||Bill Russell is the patriarch of a clan of successful
enterprise solutions, the most senior of which is the HP 3000. The Vice
President of HPs Enterprise Systems Group oversees general manager
Harry Sterlings direction of the HP 3000 Commercial Systems Division.
That makes Russell the only manager between Sterling and CEO Lew Platt, one
of a handful of No. 2s in the company reporting to Platt in the wake of
Rick Belluzzos departure early this year. Russells Group also
includes the HP 9000 business, Internet software solutions, HP storage
products and some NT-based enterprise NetServer operations. And although he
might not describe it this way, it makes him the fellow who measures the
success of the 3000 within HPs enterprise computing strategy.
Russell began his HP career in
1980 selling HP 3000s, a native-born Scotsman with manufacturing software
as a specialty. Rising through the HP sales organization as general
manager of the Computer Systems Organization in the UK and then CSO GM for
all of Europe, Africa and the Middle East Russells post prior
to heading up ESG was as general manager of HPs Technical Computing
Business Unit. As the 3000s profile continues to rise within HP and
across the industry, we asked him about the 3000s enterprise status
in light of its return to favor at HP. Judging from Russells outlook
on the systems future, being in the Enterprise Systems Group is much
more than just a business address for the 3000.
Does ESG consider the HP 3000 to
be a primary platform for a company's enterprise solutions, or more of a
specialized transaction server?
In certain applications, it is
becoming the primary enterprise server. Weve seen quite a change in
the life of the 3000 recently. Its had its 25 year anniversary, and
it used to be the mainstay of our minicomputer business awhile ago. As we
moved more into the Unix segment, the HP 3000 business was declining, very
slowly. As an overall percentage of our systems business in the enterprise,
However, what we have seen
and Id give a lot of the credit for this to Harry Sterling
is that his division is our best in class in example of being close
to your customers. They are really connected through the user group, and
Harry personally knows a lot of the customers. Harry really listens to what
our customers want, and weve worked very closely with the reseller
channel and the ISVs. And we have some specific software vendors now who
are going for new business on the back of the HP 3000.
We were not winning much new
business two to three years ago. The HP 3000 was in its decline. We really
werent using that as the vanguard for new business.
Across the board, its not
the leading platform we thrust. In five certain segments that weve
really got our business behind, generating new business, we are seeing some
big-name companies, enterprise customers, choosing systems on the back of
the HP 3000. I put that down to a lot of the strategy of the division,
clearly linked to what the customers want. That success and turnaround in
going for new business has driven the decision to move it to IA-64. We were
waiting to see if that would make business sense.
If a customer doing business in
a market segment other than one of the five 3000 targets wanted to base
their enterprise on the 3000, how would HP feel about that?
Delighted. We have a huge loyal
customer base, and these span more than the five areas. Those are areas
where were leading with the 3000 for new business. Of course, there
are many customers who are very loyal and have a large base of 3000s not in
those segments. The news with IA-64 gives them a big future moving forward.
Were not trying to move anybody away from the HP 3000.
That hasnt always been the
case, but at least now youre moving in the right direction.
Id push back on that. I
dont think weve ever been encouraging customers to move. In
fact, how many products in the industry have gone on for 25 years?
Thats not a strategy of us forcing customers to move. Weve made
it easy for customers to stay with the HP 3000. Theyve put new
applications more recently on the Unix platform, and a lot of that is
driven by the software vendors, too. The connection here is that weve
really made it work with some of the software vendors, to get them to make
an investment in going for new business.
So lets look at HPs
own 3000 investments. Some computing components are missing on the HP 3000
but offered on HP 9000s, like Domain FoundationTools and FoundationWare.
Under what circumstances is ESG willing to invest in developing this kind
of missing component for MPE/iX and therefore duplicate its efforts?
Alternatively, why would ESG want to offer customers technology on 9000s
like Internet business solutions but not on HP 3000s?
We make one server today in the
RISC environment. There is no separate HP 3000 platform. We offer a line of
PA-RISC servers. The difference between an HP 3000 and an HP 9000 is the
operating system that runs on the platform. The success that we have in the
Unix business fuels the strength of the platform, which is in turn a
benefit for the HP 3000 customer.
We do look at it as a business.
