Business Tech

Hewlett-Packard has certainly benefited from the uncertainty over Sun Microsystems' future, and now it's lined up a few partners to help win over more Sun customers.

In light of Oracle's failure thus far to seal its takeover of Sun, HP announced on Tuesday that it has teamed up with Microsoft, Novell, and Red Hat to offer further incentives to Sun customers.

HP reported that during the 12 months ending October 31, it scooped up more than 350 customers from Sun with offers of specialized services and support, and financial incentives through its HP Complete Care program. Now, the company said, it has enhanced this program with the help of its new partners to give Sun customers what HP is selling as "peace of mind."

HP said its new Complete Care program will offer such benefits as a 50 percent discount on Novell's Suse Linux Enterprise Fundamentals training, 25 percent off Red Hat Global Training, and greater support through its Migration Competency Center in France.

Thanks to its new partnerships, HP said, it can also offer customers the flexibility to choose from among server operating systems, including Unix, Windows Server, Suse Linux, Red Hat Linux, and even Sun's own Solaris.

Oracle announced its intent to buy Sun in mid-April, but concerns from the European Commission and other parties over an Oracle-owned MySQL have stalled the deal. Recent promises from Oracle to preserve and protect MySQL seem to have eased EC concerns. But each day the deal remains unfinished, Sun customers likely wonder whether they should take their business elsewhere.

A recent IDC report showed that Sun had suffered a 35 percent drop in third-quarter sales year over year, compared with much smaller declines for rivals HP and IBM.

Yet even before the turmoil with Oracle and the European Commission, HP has long taken advantage of the ups and downs of Sun's fortunes to try to woo away customers. HP's strategy has been to dangle incentives and even free services to convince companies to move away from Sun's Solaris operating environment and Sparc architecture.

The trend-setting MacBook Pro and Air both now face tough competition from Hewlett-Packard, which has the resources to match, and in some cases exceed, Apple laptop designs.

HP Envy 13

(Credit: Hewlett-Packard)

I will expand very briefly on a previous post where I compared, on technological merits, the 13-inch Apple MacBook Pro and Air laptops with an HP Envy 13 in response to some of the comments attached to the post.

I had stated, as an opinion, that the aluminum-clad HP Envy 13 had eclipsed Apple MacBooks technologically in some crucial areas. Namely, processors offered, screen resolution, graphics, and battery life.

The assertion that the HP Envy 13 has surpassed, in some important respects, the MacBook Air and 13-inch MacBook Pro in technology shouldn't be that surprising considering the financial and technological resources that HP has.

Companies like HP and Dell bifurcate their lineups into inexpensive (typically retail consumer models) and more expensive (often business models). Some models are of decidedly lower quality than Apple--as many comments quickly point out--but some are equal to or better than a roughly equivalent Apple laptop both in quality and technology.

The Envy 13--which is HP's entry into the luxury laptop category--falls into the better-than-Apple-laptop-technology category, in my opinion. The luxury Adamo line from Dell is also making a play to, at the very least, achieve parity with Apple's MacBook line.

Again, this is an opinion, not a be-all, end-all verdict on the fate of Apple. And not a review per se that gets into benchmarks. I'm just looking at the raw technology.

Opinion pieces invariably elicit strong counter arguments--not to mention strong opinions (or invective). Especially when Apple is involved.

Third-quarter sales of servers across the globe showed a 17.3 percent decline from the same quarter in 2008, sagging to $10.4 billion, according to IDC's Worldwide Quarterly Server Tracker.

But server shipments improved, falling only 17.9 percent for the quarter, compared with 30.1 percent in the second quarter, noted the IDC report released Wednesday. Even more promising, shipments grew at a healthy 12.4 percent over the second quarter, the market's largest sequential quarterly gain since 2005.

All three server segments tracked by IDC--volume, midrange enterprise, and high-end enterprise--saw lower third-quarter sales compared with the same quarter last year. Revenue for midrange enterprise servers fell 23.4 percent, while sales of high-end enterprise servers dropped 19.3 percent.

But revenue for volume servers, the lower end of the market, improved over the second quarter and experienced their lowest drop since the third quarter of 2008.

"The worldwide server market exceeded expectations in the third quarter with improving x86 server demand leading the way, which was driven in part by the infrastructure refresh momentum that is building in many geographies," said Matt Eastwood, IDC's group vice president of Enterprise Platforms, in a statement. "In fact, x86 server revenues experienced their largest sequential quarterly revenue increase in nearly five years."

(Credit: IDC)

Among the major players in the server industry, IBM and Hewlett-Packard vied for first place in both sales and market share with a statistical tie. Big Blue took a 31.8 percent slice of the market, with a 12.9 percent drop in third-quarter sales to $3.3 billion. HP grabbed a 30.9 market share as its revenues fell 16.8 percent to $3.2 billion.

Third-place Dell saw its sales decline only 6.8 percent to $1.4 billion, helping it capture a 13.5 percent share of the market.

With its future cloudy, pending regulatory approval of its takeover by Oracle, Sun Microsystems suffered a 35 percent drop in third-quarter sales to $778 million. Reports have surfaced that IBM and HP, among others, have taken advantage of the uncertainty surrounding Sun to lure over several of its customers.

