January 23, 2006 4:00 AM PST

HP outlines long-term strategy

Hewlett-Packard executives are mulling plans to improve over the next 18 months the technology the company uses to manage its direct sales, while it continues with commercial printing efforts and acquisitions of software companies.

Two weeks ago, HP CEO Mark Hurd, the company's board of directors and senior executives gathered at the computer giant's annual management retreat to discuss long-term strategies.

In marathon sessions that spanned the course of several days at the posh Esmeralda Resort & Spa in Indian Wells, Calif., HP's leadership hashed out HP's long-term strategy. Those in attendance worked from early morning to late evening, with few breaks given beyond meals, said a source with the company.

"By the time the lectures were done at 10 p.m., we were pooped and went to bed," the source said. An HP representative declined to comment on the planning sessions.

According to the source, HP is considering making more acquisitions in the infrastructure software arena. Those acquisitions would include security software companies, storage software makers and software companies that serve the blade server market.

The acquisitions would dovetail with HP's growth plans for its Technology Systems Group, which has already bought companies such as AppIQ for storage management.

Hurd has previously said market trends indicate a movement away from mainframe computers and a shift to blade servers, as well as virtualized storage. HP is likely to follow those trends.

Meanwhile, in HP's Imaging & Printing Group, the long-term plan to develop commercial printers is likely to continue.

"We want to develop the next Heidelberg press," the source said. Of course, HP said basically the same thing back in 2002.

On the chip front, although HP and Intel have had a long relationship involving their collaboration on the Itanium chip, delays by Intel have created frustration in the HP camp, the source said. As a result, HP may use Intel's archrival Advanced Micro Devices as a cattle prod of sorts to the chip giant, the source noted.

"We plan to use AMD's Opteron more and more," the source said.

Opteron competes chiefly with x86 chips such as Intel's Xeon. HP sells ProLiant-brand servers with as many as four Opteron or Xeon processors. However, x86 chips have steadily gained in computing power and overlap in abilities with HP's lower-end Itanium servers.

Intel declined to comment, other than to note that HP has been a very valuable partner, said Scott McLaughlin, an Intel spokesman.

Personal Systems Group
One area expected to get an internal technology revamp in the coming year and a half is direct sales, the HP source said.

Last July, HP announced that it had hired Randy Mott, Dell's former chief information officer. Mott, who serves as HP's CIO, previously

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HP - INVENT????????
Since the 1970's I have watched the moves of management of American companies incorporate value engineering (designed obsolescence) and other moves since the only thing American sales forces can sell on is price. Now HP is joining them. They will end up with the quality level of Dell since that is the only way they can think of to compete.

As we installed a new Small Business Server for a customer this weekend, I commented that the customer should now be set for many years since they had more computing power than they will ever require. Our operations director replied, yes except todays equipment doesn't last like it used to and the software companies obsolete their software.

I thought back over the years and the best return on investment that I have seen was the Tandy Model 16 with SCO Xenix. Those machines served the needs of the small businesses I serviced for many years.

What the manufacturers do not realize is the fact that for most small businesses, the technology level we have at this time would be sufficient for many years. The problem is the hardware won't last and the software companies will make the OS obsolete.

Quality and long product life are important. Small business will have more opportunity to develop products and pay their employees better if they do not have to constantly replace low quality systems.

Is the goal of America continued world leadership of declining to a second rate or third world country? The decisions of our government and corporate will decide that fate.
Posted by EdShaffer (19 comments )
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No output devices?
I was surprised the article made no mention of HP's output device plan, other than the somewhat foggy implication of the company trying to move into digital commercial presses. If HP does become the "next Heidelberg," it will be interesting to see if they develop proprietary ink supply systems that are made obsolete every three months to prevent printers from sourcing ink from preferred vendors (as it their current racket with inkjet printers). Also, does anyone really believe HP still has the skill and integrity to make something as substantial as a printing press? As recently as ten years ago, HP laser printers were renowned for their durability and ruggedness. Now their desktop output devices are flimsy, disposable, toy-like commodity POSs that should make anyone with the name of "Hewlett" or "Packard" completely ashamed. Yeah, "HP-Invent" . . . my foot. In my view, this once-solid company deserves the same sort of grieving lament and eye-rolling that characterized another once-great American icon . . . GM.
Posted by Tom CyBold (30 comments )
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AMD to have 40% market soon
<a class="jive-link-external" href="http://sharikou.blogspot.com" target="_newWindow">http://sharikou.blogspot.com</a>

