Sailing the Shifting Sands of Silicon

1999-04-12

One of the issues faced by hardware manufacturers is knowing which technologies and markets are a stable enough foundation on which to base a business strategy. Recent reports are an indicator of this, from IBM's report of a $1 billion loss for its PC division, to Compaq's shock earnings announcement today. Stable foundations are elusive, but companies have no choice but to continue their efforts to identify, encourage or even create points of sufficient solidity on which to develop and market their products. Even if some organisations, such as Dell and Gateway, have business models which are demonstrably successful for a while, it is clear that no one company has the monopoly on predicting the future.

One company which may be getting it right is Hewlett Packard. HP has a hard-earned reputation as a provider of quality, technologically sound systems and equipment. Unfortunately, it has also gained a reputation of being a little dull and it has become left behind in the systems race. There are signs that all this may be changing. Last month, HP announced it was spinning off its testing and measurement division. The company is now announcing a range of computers to be targeted at the e-commerce market. The new N-Class servers will run Unix as well as NT, proving the company's strategic commitment to this operating system. Secondly, and perhaps more importantly, the servers are designed to be upgradable to Intel's Merced 64-bit, RISC-based processor, due out next year. Hewlett Packard are not just aligning themselves with Intel's strategy: HP is being instrumental in the development of McKinley, Merced's successor, and are developing a number of key components of the chipset required by McKinley.

This approach is low-risk, considering that other parts of the industry (including Microsoft) are endorsing Intel's 64-bit architecture. At the same time, HP appear to be injecting more pizazz into their product marketing. In doing these things, they are positioning themselves as a major player in the systems battles of the future. Who dares, might just win this time around.

(First published 12 April 1999)