Bringing up the rear of the top five was Fujitsu, which saw an 8.2 percent drop in sales to $594 million, carving out a 5.7 percent slice of the market, an improvement over its position from last year's third quarter.

Though optimistic that the market will continue to improve in the fourth quarter and beyond, IDC is still waiting to see how the recovery plays out.

"IDC believes that platform migration is once again gaining steam in the market and the post-recession server deployment patterns will establish the technology agenda in the datacenter for the next business cycle," said Eastwood. "For server vendors, after five quarters of market contraction, the next few quarters will be critical to determining the technology platform winners and losers in the years ahead."

All top five server vendors globally saw declines in revenue and shipment in the third quarter of 2009, with Sun Microsystems registering the biggest fall, according to the latest figures from Gartner.

In a report released Monday, the research firm noted that Sun saw its server revenue drop 32 percent and unit shipments dip 38 percent in the third quarter, compared to the same period last year.

IBM experienced a 12 percent decline in revenue growth, though it clocked the highest revenue in the market for the quarter at $3.4 billion. Hewlett-Packard and Fujitsu saw their revenue decline 15 percent and nearly 11 percent, respectively. Dell was the only vendor with a single-digit revenue decline (5 percent) among the top 5 vendors, Gartner said.

Read more of "Sun sets lowest in server market at ZDNet Asia.

Intel is set to announce the biggest makeover for its Atom processor since it was introduced back in the spring of 2008. And PC makers are ready with new Netbook models, some due before the mammoth Consumer Electronics Show in January.

HP has stopped selling preconfigured Mini 5101 Netbook models directly as it readies models with the new Atom processor.

(Credit: Hewlett-Packard)

Netbooks--tiny laptops used for Web surfing and light production tasks--have gained in popularity as a cheap alternative to a laptop. They can be had for as little as $250--or under $100 when bought as part of a two-year contract at phone carriers such as a Verizon.

Inside new Netbooks will beat Intel's latest "Pine Trail" Atom processor technology. This watershed design will squeeze the graphics function--previously on a separate chip--into the central processing unit, or CPU, a first for Intel. And what does that mean to consumers? "Better battery life. But performance more than anything," Intel executive vice president Sean Maloney said in a recent CNET interview.

Evidence of a rejiggered Netbook lineup can already seen at Hewlett-Packard, which has stopped selling preconfigured models of its well-received Mini 5101 directly from the HP Web site in preparation for new models to come, according to the company.

And Dell is on board too. "You can expect that Dell will be offering products based on Intel's next-gen Atom platform, aka Pine Trail," said a Dell spokesperson Monday. All major vendors currently offering Netbooks--such as Acer, Asus, Toshiba, and MSI--are also expected to refresh their lineups.

Intel, which is already on the record saying that the Pine Trail Atom is shipping this quarter, has made integration one its biggest themes in 2010 and beyond. Its Arrandale Core i series of processors for mainstream laptops, due by early next year, will also combine the graphics chip (GPU) with the CPU. And future generations of the Atom processor will be even more highly integrated.

One of the first new Pine Trail Atom processors expected to appear is a 1.66GHz version (rumored to be dubbed the N450). After this, a faster 1.83GHz version, the N470, is due.

Updated at 8:00 p.m. PST: Pine Trail is the name of the technology platform; Pineview is the name of the new Atom processor.

I'm going to break from the well-established tradition of comparing Netbooks to notebooks. This time my yardstick is going to be the smartphone. And no better yardstick than the Apple iPhone.

Verizon is selling Netbooks as kind of an upscale smartphone

(Credit: Verizon)

This post updates a year-old piece (which, by the way, at least one writer took exception to).

As the holiday-shopping season approaches, many consumers face an ostensible choice between an inexpensive Netbook or more expensive notebook. I personally face that choice (or, at least, I thought I did).

Let me state up front that though I have used Netbooks on a temporary basis, I have never owned one.

I (now) believe that Netbook comparisons to mainstream laptops (which will always disappoint because Netbooks are slower, screens smaller, keyboards more cramped--and this list of comparative shortcomings is long) is really the wrong way to look at it. Let me illustrate.

I recently interviewed the chief technology officer for a large school district in Louisiana that had purchased a lot of Netbooks. And I asked what I thought was the most pertinent question: weren't performance and screen size a concern? She quickly pointed out that my perspective was all wrong.

In short, students in K through 12 are accustomed to iPhone-size screens and performance. So moving to a Netbook is a big step up. From this perspective, the screens are large, the keyboards expansive, and the performance more than adequate.

This suddenly made a lot of sense to me because of my personal experience. Take the iPhone 3GS (or Motorola Droid or BlackBerry Storm, take your pick ). To state the obvious, in many respects, this is a personal computer platform for e-mail, texting, Web surfing, music, navigation, YouTube, and the list goes on.

In other words, the iPhone is for consuming data and media as well as light production. Like the Netbook. But the Netbook, obviously, takes this to the next level. It adds a keyboard and a larger screen, which also makes it potentially a better production platform. So, it's an iPhone Plus, if you will.

