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NewsWire Q&A: Ken Sletten

Getting Customer Development Needs on Target

Ken Sletten has a great bearing on putting customer advocacy on target. As the current chairman of the SIGIMAGE special interest group, he's managed the proposal and balloting process that's yielding significant enhancements such as b-tree indices for IMAGE/SQL. The system manager works at the Naval Undersea Warfare Center Division in Keyport, Wash., managing an in-house software suite that performs all shop processing and engineering control functions for the US Navy's Mark 46 and Mark 50 Lightweight Torpedo programs. He took a bead on his first advocacy target for the HP 3000 in the early '90s, when he was one of a handful of users asking HP to start new development for Transact, a then-flagging language. SIGRAPID members, which included Sletten, wrote the first pages of customer communication with HP at a time when "Customer First" was just a wish instead of an HP 3000 division directive.

Sletten's experience with the 3000 dates back 15 years, when he became system manager for a Series 42 HP 3000 and later a software engineering team member. After serving as the SIGRAPID chair for two years, and as IPROF chair since its first incarnation by the Interex SIG Coordinating Committee, Sletten has had lots of time to talk with HP management about maintaining the value of the 3000. This spring he made a proposal to make that happen, routing support funding to the R&D arm of the 3000 division. HP 3000 division manager Harry Sterling's first reaction was to suggest an alternative, one that would have customers funding special projects on their own. A customer with a lot of ideas and access to HP, Sletten has a clear set of targets about HP's 3000 goals. Since Sterling's direct-report manager changed recently, we believe the thoughts of a customer like Sletten would make a great primer for the new chief of the Enterprise Server Group on what could be done for MPE customers. In this first of a two-part interview, we asked Sletten how he'd clarify his customer-funded R&D proposal and what HP ought to do about it.

You've proposed that HP fund its 3000 development through support dollars. Why do you think this is necessary in the 3000 marketplace?

I believe there is a combination of several factors that make additional funding for HP 3000 software R&D necessary at this time:

The current HP funding model for software development, which depends almost entirely on new sales to support new software projects and major enhancements to existing products.

Even though CSY has significantly exceeded their 3000 sales quota for the last two quarters, I expect that the absolute magnitude of those sales will still not be large enough to fund all the necessary R&D work that needs to be done in a timely manner and still allow HP to maintain what they consider an acceptable profit margin.

The relatively recent explosion of and focus on the Internet and client-server computing has resulted in a significant spike in the number of "new" things that the 3000 needs to be able to efficiently interface with if it is to remain strong and competitive into the next century. Note that by "relatively recent" I mean in comparison to the overall 25 year period the 3000 has been in existence. In short, time is of the essence.

HP GM Harry Sterling says that such funding isn't a good idea because it muddies the stream of revenue the 3000 generates. Should a customer care about this mixing of revenues?

I confess I'm reminded a little bit of what we have seen in some cases in my end of the Government: In the last few years our organization has gotten seriously into "Total Quality," TQM, the Deming Method and so forth. And done correctly, implementation of the TQM philosophy can clearly have some positive benefits. But you have to be on guard against the means becoming an inflexible end onto themselves, rather than a means to a more productive end.

Extrapolating to the 3000 funding situation, if a customer need arises that cannot be well met within the constraints of the current funding model, I hope HP would be willing to consider an exception if that becomes necessary, as long as it does not reduce their profit margin.

Sterling has counter-proposed that groups of customers pool funding to support development of special projects for the HP 3000. What's your opinion of his proposal? Do you think it will work, and what has to happen to make it successful?

Let me back up one step before I answer that. At IPROF-97 the proposal to HP was to add a part number for "CSY R&D" to each and every HP 3000 software support contract. Both Harry Sterling and Doug Blackwood said that increasing the overall cost of 3000 ownership for all new and existing customers was not a good idea and would make the platform less competitive. I also recall Doug Blackwood saying that their experience shows that even a small percentage increase can have a noticeable negative effect with some customers. I have no factual basis to doubt what they said, so for now I'll accept it at face value. We certainly don't want HP to do anything to discourage new customers from buying new HP 3000's.

