Business Tech

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:

"I don't think John McCain could run a major corporation. I don't think Barack Obama could run a major corporation. I don't think Joe Biden could, either. But it is not the same as being the president or vice president of the United States. It is a fallacy to suggest that the country is like a company. To run a business, you have to have a lifetime of experience in business, but that's not what Sarah Palin, John McCain, Barack Obama or Joe Biden are doing."
- Former Hewlett-Packard CEO Carly Fiorina

(Credit: AllThingsDigital)

Her dreams of heading up the World Bank dashed, former Hewlett-Packard Chief Executive Carly Fiorina, the architect of one of the worst tech mergers in history, has turned her attention to the U.S. Senate.

After months of speculation, Fiorina on Wednesday officially announced her candidacy. She'll run as a Republican against Sen. Barbara Boxer (D-Calif.). Of course to do that, she must first win the Republican primary. Fiorina broke the news in an op-ed in the Orange County Register.

"Admittedly, I have not always been engaged in the electoral process, and I should have been," she wrote. "For many years I felt disconnected from the decisions made in Washington and, to be honest, really didn't think my vote mattered because I didn't have a direct line of sight from my vote to a result. I realize that thinking was wrong. As I grew throughout my career, beginning as a secretary and eventually becoming a CEO, I saw how government impacted business. I learned more as a member of advisory boards at the State Department, the Pentagon and the CIA. I now understand, in a very real way, that the decisions made by the Senate impact every family and every business, of any size, in America. This is what motivates me to run for the U.S. Senate. And so today I am announcing my candidacy to serve the people of California as your next U.S. senator. ... Together we can turn things around."

Together we can turn things around? Not if Fiorina's performance at HP is any indication. Before she was forced out of the company by its board of directors, she was so at odds with the uniquely Californian "HP Way" that her corner office could have been powered solely by Bill Hewlett spinning in his grave.

UPDATE: Here's another Fiorina op-ed (PDF) from earlier this year in which she discusses executive pay. Unsurprisingly, she is against President Obama's efforts to restore "common sense" to CEO compensation. And why wouldn't she be? After all she walked away from HP with a $21 million severance package ...

Story Copyright (c) 2009 AllThingsD. All rights reserved.

Windows 7 has spawned a new breed of inexpensive laptops at retailers like Best Buy and Frys.

At many stores on Thursday, Best Buy refreshed almost its entire stock of laptops: all running Windows 7 and all sporting new model numbers. Frys--a megastore electronics retailer with locations throughout California, Arizona, and Texas--also refreshed many of its laptops with new Windows 7 models.

One of the most inexpensive Windows 7 arrivals is the Gateway model EC1410U. This tiny laptop is distinctly Netbook-like in appearance but uses a more powerful Celeron M ULV 743 processor (1.3GHz, 1MB cache) than the Atom-chip fare found in Netbooks. In addition to the Windows 7 Home Premium Edition 64-bit version, other features include 2GB of memory and a 250GB hard disk drive.

Small Gateway laptop comes in a Netbook-like package but uses a more powerful Celeron processor than the Atom chip found in Netbooks--and it's cheap at $399

(Credit: Best Buy)

Many seductive Windows 7 newcomers are categorized as "ultrathins." These slim designs are typically discernibly bigger than Netbooks (though, as evidenced by the Gateway above, it's now always clear-cut) and pack more processor horsepower. The Toshiba Satellite T-135 (model: T135-S1309), which falls into this category, is priced at $549 at Best Buy and comes with Windows 7 Home Premium Edition 32-bit operating system, a 13.3-inch display, a dual-core power-efficient Pentium processor, 3GB of memory, a 320GB hard disk drive (5400RPM), and built-in Web cam.

The HP dm3 (model: dm3-1035dx), also an ultrathin and also priced at $549, packs 3GB of memory ... Read more

ORLANDO, Fla.--Cloud computing? It's got its place, but apparently not one very close to the heart of Hewlett-Packard Chief Executive Mark Hurd today.

At the Gartner Symposium here, Hurd said cloud computing has promise but that he and customers he speaks to are leery of moving important applications to another company's infrastructure outside the company's own firewall.

"I think it's a very attractive model, but there will be challenges," Hurd said. "At the end of the day, if you tell a CEO, 'Put our e-mail in the cloud,' a certain amount of CEOs will tell you not (to). If (HP Chief Information Officer Randy) Mott told me, 'Put the general ledger up in cloud,' I'd say go back to work, we're not doing that."

The cloud is real for many consumer services, he said. So why isn't it suitable for HP's core financial records stored in the general ledger? Security, for one thing.

"We get about 1,000 hacks a day. They're more sophisticated every month," Hurd said. "Security and reliability is a huge thing. It's unlikely we'd put anything outside the firewall that's material in nature that we couldn't 100 percent secure."

HP CEO Mark Hurd explains process re-engineering.

(Credit: Stephen Shankland/CNET)

Hurd also said cloud computing has a branding issue among CEOs he speaks to. In one gathering he was doing fine until he raised the issue.

"I got a lot of boos after that...From a nontechnical CEO perspective, 'cloud computing' does not sound very clear to them," he said. The message he gets from those CEOs: "If this cloud computing is so cool, try to break this down into simple clear services that help my business be a better business."

