Manufacturing a Landing
Paul Dorius is leading a company that is building a
future for HPs most classic customers. Salt Lake City-based
eXegeSys took over HPs manufacturing applications in 1998,
assuming several hundred active sites using the MM-II software
running exclusively on HP 3000s. The companys founders hailed
from HPs own ranks, choosing to pursue a business the system
vendor was leaving. It was a situation that has some similarities to
HPs current exit of the 3000 marketplace, where third parties
will offer a future HP cannot justify for the 3000.
Dorius would disagree about those similarities, since
eXegeSys was founded to follow HPs business plan to spin off
its applications trade to third parties such as his 50-person firm.
However, doing something better than HP wants to do it strikes us as
a pretty accurate description of both eXegeSys ERP offering and
whatever third parties will be able to do to extend the 3000s
lifespan. Both seem to be about tapping new possibilities.
The eXegeSys president has been connected to the 3000
community since 1984, first as a salesman selling solutions for HP on
the 3000 until 1989. Then he began to recruit HP 9000 channel
partners for HP as part of HPs shift away from its own
application business. In 1994 he founded eXegeSys with Steve Quinn to
take on the MM-II ERP package of HPs and champion MM-IIs
Customizer technology, software that gives customers a streamlined
way to modify their applications. (The company applied for a patent
on the technology late in 2001, calling the product eXsyst Anywhere.)
At its founding, eXegeSys became the only channel partner authorized
to sell HPs applications on behalf of HP. It added support work
on HPs behalf in 1996, and then took over the MM-II customers
and renewed application development in MPE using new client-server
We wanted to see what an application supplier who we
view as a representative member of HPs 3000 ecosystem was doing
to build a future for its customers this year. Its software has been
promised to be ready for alternative platforms the
companys first end-to-end support of systems without any 3000s
by the middle of next year. Considering Dorius more than
18 years of close contact with HP, and four years of work to sell a
solution that relied on the 3000, we also wanted to see how he views
HPs business choices regarding its end of 3000 support.
Youve built your company by pursuing a business space
that HP chose to leave. What made you decide to do business in a
segment HP didnt want to cover anymore?
Actually, our strategy and efforts are designed to
parallel changes in the marketplace, and take advantage of HPs
altered go-to-market methods. As most people now know, HP
re-crafted its go-to-market strategy in the late 80s and early
90s. Instead of focusing to be a Total Solutions
Provider in a few industries, HP reinvented itself in toward
becoming the open systems hardware leader across all industries.
Their strategy is to engage channel partners to add value and
expertise that addresses the need of clients or vertical industries.
HP also realized that offering its own high-level, industry-specific
solution was inconsistent with this change.
We were deeply familiar
with the MM-II application suite. We appreciated the unique value
proposition offered by the applications and Customizer technology.
Although much has been said about the challenge facing enterprise
applications providers in accommodating individual end-user
requirements, no other ERP vendor offers anything even remotely
comparable to Customizer. We realized that this could be a superior
offering, despite it not fitting in with HPs changed strategy.
We believed we could apply a level of expertise and
focus that HP no longer could, and resolve the dilemma facing
customers. We could become the kind of value-adding solution provider
that is central to HPs strategy while protecting and extending
the value of the MM-II solution for customers. This seemed a
reasonable business proposition.
Would you put your company in the category of migrating its
customers, or helping them to homestead?
Wed probably be classified as a migrator, but
neither term is tremendously accurate for us as a solution provider.
We will have customers who decide to homestead, and customers who
move forward in a migration. We have to be able to respond to both
sides of that equation. However, for our future as an application
provider, staying put is not an option. We are actively moving toward
to re-host our applications to provide a viable solution both for our
existing installed customers and for new clients.
If a customer chooses to homestead, well do our
best to support them within known limits. Certainly for new
customers, we wont be recommending a homestead solution.
Do you see your customers staying with the 3000 beyond
HPs end of support for the system?
Our applications tend to be mission critical. As
such, it would not be appropriate for us to recommend that our
customers maintain a mission-critical environment in a non-supported
structure. It relegates them to third-party support, and knowledge
and fixes to the operating system could be questionable.