So, now what ? Let's modify the proposal in one small but important factor: go with what Harry and Doug said, and make it voluntary. However, in doing that I believe it is very important that any such voluntary program be structured in such a way so as to encourage and allow participation by the maximum number of new and existing HP 3000 customers. And therein lies a key problem for a significant percentage of the customer base:

Those of us who come under the public sector have an order-of- magnitude-and then-some harder time getting money and various levels of approval for anything that amounts to a new procurement; especially one that would require coming up with a large up-front lump sum cash outlay ‹ especially if it involves anything classified as "computer-related equipment or services." It is tremendously easier for us, and I believe most public sector sites at all levels of government, to add a percentage amount to what are recognized as required mission-critical computer maintenance contracts that already have approval into the out-years.

From what I hear, a good number of large private sector firms in some cases are not too much better off than government sites, when it comes to getting money and approval for computer-related purchases. While realizing that there would be a lot of details to work out as a blue-sky first cut, how about something like this for a starting proposal:

HP comes up with a product number for a new, voluntary item on the HP 3000 CPL. Let's say it's part number "A3000RD." The nomenclature for A3000RD says "R&D Lab Software Engineering." Purchase price is low enough that it should be down in the noise for most sites and therefore purchasable on a credit card. Let's make it $500 for now, for quantity one A3000RD. Just like buying terminals or PC's, if you want more than one you order quantity whatever of that part number.

Since this is an optional purchase product, we can probably dispense with any kind of complicated tiered pricing scheme: Regardless of the size of your system or the number of users, if you want more say in what enhancements get funded under this vehicle, you buy a larger quantity of product A3000RD.

Just like for other 3000 software purchase products, there is a yearly support cost to maintain the product (I am about to try and make the case to Harry Sterling for that funding model exception I touched on earlier): The support cost per quantity one A3000RD is $50 per month. However, this product is different, in that it is "used up" on an ongoing basis doing the software R&D. That means there is no additional enduring end product that the HP support organization needs to "support." Once the new enhancements are merged into MPE/iX, IMAGE/SQL, compilers and other products, the HP support organization will still be able to collect their monthly product support fee for those products just as they do now. And since additional enhancements should help increase the longevity of the products that are enhanced, it seems like the support organization could reasonably expect to take in more money in the long run. So it should be possible to make an exception in this case and make the A3000RD "support" dollars a straight pass-through to the R&D Labs.

I believe that over the next five years the total additional HP 3000 R&D dollars that could be generated by using a support contract pass through as described above is much higher than anything that would require separate up-front procurements by all sites that wished to participate.

As to how all the individual sites that decide to purchase one or more "copies" of A3000RD could effectively coordinate their efforts and input to HP, I don't have a proposed end game for that question yet. There would seem to be an obvious opportunity for the Interex SIGs to take a role in this, if it was carefully done. I would suggest this facet of the problem would be a good subject for further discussion on HP3000-L and at HP World - Chicago.

Your own company works with the HP 3000 using in-house applications. How important do you think new, commercially available applications are to the HP 3000's continued success?

We all know this answer: In the long run, it's the applications. But from what Harry Sterling has told us, HP has made efforts to attract major new players like SAP to the platform without much success. I wish I had a good answer to this important question. Right now, I don't.

Will a Supplement strategy, as HP outlines it, work for most of the customer base?

I don't know. HP seems to think it will. I do have one comment on the HP theory that "if you are dealing with the Internet, you are by definition in the Supplement category." That is obviously correct on the software development side, but I would suggest that it should not and does not need to be true on the production side. With OpenMarket, Samba/iX, Apache/iX, BIND/iX DNS, Syslog/iX, and GNU C++, we are real close to where a 3000 can be a fully-functional, stand alone Web server. Being able to do that is important, in my opinion. By the way, in mentioning the above products, I want to recognize three people who were key in making the last five happen: Lars Appel, Mark Bixby, and Mark Klein. If HP wants to supplement something, those people would be good places to start.

In Part Two: a detailed look from the SIGIMAGE chairman's seat at what HP needs to do to maintain the value in IMAGE.
Copyright 1997, The 3000 NewsWire. All rights reserved.