Moving beyond services
In an onstage interview, Hurd also described HP's overall strategy, starting with building blocks of servers, PCs, networking equipment, and storage at the foundation, working up through software and putting services at the top.

Well, at the top for now. HP is headed for another layer: specific services packaged for particular customer segments, or "verticals" in industry parlance.

"The natural outgrowth for us will be more focus for us on vertical solutions," he said. HP won't get into practices for human resources or executive compensation, but will work in areas in which it can extend its computing technology ingredients.

Hurd said that spanning this range of products and services means that scale matters, for example in bargaining with component suppliers. Here, he dinged competitor IBM for selling its PC business to Lenovo, though without mentioning Big Blue by name.

"When a company would sell off its PC business, for example, you would have a problem because you would no longer be as big a customer to all those people who supply products to that supply chain," Hurd said.

He also took a potshot when asked about how HP's strategy differs from IBM's.

"I don't follow them very closely," he wisecracked. "It sounds like they're trying to chase us."

Beefing up sales
Gartner analyst Donna Scott said big customers find HP easy to deal with, but for others, the company is fragmented.

Hurd acknowledged there are problems, but said HP is working on them.

"We have a strategy to sell more. If somebody is interested in buying more, our strategies are aligned," he deadpanned.

In particular, when it comes to revenue growth, HP is aiming at smaller companies, he said. At present 70 percent of spending on IT comes from HP's top 2,000 biggest accounts.

Hurd pointed to an emphasis on sales as one area where he's trying to shift HP's culture.

"(Company co-founder David) Packard used to say, 'If we build great products customers will find them,'" Hurd said. "We actually want to sell them too."

Revamping HP's own IT
Hewlett-Packard has focused on cutting costs of its own computing infrastructure. In 2004, the year before Hurd took over as CEO, "We had $79 billion in revenue. We made $3.5 billion (in net income). We spent $75.5 billion." So, he asked the company's staff, "What do you spend it on?"

IT was a big part of it, accounting for $4.2 billion. Of that 82 percent was just to keep things running.

"One of our big spends was IT. We had more IT professionals in the company than we had salespeople," he said.

"We had IT spread out. Everybody had a little bit of ownership," Hurd said. There were 87 data centers, 6,000 applications, 19,000 people, 24,000 servers, 20 petabytes of data stored at 700 data marts.

The company "flipped the model," cutting expenses and redirecting funds to the future instead. "Our spend is down 40 percent and our innovation is up 2X in dollars."

It was painful and HP made mistakes on the way, but it was a personal priority for Hurd.

"I get a lot of CIOs who show me how bad their IT is," Hurd said. When he sees it, "My first reaction is it's because of a bad CEO."

Cages at Best Buy are stocked with new models preloaded with Windows 7: behind bars until October 22.

(Credit: Brooke Crothers)

Best Buy is locked and loaded for the Windows 7 launch.

And I don't use the phrase "locked and loaded" figuratively. "Locked" in that all the new Windows 7 machines are locked down behind cages. And "loaded" in that all the cages are full. (See photos.)

I visited a Best Buy Friday night in Southern California where the cages were loaded exclusively with new models preloaded with Windows 7. And I learned a few odd tidbits from a stoked salesperson who had definitely been drinking the Windows-7-is-totally-awesome Kool-Aid. Let me add that the information was conveyed to me at one store in Southern California and may not necessarily apply to all stores nationwide.

Call it the Netbook halo effect: small and cheap is infectious. A quick peek at the lineups of new laptops slated for the Windows 7 (October 22) roll-out make it clear that the prices of mainstream and higher-end laptops are diving, even as the technology gets better.

"There's a new reality in laptop pricing," said Bob O'Donnell, an analyst at market-researcher IDC. "It's getting harder and harder to sell anything over $800." O'Donnell cited a data point that showed the average selling price of notebooks falling below desktops briefly in retail. "That may have been an anomaly, but the fact that's it's even close is indicative of this phenomenon."

That said, let's start with HP, the world's largest PC supplier. Svelte, well-built business laptops have historically been priced at a premium--starting at more than $1,000. Not anymore. On October 22, HP will begin selling the 13-inch ProBook 5310m that is about 0.9 inches thin, less than four pounds, and clad in an aluminum display enclosure and a magnesium alloy bottom case for $699.

HP ProBook 5310m starts at $699: this class of business laptop used to start at well over $1,000

(Credit: Hewlett-Packard)

That's about $800 less than the HP EliteBook 2530p business notebook series introduced in August of last year (that started at about $1,500). The 5310m is priced at $699 with an Intel Celeron dual-core processor and $899 with Intel Core 2 Duo chip. Both come with the Windows 7 operating system.

That's what I call a sea change in pricing.

But it gets better. Then there's the 4-pound HP Pavilion dm3 notebook that starts at $549 (no, it's not a Netbook) and will likely range up to about $700 in price for a reasonable memory and hard drive configuration. The 13-inch laptop comes with power-efficient Intel Core 2 Duo or AMD Neo dual-core processors and a standard 6-cell battery that delivers--so HP claims--up to 10 hours of battery life.

I was able to play with a dm3 at a function sponsored by Advanced Micro Devices recently in San Francisco. My immediate impression was that this was a light but solid design.

The Apple $999 MacBook is suddenly ... Read more