HP defends strategy against Sun"s Schwartz

Von Rodney Gedda
While in Sydney last week for a sales conference and to visit local customers, Sun Microsystems Inc."s president and Chief Operating Officer Jonathan Schwartz made a number of statements regarding the strategies of its competitors, most notably Hewlett-Packard Co. (HP).

Here, Computerworld"s Rodney Gedda talks to Peter Hall, HP"s Asia-Pacific director of business critical systems, to get a formal response from the vendor in the wake of Schwartz"s claims.

Computerworld (CW): Schwartz has labelled HP"s move to Itanium as a disruptive change for its customers; how does HP view the move?

Hall: The move to Itanium has resulted in eight out of nine of the current RISC vendors committing to provide solutions based on Itanium, and the only laggard now is Sun which has to work out how to get there. HP made the correct decisions early on, and has helped the industry design and deliver what is becoming the standard architecture for enterprise-class servers. And HP customers appreciate this benefit, and have stayed with us.

Today there is more momentum and investment by HP and others on the development of the Itanium processor technology than on any other processor in the world. HP has got it right by helping contribute significantly to developing and improving the world"s first, true industry-standard, high-end processor family, capable of scaling and running operating environments including those that represent 86 percent of the world"s OS preferences today (Unix, Linux, and Windows).

CW: What about the claim that HP-UX is a dying operating system?

Hall: HP-UX, is a significant business for HP. HP is committed to our customers and to our products, and we have laid out the clearest, and most complete path of how we will continue to grow and enhance the best Unix operating environment available. This again is another fact.

HP has also made significant investments in developing our own plans for the evolution of our systems. As an example, HP is the only server vendor today that is able to offer a full range of our existing PA-RISC systems, from low-end two-way servers to HP Superdome at 128 CPUs, and provide an evolution path that simply involves the customers swapping out the PA-RISC CPUs and replacing them with an Itanium processor. It is true that no other vendor has on offer or achieved the same simple evolution path, and clearly this is as a result of our ownership of our strategy, ownership of our technology, and ownership our operating systems, whilst embracing industry accepted operating systems like Windows and Linux. Now that"s innovation, and no one else has matched it.

HP invents, designs, builds, sells and supports our enterprise systems. We also have a large services business to include other platforms. Mr Schwartz is probably correct when he says he doesn"t know what we support, but it shows that even when admitting ignorance, he still makes up subjective, fact-less opinion.

We are the number one company in the Unix market in revenue terms, leading in mid-range and high-end servers. I think Sun likes talking about HP so much, as it enables them to pretend they are in the same class, when they are really in a minor league.

CW: What about Schwartz"s comparison between HP and the Unisys of the early nineties?

Hall: HP is unclear what connection Mr Schwartz is trying to make between HP"s leadership in open source systems and Unisys"s project. Perhaps a better history lesson for Mr Schwartz might be Wang, which was essentially a hardware company that eventually realized it was a software company trying to fight in a shrinking hardware market, and eventually failed in both markets.

CW: Schwartz talked about open source software extensively, what"s HP"s stance here?

Hall: HP has been actively involved in the open source community for the past 10 years - as long as all major Linux vendors combined. HP contributes development resources like code, hardware, software and lab space and employs engineers who work directly on the Linux kernel. Notably, HP leads the Open Single System Image project to turn Linux into a high-availability cluster foundry.

Today, HP is the leading provider of platforms for open source software, being the largest supplier of platforms for Linux, in the world. HP has fully embraced the value of open source, and led the market again in innovation making common servers available to support open source software, provide specific valued enhancements, such as high availability solutions like HP"s MC/ServiceGuard for Linux, as well as simplifying management through HP solutions.

HP System Insight Manager provides one common system management environment, for managing all HP Linux, Windows and HP-UX platforms, from a console that could be running any one of these operating systems.

CW: The claim was also made that recent HP customer wins from Sun were not true migrations but "discounts" to commodity platforms. How do you respond?

Hall: Globally, HP has won more than 200 Sun customers across a broad spectrum of industries.

Customers elect to come to HP for greater flexibility, more performance, robustness, and choice. HP is successful with these customers by focusing on what we can do for them, rather than just putting energy into trying to point out the constantly changing and unclear strategy that Sun is grappling with today.

Mr Schwartz is right; you should talk to some of the customers that have moved to HP. The recent 200 HP customer wins include Asia Pacific customers like the University of Hong Kong, Korea Broadcasting Service, LG Cable, Shingu College, Housing and Development Board Singapore, Schneider Electric, Tech Semiconductor Singapore, and Citibank.

Virtually all these customers are large enterprise customers that have moved from Solaris to HP-UX. For example, Hong Kong University off a Sun E10K to a HP Superdome. Also, NTT Docomo completely replaced its entire Solaris infrastructure to support its 40 million mobile telephone subscriber business due to performance and reliability concerns. The project was in excess of $US50 million, and in Mr Schwartz"s terms, was definitely a migration, not a discount! Clearly if Sun could have met its needs, it would not have gone to the trouble and investment, but reliability issues caused it enough pain, and financial exposure, to justify such a move. The contract states that the systems must never miss a phone call and it couldn"t trust Sun for that.

Contrary to the "success" that Sun claims with its HP Away program, 98 percent of HP"s top 600 AlphaServer customers remain with HP today. They are confident in our roadmaps and understand the move to industry standard platforms, which HP allows them to do at their own pace.

As an example, in Asia Pacific alone, we have observed that since the HP and Compaq merger, our AlphaServer Customers are staying with us, and investing on average around 25 percent more with us than previously. We are also observing that they are investing more in our HP9000 and Integrity Servers, increasing the overall investment these customers are making with us by 33 percent. They are voting with their investments, knowing that HP"s path for them is the smoothest, easiest, and lowest risk.

CW: What"s your reply to Schwartz"s statement that HP is becoming less innovative and a "channel" company?

Hall: HP is a market innovator, creating added value and leadership in industry standard platforms, products and technology, our solutions and services partnerships as well as a highly competitive go-to-market and fulfillment strategy.

HP"s approach is heterogeneous and open. We recognize that customers" real environments need to embrace multiple operating systems, vendors and IT strategies.

Unlike all our competitors, HP"s Adaptive Enterprise approach embraces the full spectrum of our customers" technology investments, including access devices, PCs, printing and imaging and mobility.

The bottom line is that there are large differences between HP and Sun today, which must concern it to put so much energy into trying to spread so much misinformation.

In the enterprise computing area, our capability and innovations in moving customers to industry standard servers, increasing the value of the usage out of IT through virtualization solutions for example, and providing the strongest and most complete portfolio of management tools, is helping customers build more adaptive enterprises whilst helping them significantly improve the economics of the IT investments.

HP"s development strategy is to deliver the best customer choice and value with our standards-based server portfolio. With HP, customers have the ultimate choice to pick the architecture that best fits their business needs. We continue to drive our portfolio of five product lines to three based on two industry standard architectures: x86 and Itanium. HP is the only vendor with a complete line of industry standard systems for all tiers of the data center from scale-out to scale-up architectures.

CW: Going forward, how do you see HP and Sun competing in the enterprise systems space?

Hall: HP is serious about providing a smooth evolution to HP Integrity servers while protecting our customers" investments. HP offers programs for both Tru64 and HP9000 customers to assist them at every stage of their evolution to Integrity.

HP is completely committed to our operating systems strategy. We continue to deliver on our commitments, and lay out clear and comprehensive plans for HP-UX, OpenVMS, and NonStop, moving all of these to Itanium, and allowing customers to do so at their own pace. We also have the most complete portfolio to support the major industry standard operating environments such as Windows and Linux, using the same industry standard platforms, allowing customers to significantly simplify the datacenters, reducing complexity, and driving out the costs that complexity breeds.

Finally, we have one of the strongest portfolios of management tools and software, all owned by HP, where our innovation allows us to significantly improve customers" operations of their systems, storage, networks, applications, services and even business processes. The real risks are staying with Sun. There are serious uncertainties facing Sun customers and Sun"s recent campaign appears to be an attempt to distract the market from those realities.

The company has struggled to make a profit and is shooting at all sorts of strategies. Now it is talking about giving away servers on subscription, but can that work?

Mr Schwartz"s comments waste our customers" time and are not productive for the industry. You"d expect the COO of Sun to be a bit more responsible.

Customers who are concerned about the uncertainty, disruption and fragmented approaches offered by Sun and are looking for the safest and best long-term strategy need look no further than HP for industry standard options ranging from HP ProLiant to Integrity and NonStop servers.