their own products when the
volumes slowed down.
When youre connected to the Internet it doesnt
matter what technology youre using. Nobody cares. And we all
realized with the Internet we had a tremendous ability to use the
data wed accumulated over the years.
HP likes to say its 3000 customers dont care if
the platform itself gets visibility these days. Whats the
relative worth of people knowing a successful solution is powered by
an HP 3000? Will you market the platform in advertising
Thats part of what were going to be able to do
with our new [sole distributor] arrangement. Of all the companies
still very involved in the 3000, including HP, a major advertising
campaign requires more money than any one entity has alone. If you
had a community doing the advertising, you could get a lot more done.
This is one of the premises behind 3kworld.com.
Its important the 3000 be identifiable in the
selling process, so its not a big question mark. I also think
youre going to see the definition of open change. I
did this for 10 years at Sequent, saying Unix is open. Well, we all
know that Solaris is different than AIX, which is different from
HP-UX. And then theres NT, which people say is open, but you
can only buy from one company. In my definition today, open is that
What good will come from being named the only 3000
distributor for all of North Americas HP 3000s sold through
This is no longer a distributor-manufacturer relationship.
This is a true partnership. HP is fully committed to us, and
were fully committed. Its like that story of an
egg-and-bacon breakfast: the chicken is involved, but the pig is
Being in partnership with a large company leads to a
lot of following from the smaller company. Can you really have
disagreements and push back at HPs policies about the
Absolutely. I believe we will have differences of opinion
and well work it out, because weve already done it. Part
of the reason were here today is because HP knows they can do
that with us.
Some of the companies weve just begun to do business
with were concerned that we didnt have any competition anymore.
We have major competition. Our competition is migration, like when a
major application ISV says theyre not going to support the 3000
anymore. When an end-user says theyre going to migrate away
from the 3000, thats competition. Everything that were
doing to build value into what we do has to be aimed at that
How are things going to get better with only one
distributor to serve North America?
The supply chain side between us and HP is going to get
much stronger, with things oriented toward increased throughput and
lowered costs for better service to customers. In the past, it was
difficult for us to get the full leverage of what we were doing for
HP on the marketing side. HP was faced with two different business
models for distributors. We funded some significant infrastructure
here to be ready if we won the Channel 2000 bid, infrastructure that
at the time our old business model didnt justify. We increased
staff and investment in Phoenix and 3kworld.com. We have a lot more
people in the demand generation end of the business.
believe you have to invest and innovate, and that comes from the fact
that were focused on this business. If we had other places
where revenue would come from, youd tend to minimize
investments to balance your return. We dont do that now.
Companies willing to invest in this market will participate a lot
more than those just looking for opportunity sales.
What have you noticed about companies heavily invested
in 3000s versus those doing it as opportunity business with other
The ones who are much more invested in the 3000 are much
better at doing their business. They have happier customers, and they
know what theyre doing it doesnt all fall back on
us. The model well see in some of the larger resellers is ones
who will invest and dedicate individuals to the 3000. This is a lot
different than every salesperson can sell the 3000.
Do you expect that Phoenix 3000 can give your resellers
price-competitive used offerings against brokers who dont
invest in the HP authorization infrastructure? Isnt the Phoenix
initiative as much a program for these 3000 resellers as it is for
the customer base?
Yes we expect we will be able to offer competitive
pricing with Phoenix 3000 systems. It is a challenge, of course, to
go through the authorized channel, as opposed to brokers who go from
end user to end user and even trans-ship systems. We can compete,
however, on price, quality, and availability.
Before this, the resellers just couldnt service
their customers with used 3000s. It will be a lot easier buying
process for the customer. Phoenix 3000 is for end users, resellers
and HP. Given the durability and capability of all versions of the HP
3000, Phoenix 3000 provides a quality alternative in
price/performance to the new HP 3000 product line. It is not about
competing with brokers as much as providing a complete suite of
options for the end user customers through HP and its partners.
How do you think the 3000 market will handle coming out
of the tunnel of safety the Year 2000 has provided?
Its not going to be all that much different than it
is today. If your business has major changes in it, youll look
at other systems. If not, theres not a reason to change. And
once youve gotten Y2K compliance, youve made major
investments, and you want to get a return on that.
will see a fair amount of increase in supply in the previously-owned
 market, because of the availability of test systems that are
no longer needed.
What will an online community Web site like 3kworld.com
do for customers and solution suppliers that they havent got on
the Web now?
becomes one spot to get all of the information you want, as opposed
to sorting through the Web. Were making major investments to
make sure the major search engines have direct connects to
The other piece is the interactive. Well see this
very intense interaction for a week at HP World, but then it goes
away. There are a large majority of the users who dont
participate in this, and I think 3kworld is going to give them a way
to jump in and do it. It will be easier to use, plus have multiple
areas for applications as well as those focusing on MPE.
The Internet is moving the power from the providers to the
consumers. 3kworld.com is a place to give feedback to those
Its interesting that youd say this Web site
is going to shift the power away from providers, since nearly all of
the initial founders are providers. Why do they want to support
People are going to get a lot more information to make
decisions than we typically get today. 3kworld is going to allow
anybody who needs input to make a decision to get more than the
squeaky wheels input.
What is it about the HP 3000 market that makes it a
good match for a visible community point like 3kworld.com?
This market is a community of people who care about the
3000 and are loyal to it. They like to communicate, and they have a
lot to communicate, and theyve been very successful with the
In what ways do you believe youll be able to go
beyond the simple sourcing duties that most distributors
are the opposite side of the total solution. When a
product gets into Main Street, the users dont want to spend an
inordinate amount of time communicating to the manufacturer. The
manufacturer is far enough away from the end users that unless they
make an inordinate effort to communicate, its difficult. The
role that we play is the link with the resellers and the end users to
HP. Our focus on that makes us credible on both ends.
You worked in HPs Unix market before focusing on
the 3000. HP is drawing more of its Unix business into its direct
channel, and pushing most 3000 business out to resellers. Why do you
think HP has different goals for its channel in these two
Its because of their [relative] size. The good news
about this is that were making major investments in the 3000,
investments that are off HPs balance sheet. Thats very
different from the distribution model in the Unix market. HP is
investing in the MPE operating system, and adding to the product
the right place for their investment. That means theres
no need for HP to make additional investment in some of the things
that weve done. Phoenix is a great example of that, an
investment we were able to make happen in months. Just over a year
ago, 3kworld was a conversation I had with Geoff [Moore] that went
Pat, what are you doing with the Internet to help this
business? We needed to distinguish ourselves with these things.
Weve gone from being HPs smallest [all server products]
distributor to being the largest company in the world focused on the