If they keep the 3000 in a different vein, along with
ancillary products that arent mission-critical, I could see the
3000 continuing to be used where the customer can accept a heightened
level of risk.
How about that third-party support for 3000 hardware: for or
For. Third-party support would have the effect of
lengthening the e3000s end of life timetable, and that could be
helpful for some users.
But youre bound to have customers who will opt out of
having HP support their systems over the next five years, right?
The decision is the customers. Some can
tolerate a higher level of risk than others. Our support terms
specify a supported environment because of the interactions between
our applications and the OS and database. Without O/S and database
support, we could be in jeopardy of not being able to provide quality
application support. If a customer engages someone who can provide
good ongoing support for the 3000, we will do our best to provide
application support within that context.
Do you want your customers to sign a different contract if
they use a third party for hardware support?
No. Our contract terms require a supported system and
current operating system with support from the provider. A
customers decision not to comply relegates our support to a
best-effort level. That said, well review this
situation periodically to ensure we are doing the right thing.
By 2006, will you want all your customers to be on a hardware
platform supported by HP?
Our professional recommendation is for them to be on
a platform supported by the manufacturer.
Would you pay HP to reverse their decision about their future
with the HP 3000?
No. Would we be supportive of a different timeline,
and would we participate in such a thing? Perhaps. Based on HPs
announcements, weve taken a course of action to protect our
As far as the timing of the 3000s end of life,
we are supportive of third-party support, or other initiatives that
would extend the supported life of MPE and IMAGE. But as HPs
decision is being implemented, were addressing reality as it
Do you want HP to provide the OpenMPE movement with whatever
is needed to develop and license a 3000 hardware emulator?
Not as presented. Were certainly not opposed to
the OpenMPE initiative, as that could provide a safe harbor, the part
of our strategy that means well protect as best we can the
existing implementation and environment. The OpenMPE folks could
extend the viability of the safe harbor approach. However, its
hard to get behind any initiative that isnt directed at
continued innovation and advancement.
The way the hardware emulator was presented [at the
Solutions Symposium meeting] by the OpenMPE people and [Gavin Scott
of] Allegro, it appeared to be an emulation and support structure
in perpetuity of what we currently see on the 3000.
Even though the hardware emulator would sit on newer hardware, and
could interface with disk arrays and newer technologies, the actual
perspective of that emulator is to simply maintain the 3000 as we
know it today. For instance, it would block down
advancing disk technologies to whatever limits exist on the 3000
I see all of that as more of a holding position. When
the OpenMPE people talked about their initiative, they were very
careful to say they didnt look toward opening up the operating
system and making significant changes, enhancements and additions to
it. Its a support as-is for as long as people want that kind of
support structure. So, we see the OpenMPE + hardware
emulator effort as merely a holding action and not a strategy
for the future.
What would make it a better proposition for your support as
an application provider?
Well I think if somebody of substance was willing to
invest in MPE, whose strategy is to take MPE and make it a viable,
acceptable and ongoing operating system, competing with Unix, Linux,
OS/400 and Microsoft somebody who wanted to be in the
operating system business and enhance MPE that would certainly
be an open strategy we would embrace. That wouldnt mean we
wouldnt pursue our current strategy simultaneously anyway. Our
strategy to host our applications in multiple environments was
underway before HPs announcement on the 3000. The announcement
simply focused and accelerated our implementation.
Would you like to see HP do that, since youre an HP
Yes, but I also think that the somebody
has the primary responsibility to take the initiative to put
together the needed capital, level of expertise, and demonstrable
ability in the marketplace to advocate MPE as an operating system,
and its ecosystem.
How does your customer base line up with the HP estimates of
those planning or implementing a migration? HP says 75 percent of the
customers are doing this.
Its not even close. It depends on the way you
ask questions and how you interpret questions. If they did a customer
list from the mid-90s, youd find a lot of people who have
already completed migrations, facing the uncertainty of the operating
system and lack of statements from HP about that platform. It
certainly would give you a different picture than if you included
people who just purchased a new N-Class or A-Class type system.
