November 14, 2002 2:10 PM PST

Fiorina: Tight budgets an IT reality

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SAN FRANCISCO--Hewlett-Packard CEO Carly Fiorina said Thursday that the current conservative attitude of IT buyers is here to stay.

In a keynote speech here at the OracleWorld trade show--her first public appearance since Monday's resignation of HP President Michael Capellas--Fiorina addressed the two-year market retraction that has beaten down the IT industry.

Businesses, she said, are making tougher demands on computer and software makers to improve the value, extend the lifespan and lower the cost of their products.

"I think this is a permanent set of changes...and it will stay with us even when the economy comes back," Fiorina said. "The next era of IT will not be about the hottest box or the killer app," she added, but about making sure information technology is more flexible to businesses' needs.

In response to these changes, HP is focusing on making its server, storage, network management and consumer products more "modular" in their architecture, so businesses can more easily pick and choose what they need.

The company is also designing its offerings around industry, rather than proprietary, standards, she said. And better security, reliability and interoperability are priorities.

But Fiorina stressed that despite the current economic malaise and the permanent shift to frugality the downturn has brought on, the need for IT among businesses isn't going away.

"The smart application of technology distinguishes the winners from the losers," Fiorina said.

Another development driving the future of the IT industry is the move to so-called utility-based computing, Fiorina said. In that model, companies leave all their computing needs to a third party rather than making huge investments in their own private IT infrastructure. The companies then pay monthly bills for what they use, in the same way they pay for utilities such as electricity or water.

Wind in Larry's sails
Fiorina also highlighted her company's 20-year partnership with Oracle, with whom HP shares some 80,000 customers. The two companies discussed plans this week to bundle Oracle middleware software on HP servers.

Both companies, she said, share a common commitment to designing products for the Linux operating system and Intel's new Itanium 2 chip.

Oracle, a leading maker of database and other business software, said it drew a crowd of 23,000 IT specialists to its annual OracleWorld convention here this week.

Fiorina's keynote was one of a number of speeches delivered by some of the IT industry's top guns. Michael Dell, chief executive of Dell Computer, Paul Otellini, president of Intel, and Michael Ruettger, chairman of EMC, also made appearances earlier in the week.

Oracle CEO Larry Ellison later Thursday plans to address the audience via satellite from New Zealand, where he's competing for the America's Cup. Ellison's team, Oracle BMW Racing, has won each of its last nine races in the premier international sailing competition, placing the team in the Louis Vuitton Cup quarter-finals, Fiorina announced during her keynote.

HP provided the team with much of its computer equipment for the competition, including laptop computers, Fiorina said.

"HP puts the wind in Larry's sails," Fiorina quipped. "If Larry Ellison and his team don't win, it's not because of the technology, it's because of the captain."

Fiorina has her own leadership issues to grapple with. This week Capellas vacated the No. 2 spot at HP, and the company has no plans to hire a new president. Analysts expressed concern that Fiorina may be taking on too much.

Fiorina didn't mention Capellas' departure or whether it would impact HP during her speech.

 

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