Harry [Sterling] makes those investment calls, based on what the customer
priorities are. There is a revenue stream that comes out of the market, and
that stream looks more encouraging than it did a year ago because of some
of the new business opportunities that were winning. We see a good
environment for making increased investment decisions. The decision to port
to IA-64 was a direct result of that. A lot of what hinged that decision
was not just a longer path for existing customers, but seeing the success
of these thrusts into new markets. Thats driven the investment
decision for MPE.
It isnt that we rebuild
something completely different. Theres porting that goes on to move
it onto the HP 3000. Harry makes the calls based on the understanding of
the customer needs. We wont take every thing and put it on the 3000,
but we prioritize based on customer needs.
So its his decision to
make about investments in products like FoundationWare?
Its his call.
So that capability is making a
difference in how the 3000 division performs?
Yes. Also, were getting a lot
of leverage for Harrys investments. Because we only have one server
platform, he doesnt have to carry the full investment of a separate
hardware platform. The revenue is all in software and porting some of these
features. If we had two separate hardware platforms, it would be difficult
for Harry just to maintain the hardware, never mind all the incremental
So the bottom line is that if
customers want FoundationWare or Domain Foundation tools on the HP 3000,
they need to get the message to CSY?
You need to demand it,
collectively. As a company, HP has a good track record of listening to what
those customers want or we wouldnt still have a vibrant
product 25 years on, would we?
Was putting the 3000 into ESG
just a way of grouping the business, or is it a true repositioning as an
enterprise server? Do you think of the 3000 as a dominant platform within
your Group, or as an auxiliary system within HPs business solutions?
Of course its an
enterprise-level solution. If we were only putting the business into
maintenance mode, then it may well be in another part of HP. My job is
business growth. Its absolutely there to go after new business in the
segments and continue to do good business with the customers. People run
their businesses on it.
Youre looking for more of
a statement about the 3000 as an enterprise server. The HP 3000 was always
part of the Computer Systems Organization. Certain things moved out of that
organization, and what were left were the core server platforms and
storage. The reason the HP 3000 sits absolutely alongside the Unix platform
is the reason I gave you: We make one hardware platform. Its
absolutely the right place to leverage on the back of all the investments
from the High Performance Systems [HP-UX] Division and the Internet
Applications Systems Division.
Theres one server line
behind all of this. We acquired Convex about two years ago, and thats
not a separate company. The reason the HP 3000 division makes sense is we
leverage from each other.
What's the incentive that HP
will offer ISVs to stay with the 3000 platform, or develop on it for the
first time? Direct financial payments didn't work, so what will you try
Ninety-eight percent of the answer
to that question is customer demand. What will motivate an ISV to make a
port is the ability to sell it to customers who want it. Weve got a
lot of momentum behind these five market segments, but as youll hear
from Harry and the team, theyve got a good campaign in place to do
some advertising, promotion, create market demand. At the end of the day,
pull from the customers is what will motivate everybody in the chain to
deliver the solution.
Youre right I would
not support anybody making an investment with a software vendor to port
their software so youve got it on the platform. That is a complete
waste of money unless the demand is there. It will just sit on the shelf.
So our energy is going into creating the customer demand.
So you want to find the people
who want to get the job done in their business, and suggest to them this
would be a good platform to do business on because you have a solution in
Yes, and frankly weve not had
too much trouble with the software vendors in the industry segments
were in, motivating them to move to IA-64 and taking a long-term
view. Thats because theyre seeing the business.
Speaking of segments,
youre got first-hand experience selling the HP 3000 in one of those
markets, manufacturing. Can the HP 3000 earn new manufacturing customers
today without name-brand manufacturing solutions?
I used to sell the HP 3000 to
manufacturing companies. I joined HP as an HP 3000 sales rep in 1980, and
my specialization was manufacturing industries. You wouldnt say
manufacturing is an industry focus. This fifth target is aimed at the
small- to medium-sized companies who dont want the complexity of an
SAP or a Baan. They want the reliability which the NT platform doesnt
have. That segment is fairly generic and aimed at a particular type of
I think theres a lot of
people who, if we get the right solutions, will stay and develop more with
the HP 3000 platform. Its got what the industry aspires to. This 25
years of pedigree means its one of the most reliable systems in the
But do you think you can get
along in that manufacturing mission without better-known names than your
Yes I do. I think at the end of the
day, customers at that level typically dont have a huge IT department
that surveys the industry. All they want is a system that will be
implemented at a low cost, low hassle, and will work. Theyll be less
bogged down. I think the HP name gives a huge sense of feeling about
reliability and supportability. Thats about the full level.