And here's the real proof in the pudding. Where do you see Netbooks being sold these days (think Nokia Booklet)? At phone carriers, like Verizon. The last time I visited a Verizon store, it had 3G Netbooks prominently displayed right next to the Motorola Droid.

The point seems obvious to me now. Want to be more productive? Step up to a Netbook. And this follows the same logic of the CTO at the Louisiana school district. And upcoming tablets and media pads from Apple and others will also be marketed as a high-end iPhone-like device, in my opinion.

So, in the next month or so when I try to sort out which Netbook to buy (This CNET review says the HP Mini 5101 is one of the best Netbooks on the market now), I'll be shopping for an upscale smartphone not a stripped-down notebook.

NOTE: I'm not suggesting that anyone replace their iPhone with a Netbook. My point is that a Netbook can be used as an inexpensive adjunct to an iPhone or Droid for people who need to be more productive than an iPhone (or Droid) would allow.

On the heels of announcing its acquisition of 3Com, Hewlett-Packard also gave a sneak peek at its fourth-quarter earnings.

Though not scheduled to officially announce earnings until November 23, HP said Wednesday it expects to report revenue of $30.8 billion for the quarter on earnings of 99 cents per share. (Excluding one-time charges, it would have earned $1.14 per share.) While revenue was down 8 percent compared to the same quarter a year ago, earnings were up from 84 cents per share in the fourth quarter of 2008.

Analysts were expecting earnings of $1.12 per share and revenue of $29.8 billion.

"Solid execution drove exceptional performance for HP this quarter, fueled by significant growth in China," HP Chairman and CEO Mark Hurd said in a statement Wednesday. "We are delivering on our strategy and are well positioned going into 2010."

The company also raised its outlook for 2010. For the first quarter, HP is estimating $29.6 to $29.9 billion in revenue, and earnings between $1.03 and $1.05 per share excluding 13 cents per share of after-tax costs and charges related to restructuring and acquisitions.

Hewlett-Packard said Wednesday it plans to acquire 3Com, maker of network switching and routing products.

The deal is valued at $2.7 billion, or $7.90 per share. HP says the purchase is intended to boost its networking business, particularly in China, where most of 3Com's business is focused.

"By combining HP ProCurve offerings with 3Com's extensive set of solutions, we will enable customers to build a next-generation network infrastructure that supports customer needs from the edge of the network to the heart of the data center," Dave Donatelli, executive vice president and general manager of HP's Enterprise Servers and Networking business said in a statement.

3Com President and COO Ron Sege said he hoped that combining with HP's scale and large sales organization would allow him to get his products to more of the market quicker.

"I want to be able to grow faster...now we're going to have it," he said.

In addition to focusing on different geographic regions--half of 3Com's revenues last year came from its China operations--the two companies have little overlap in terms of products, which should make the integration of the two businesses simpler, Marius Haas, HP ProCurve Networking senior vice president and general manager, said Wednesday during a Webcast.

HP CEO Mark Hurd discusses his ambition to have a full 'stack' of IT technology at a Gartner conference in October.

(Credit: Stephen Shankland/CNET)

The 3Com deal is the most recent in a string of enterprise-related acquisitions HP has made in the past year, including most recently file serving software maker Ibrix. HP wants to be a leader in providing customers with an integrated stack of computing technology ranging from servers and storage at the foundation all the way up to services, Chairman and CEO Mark Hurd said at a Gartner conference in October. But to be competitive these days, a company has to fully commit to each element of the stack.

"You can't be in any one of them as a hobby," he said. "Compared to any competitor, you have to bring a combination of low cost and total cost of ownership, supported by innovation."

The 3Com buy should position HP in position to compete better with Cisco, the largest presence in the networking and routing market. In response to 3Com's acquisition by HP, Cisco released this statement: "While Cisco has a healthy respect for all of our competitors, acquisitions in our industry only validate the fact that networking is becoming the platform for all forms of communications and IT. As the leader in the networking market, Cisco is very confident in our business strategy, commitment to product innovation and ability to provide strategic business value to our customers in a highly competitive marketplace."

The 3Com deal is expected to close in the first half of 2010. HP stock barely registered the news, inching up 0.08 percent to $50 in after-hours trading Wednesday. 3Com's stock rose 5.18 percent to $5.69.

CNET News' Stephen Shankland contributed to this report.

This post was last updated at 3:40 p.m. PT with comments from 3Com and HP.

Microsoft released on Thursday a new position paper, "Privacy in the Cloud Computing Era: A Microsoft Perspective," that includes information about the remote storage and processing of personal information.

Privacy and security concerns continue to be a primary argument that cloud naysayers use against storing data and applications on the Internet. Big IT vendors and service providers like Microsoft and Hewlett-Packard will sooner or later be forced to take the cloud seriously or risk missing out on the whole next wave of IT consumption. And their large enterprise customers will expect them to offer cloud services with the appropriate levels of privacy and security measures in line with their business needs.

The interesting thing about this paper is that Microsoft takes surprisingly minimal responsibility for the data it will manage: