November 14, 2001 5:25 PM PST

HP tests loyalty with server cancellation

When Hewlett-Packard canceled its venerable 3000 server line Wednesday, it began aggressive programs to keep customers from fleeing the company altogether. But keeping customer loyalty in an environment where some customers feel betrayed will be a challenge for the computing giant.

HP announced its intention to phase out the 3000 line over five years in favor of its HP 9000 Unix servers and its NetServer Windows and Linux servers. HP is offering financing deals, discounts, credits and other incentives to keep HP 3000 customers from moving to servers from other companies.

"In my agency within the U.S. Department of Defense, we make extensive use of HP 3000 systems," said Tim O'Neill, of the U.S. Army's Aberdeen Test Center. "One certainty for our agency is that if they eliminate the 3000, we will then act to eliminate our 9000s as well.

"If HP thinks we will 'migrate' from MPE to HP-UX, they are mistaken," he said, referring to the operating systems associated with the two server lines.

The economic slowdown has spurred layoffs and more layoffs at HP. The company is grappling with its proposed merger with Compaq Computer and is focusing on reclaiming momentum in the Unix server market from Sun Microsystems and IBM.

A letter sent to HP 3000 customers Wednesday described the company's reasons for canceling the server line, introduced in 1972. Chief among them is that software companies and customers are moving to "open" systems such as Unix, Windows and Linux, whose standards make them a larger market than proprietary systems such as the HP 3000.

"We at Hewlett-Packard sincerely thank you for your loyal support of the HP e3000 platform," Winston Prather, general manager of the HP 3000 business, and Jim Murphy, general manager of HP server support, said in the letter. "We are truly committed to continuing to earn your trust and loyalty, and to helping you make a smooth transition to another HP platform."

That sentence in particular didn't sit well with some.

"The loyalty to the HP e3000 that has been so strong for so long has just been repaid by HP by killing off the HP e3000. Who would you trust in the future, especially in the light of all the promises offered such a short time ago?" asked one member of the HP3000-L mailing list.


Gartner analyst Andrew Butler says HP's decision to phase out the 3000 line is a smart one...the time has come to phase it out.

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Not everyone is dissatisfied, though. "The problem with something like an HP 3000, it's like using a Betamax videotape: Sure, it might be better quality than VHS, but no one is going to support it," wrote another who said he'd been using HP 3000 for the last 13 years to run software for an airline. "With an HP 3000, you need to find specialist staff, you need to purchase expensive proprietary software, and you have no choice with hardware."

And then there are those who make a living helping customers move their software and data to new systems. "Our software has been used to move data off the 3000 platform for a long time," said John Murphy of Taurus Software, which saw a spike in business when fears of the Year 2000 problem spurred many to replace older computer systems. HP's cancellation of the 3000 line will likely result in a bigger, if more protracted, increase in business than the Y2K issue, Murphy said.

Some believe HP's decision is reversible, though.

"This is not the first time HP has tried this," said Ron Horner, who administers HP 3000 systems that fulfill orders at J.C. Penney. "Sometime in 1985, I think, they were pushing HP-UX pretty hard. But HP changed their minds, mostly because of customer pressure."

Many HP 3000 loyalists decry the waning sales effort behind the server.

"I don't know if anyone will ever understand HP's self-destructive purge of its sales force in the 1990s. That, and the lack of support from upper management, combined to reduce sales of the 3000," said Stan Sieler of Allegro Consultants, who helped design the system from 1979 to 1983 and whose HP 3000 customers include the telemarketing groups of MicroWarehouse and Tiger Direct.

But the 3000's business importance at HP has been dwindling based on sales and support contract renewals, the company said. "Our installed base has been declining for several years, more so in the last two years," the company said in a statement, while declining to discuss profitability.

Several 3000 users believe there might yet be a future for the MPE operating system, either on HP 3000 hardware or on different systems.

HP has been working to converge the hardware of the 3000 and 9000 line, both of which use the PA-RISC processor, so the hardware underpinnings have a future. But HP is moving its Unix servers to Intel's Itanium chip in the longer run, and the company has ceased its effort to translate the 3000's MPE operating system to Itanium, according to a posting by longtime 3000 employee Jeff Vance.

Releasing MPE as an open-source effort--the collaborative programming method that underlies Linux--might also preserve the operating system.

Sieler believes releasing MPE as open source is the "right thing." Added Horner, "I don't think we can get a reversal," convincing HP to overturn its cancellation decision, "but if we could take it over, that's a different story."

HP is examining what exactly to do with the operating system and is open to several possibilities, said Dave Wilde, research and development manager for the 3000 line. The issue with open source, though, is finding a way to ensure existing HP customers' needs are met, something that open-source software doesn't guarantee.

"Maintaining an operating system in a way that meets customer-support needs for mission-critical operating systems is no small feat," he said. "It's clearly something HP has invested a lot in. We want to make sure that whatever solutions we develop will be good for our customer. It's not clear that open source is good for that. We're open to that discussion."

 

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