Theyll get to know the HP platform rather than the application
software. At that level of company they havent got the interest in
studying the IT industry and going for the big names.
I think theres a sense,
too, that a lot of those companies feel the big names havent got time
What do you see as the unique
advantage that the 3000 offers over other HP computing platforms? Its
kind of like asking someone who has several children, Whos your
The analogy I always use is
If you get two ties for Christmas, what was wrong with the other
one? I dont think its decided on hardware platform or
operating environments. Its decided on the application solution the
customer wants. At the end of the day, the customers choose.
The thing that weve
brought to the HP 3000 that it didnt have two years ago is a longer
life than people thought. The nervousness that people might have had about
putting new applications on the HP 3000 because theyd have to
move has become less and less. Theyve seen some new big names
that have signed up, like the regional airlines that just put in new
systems, behind all of them an HP 3000.
Some of them might not have
known it was an HP 3000. Theyre the smaller companies that dont
have a large IT organization doing the in-depth platform evaluation. What
theyve got is a business need, and someones come along with
combination of service, application software and a platform to run it all
on thats absolutely met the business need. Thats why
theyre making the call.
So Im not going to give
you the 28 reasons why this tie is better than the other tie. You choose
the tie that matches the jacket, and you make the jacket call first.
Were in an exceptionally
strong position. I have NT platforms, Unix platforms, MPE platforms. We
have the platforms to supply the infrastructure to meet the customers
needs. Theres something else: the services and the application
Harry Sterling gets the benefit
of a hardware platform built on the fact that we are by far the market
leader in the Unix segment. Weve just gained huge market shares, up
eight points in the first quarter this year. Were shipping volumes of
the HP 9000, and that drives a big R&D investment back into the
What do you think has
contributed to the HP 3000s resurgence?
Its the NT platform. There
was a time that what was causing a movement away from the HP 3000 platform
was it all had to be Unix. We had to move away and get onto a single
operating system. The single Unix never happened, and wont happen.
The NT environment there isnt a customer today who has a Unix
or NT strategy. They buy both platforms. Customers are getting to used to
the idea there might be bigger issues to solve than worrying about whether
youve only got one operating system or not. I think the desire to
rush off the HP 3000, or comparable platforms that are proprietary in
nature, and move them all to Unix people have gone, Well,
thats not the real issue. Thats made a lot of our
customers much more open to continuing with the HP 3000.
How much do you think the Year
2000 has contributed to the resurgence?
A huge amount. To my business
overall the Year 2000 has been a huge challenge. Ive invested a huge
amount of R&D to Year 2000 compliance, but the opportunity for business
has been huge, and still is. Customers have abandoned trying to fix
existing systems and deployed new ones, based on new application software.
New Year 2000 compliant systems have been deployed that have required the
customer to upgrade their platforms. So its been a bittersweet thing
for me, because making my products compliant is not the sort of thing where
you just updated the brochure. We have R&D engineers working seven days
a week, 24 hours a day on some of this compliance stuff. On the other hand,
the business growth has been phenomenal.
The Year 2000 issues have
provided a pretty safe tunnel for the HP 3000. Do you think the 3000 is
going to wind up getting on the outside of that tunnel and losing its
I certainly dont think on
the second of January in 2000 everybodys going to say, Right,
everythings okay. I think Year 2000 issues may continue a
little bit past the Year 2000. I dont believe its all going to
dry up. There has been a lot of business growth fueled by that, but on the
other hand that probably reduced some of the investment in the new business
systems a company needs.
Once the Year 2000 issues are
behind us, I think there will be an increase in growth as companies catch
up with some of the new systems they would have liked to put in but had
been diverted to fixing Year 2000. There is nothing business strategic
about fixing Year 2000 issues. Youre investing money in standing
still. Once companies have done that, theyll have to invest money in
moving forward. We see a quite rosy picture for all platforms, including
the HP 3000.