The show was relatively modest for the number one technology vendor, but it’s safe to say that Hewlett-Packard’s recent Discover user conference met its most important goal: showcasing the continuing evolution of a new strategy around its key enterprise and consumer markets that played to the strengths of the company’s current capabilities and aligned well with the vision of its new leadership.
In the end, while not billed as such, Discover was clearly the latest opportunity for HP to float its new strategy to its customers and test that strategy – and therefore this new overall vision – in front of its most important audience. While the equity markets continue to scratch their heads in confusion, it’s clear that, based on my conversations with customers, these early tests of a vast and unfolding strategy are earning top scores.
That new leadership is not only being tested on the technology and product front, but also on the political and legal front. With the cut-off-your-nose announcement by Oracle that it was de-supporting Itanium-based systems, HP Discover was also an opportunity to see how HP planned to respond to the kind of shenanigans that are making Oracle look silly and frivolous – if not a little scary – in the eyes of its critics.
The result was a well-orchestrated one-two punch back that, in the opinion of many (Dennis Howlett and Rob Enderle seem to concur) has the potential for turning the incoming Itanium attack by Oracle into a serious, self-inflicted wound. Unless Oracle does something about it.
First, HP lined up a top Intel executive, Kirk Skaugen, to run through a presentation to the Discover audience that included a clearly stated roadmap for Itanium. Lo and behold, it turns out that Itanium is strategic and has a future at Intel and HP. Of course, apparently everyone but Larry Ellison knew that (even Mark Hurd should have been in the know), but it was nice to see the roadmap clearly and unequivocally spelled out to the audience.
Then, HP unleashed its lawyers and sent Oracle a nasty-gram in the form of a demand letter. The letter, really a pre-cursor to a legal fight, claims that Oracle and HP have existing contractual agreements that require Oracle to continue to support Itanium. The letter demands that Oracle honor those agreements.
The letter has two impacts. The first is that it places HP squarely on the side of its customers, many of whom are both incredibly unhappy at being played by Oracle as part of its “get HP” campaign as well as scared of facing down Oracle’s massive and aggressive legal team by themselves in a one-to-one fight. Having HP offer to throw the first punch on behalf of its customers is a nice, clean, customer-friendly act.
The second impact is that the letter actually gives Oracle a semi-gracious way out of an embarrassing mistake. They don’t even have to say they are backing down because HP told them they should, they can simply announce they are changing their minds, and then issue the following statement:
Dear Itanium customers,
“With today’s announcement, we are giving customers the best of both worlds – more value from their existing hardware, which we plan to support indefinitely, and an option to upgrade to future technologies, if customers have a business case to do so.”
I personally think Mark Hurd would be a good one to add his John Hancock to the statement.
While this looks like a lot of crow to swallow, the truth is this kind of crow tastes delicious when seasoned with enough customer good will. Oracle, in fact, knows quite well the recipe for the sauce: they whipped up a big batch back in 2006 when they announced their Applications Unlimited plan, which in a similar vein promised never-ending support for a set of products (PeopleSoft, JDE, and later Siebel, among others) that Oracle had threatened to de-support in the muscular aftermath of the company’s acquisition spree.
That’s why the above statement might look familiar to anyone who has followed Oracle’s strategic gyrations: it’s a close paraphrase of the statement from former Oracle co-CEO Charles Phillips on the announcement of the company’s Applications Unlimited strategy in April, 2006.
This is hardly the only example of Oracle dining on crow, and, to their extreme credit (and this I mean with no sarcasm whatsoever), admitting failure and moving on is one of Oracle’s greatest strengths. As a 25-year Oracle watcher, the list of mistakes that the company has managed to move beyond is impressive: desktop apps in the 80s, many failed versions of Oracle Financials in the 90s, network PCs, Oracle CRM, and on and on.
The Itanium kerfuffle is another one of those moments, and HP’s letter actually gives Oracle an out that it should take if it wants to keep its relations with the 140,000 joint HP/Oracle customers on an even keel.
Meanwhile, back at the conference…..
While HP was offering Oracle a way out of its own mess, HP was also bolstering its new strategy along four key axes. Here’s my brief summary:
Converged infrastructure strategy. The strategy in a nutshell is this: HP is offering a customer-choice smorgasbord of hardware and software designed to support whatever IT scenarios a modern customer could possibly wish for. To this end HP is deploying an impressive array of computing, networking, and storage devices that can serve as a platform for a mix of on-premise and on-demand functionality. On top of the hardware HP can support industry leading virtualization technologies and deliver these capabilities in advanced data centers (including a pretty amazing, state-of-the-art, energy efficient turnkey data center.) These capabilities in turn support multiple deployment models, including dedicated appliances for messaging, data warehousing, and BI, as well as hybrid/mix and match cloud and on-premise systems.
Cloud strategy: HP demoed and otherwise discussed a number of its key cloud assets, including its CloudSystem management system. The demo of CloudSystem was impressive: a point-and-click interface for defining, configuring, and deploying an application or service-specific cloud instance that includes applications, operating system, database, web server, hardware, virtualization, network, security, etc. The instance is stored in a catalogue and can be pointed at any combination of on-premise and on-demand resources, appliances and non-HP hardware included. Against this functional backdrop, HP Finance announced $2 billion in financing for its future cloud customers.
Software and advanced analytics: HP showed off its growing analytics chops in a couple of ways. The 60-day old Vertica acquisition got some front and center action at Discover, and, while it’s clear that Vertica is going to butt heads with other similar advanced analytics platforms (SAP’s Hana being the best example) there’s plenty of runway in the big data market for Vertica and Hana to make a go of it. HP also showcased its IT Performance suite, and demoed an analytics dashboard with over 50 KPIs on IT performance that demoed extremely well (and kudos to software exec Marge Breya for doing a live demo, something that HP isn’t exactly famous for doing.) More importantly, the analytics platform and its KPIs represent a jumping off point for a broad range of KPI-driven analytics from HP in coming months.
Security: It’s been a great month for the security business – nothing like massive data breaches being reported on a daily basis to provide the backdrop for pitching a strong security story. So having the ArcSight folks on stage to show off how prescient this acquisition has been in driving a strong security message from HP was a big plus.
Finally, there was the announcement that the HP Touchpad will come out in a couple of weeks. This not only takes some pressure off my wife as to what to get me for my birthday (assuming I can get her to read this post), it signals the beginning of a wave of consumer-side announcements that will be highly strategic to HP’s consumer/enterprise bridge strategy. The Touchpad announcement will be followed sometime later in the year by the Pre 3 release, HP’s best shot at taking on the Apple and Android markets. Whereupon HP will have the market wherewithal to start talking about what 100 million WebOS devices will mean for customers, developers, consumers, the enterprise, and those fussy equity markets as well.
That discussion about WebOS and the convergence of the consumer and the enterprise promises to be a significant one. At Discover the veil was further lifted on an emerging enterprise strategy that is looking better and more defensible with each announcement. But only when the role of WebOS and the consumer side of the business become better known and understood will the full force of Léo Apotheker’s new vision for HP see the light of day.
From what I saw this week in terms of both the enterprise strategy and the WebOS strategy, that convergence will be well worth the wait.