Our customers are telling us they are planning on
migrating, but the timeframes are very indistinct, ranging from
investigating, to beginning the planning in a couple months. Some
people say they dont expect to be off the 3000 by the end of
life announced by HP.
I wasnt surprised by Winston Prathers
comments, saying that since they made their announcement in November
everybodys looking at migration. Once you make that kind of
announcement, people who are professional will start looking at their
options. They have no choice but to do that. But its being done
professionally, and were not seeing a simple mad rush to the
Since theyre hanging on for now, how do you view what
HP calls their ecosystem this year?
Languishing, frustrated, irritated. HPs R&D
decisions for the e3000 maintained the e3000 ecosystem as
one that was separate and distinct from the rest of the world. An
alternative tack would have been to really open up MPE make it an
equal player in the open systems world by finishing Posix, by
finishing the Unix shell in a way to be certified as a Unix provider.
Then they could have embraced the worldwide open system ecosystem.
They wouldnt see it dwindling.
Instead, HP only did some moderate enhancements to
the environment and a few hardware upgrades. And their philosophy
remained invested in keeping the 3000 as a unique,
proprietary environment that wasnt going to move
into open systems in a realistic way.
I dont think HP-CSY really wanted the challenge
of trying to compete for market share in the open-systems ecosystem,
or of portraying the 3000 as a viable platform. This way, the path
they chose was perhaps just easier.
The e3000 ecosystem is filled with talented, bright
people who could envision the alternative, who fought to make that
alternative real, and who know that this was not the only
alternative. Now, they face the end of the product line in which they
have invested their careers. Had HP chosen the alternative tack,
things might have been radically different.
How does shifting a client technology prepare the 3000
customer for the future?
Both of our migration solutions
Bridgework to Open Systems and eXsyst Anywhere
will take advantage of our eXegete Client technologies to provide the
user interface. By implementing eXegete Client now, our customer
will have resolved one of the migration issues displacing
V-Plus. The customer will also immediately benefit by advancing and
improving its current implementation. Then in the future, migration
efforts will deal mostly with the back end, with little or no effort
to migrate the user interface.
So, this is something that will have to be addressed
eventually, and they can start on it today with real rewards in the
Do you think being nudged out into the bigger world of Unix,
Linux and NT will be healthy for a supplier of your size?
I think so. Im excited by that opportunity. In
competitive situations weve gained feedback the customers were
very impressed by the functionality, technology and underlying
architectural concepts of our applications, versus the opponents.
Our biggest handicap in attracting new clients has
been the platform of choice. While we have been able to successfully
convince a few, thats been our biggest detriment.
Have you been able to sell your solution on another system
We do not have our overall suite offered in any way
other than on an HP 3000. Were working towards that, and since
the first of the year telling our customers it would take us 18
months to offer applications on other platforms. Were working
with Denkart. Our project will host our applications on HP-UX,
Windows NT and Linux. The databases are Oracle, DB2 and SQL Server.
Does manufacturing continue to offer prospects for new
customers for your company? Is it still a lucrative market segment
for smaller software and solutions providers?
We believe that there will always be room for true
innovation and differentiation. We also believe that the industry
watchers who say that the competition for serving the
enterprise is over are the same ones who announced 10 years ago
that the manufacturing industry was fully saturated and there was no
further opportunity; that said 20 years ago that the PC was
cute; and that said 30 years ago that available mainframe
technologies exceeded the maximum processing capacity requirements of
the world. We believe they are wrong again.
We are finding that far from being satisfied, many
manufacturing enterprises are under whelmed by their ERP
implementations. Many lament the costs, the rigidity, the narrow
functionality, and the difficulty of implementation with some of the
more noted first- and second-tier solutions. We believe that when
someone like Larry Ellison tells his customers that they need to
adhere to Oracles methods because that is just what they have
to do, there must be a better way. And we believe we offer exactly
that a better way.
Yes, we think there is opportunity.