INTEL is hopelessly behind
Posted by sharikou (106 comments )
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Why are you quoting someones opinion as a fact?
Posted by Andrew J Glina (1673 comments )
Link Flag
The difference in HP's improvement is clearly visible to the end user...
Lately HP seems to be getting it right. If you notice it is one of the few companies with ethics. Though it's a company which is cutting costs right now, the below facts about the company make it a solid investment and future growth is assured.

a. You might have noticed that its Chat support division is now GDPowers certified. Though Dell and HP were in the running for the first company to be certified, HP won it hands down. Dell was a long way off. Dell offers charge phone support except for the one month standard hardware warranty. Other than this it also offers email and chat services, but not many know that it exists. HP on the other hand provided a 90 day free telephone support, a one year hardware warranty, and lifetime free chat support. Lifetime here means that as long as the user wants to use it. If the hardware is bad, ofcourse they make the suggestions for replacement. I personally spoke to a guy by the name Harold, and the guy was great. Also there is a way you can access support for any software you have purchased issues regardless of the make of the system. All you need to do is state that you own a particular model and proceed to troubleshoot. And their suggestions actually work.
b. HP has the edge in the AMD series. With Intel coming out with mediocre processors lately AMD is almost on even kneel with Intel even as we speak. HP has always professed that they would push the products based on the market requirements. And you now know for sure that AMD makes the fastest servers and PCs for 64 bit computing. In fact, I believe Steve should have opted for AMD instead of Intel. (Read <a class="jive-link-external" href="http://sharikou.blogspot.com/" target="_newWindow">http://sharikou.blogspot.com/</a>)
If you notice HP's involvement in the development of the Itanium failure, you would understand why HP is now trying to stay away from Intel.
c. They are cutting down costs rampantly. If you notice their range of Compaqs and the Pavilions, they are focussing on the right product mix and technology. (Features like Lightscribe, media drives (hardware features) are common feature while other vendors provide software features) However it appears that they are cutting down costs by 25k US jobs last year. Wonder how much it would be this year.

By the way, there are a few details you might require to contact HP chat professionals. One would be the model number of a HP system and also you would require. That would suffice for software issues. You would not be able to access support for hardware. There are a lot of procedures required.
Posted by thedevilbegone (139 comments )
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Couldn.t resist a swipe at a Dell...
The charges for Dell support really puts me off.. But here are a few newslinks for you on the current state..

<a class="jive-link-external" href="http://news.techwhack.com/2927/dell-moves-closer-to-possible-amd-based-pcs/" target="_newWindow">http://news.techwhack.com/2927/dell-moves-closer-to-possible-amd-based-pcs/</a>
(Ummm..Probably on track)

<a class="jive-link-external" href="http://news.techwhack.com/556/dell-philips-order/" target="_newWindow">http://news.techwhack.com/556/dell-philips-order/</a>
(Big order for Dell)
<a class="jive-link-external" href="http://news.techwhack.com/2279/231011-dell-claims-intel-would-dominate-amd-in-2006/" target="_newWindow">http://news.techwhack.com/2279/231011-dell-claims-intel-would-dominate-amd-in-2006/</a>
(Once more Dell bites the dust, but too soon to tell in the servers market)
<a class="jive-link-external" href="http://www.itjungle.com/breaking/bn011206-story01.html" target="_newWindow">http://www.itjungle.com/breaking/bn011206-story01.html</a>
(HP on its way to beat Dell in the AMD market for servers)
Posted by thedevilbegone (139 comments )
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Your first two sentences are SO wrong, it hurts. From laughing so hard.
Posted by inseattle (19 comments )
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Looking at sustainability of brand loyalty as a strategic driver should be at the top of the list. The last two notebook computers I purchased were HP. I generally have been happy with them. However this week I attempted to get help when my WiFi card went out. I spent 3 hours on the phone with someone with so heavy an Eastern Indian accent that I had to spell and have her spell many words. At the end of the three hours I was no closer to a solution than when I started. Perhaps this is not as important to HP leadership as selling as many products as possible and losing those customers that run into problems. However, It will be a major factor as I consider my next notebook and in my recommendations to my colleagues. I would think that others, whether they get their problem resolved or not, may have the same reaction.
Posted by brucevbrian (1 comment )
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