HP’s Challenges

The Economist writes about HP’s challenges after its disappointing quarterly results:

HP is far from stuck between Dell and IBM, she asserts. Instead, Dell, famous for its supply chain rather than its patents, represents low tech and low cost, while IBM, best known for its armies of technology consultants, peddles high tech and high cost, which leaves only HP to offer high tech and low cost and therefore the best customer experience.

HP is trying to be all things to all kinds of customers, and is leaving more and more of them plain confused. HP dominates in the market for printers, both laser and inkjet, and both for consumers and companies. It is also strong in handheld computers and some other consumer electronics items, such as digital cameras. In desktop personal computers and notebooks, HP runs neck-and-neck with Dell as the world’s biggest supplier.

But in enterprise computing, from storage systems to servers, the picture gets more complicated. [HP CEO Carly] Fiorina’s public-relations minions regularly circulate long and tedious lists of obscure sub-segments of the market in which HP has the largest market sharefault-tolerant systems, external storage systems, tape drives, virtualisation technology and so on. Being big in so many different areas, they argue, means that HP is the leader and vindicates the merger.

The opposite is more likely. HP’s profits disappointed precisely because the jumble of its business units selling to companies made a loss of $208m for the quarter. In each area, it turns out, HP is fighting separate wars against different and fiercely focused competitorsEMC in storage hardware, Veritas in storage software, StorageTek in tape drives, Sun Microsystems in Unix servers, IBM in consulting services, and so on. The only way that HP manages to stay in so many games, at least according to Dell, is by leaving its profit margins on the table for othersand above all for Dell itself.

Will HP go the way of AT&T (from the split point of view)?

Open-Source Data Centre Software

Dann Sheridan writes about the options:

Is it possible that Open Source packages exist which rival what has traditionally been the highly proprietary arena of data center operations? The “standard” operations platforms for data center traditionally includes something like Remedy, HP Openview, CiscoWorks, and a handful of other tools which need to be integrated in order to work together. There is OpenNMS which provides service polling, performance data collections, and event management and notifications. What are missing from this feature set are event correlation, escalation, process definition, and some reporting. Double Choco Latte, or DCL, provides escalation, process definition, and some reporting. The missing piece is a correlation engine. Qualys provides an Open Source correlation engine for IDS. I wonder if this could be customized to correlate general network events. What has been missing from all operations platforms is a predictive failure engine which analyses a complete history of events for a given device or set of devices and predicts the next failure. I know no Open Source engines like this. Finally, a robust reporting interface is needed which will need to be built from scratch once integration of the packages has been designed. I know from experience that the traditional approach costs between $750K and $1MM to get up and running and approximately $150K to maintain annual software licenses and another $80K to $100K maintenance labor and ongoing development. At the very least, Open Source would save you the $150K in annual software maintenance.

WiFi+Cellular Access

Wi-Fi Networking News discusses the combined WiFi-cellular access market:

For cellular operators without their own Wi-Fi plays, a combined device might not pay off and could cannibalize their own cellular data networks. Technology Review Magazine suggests that cellular operators may view the combined devices as sort of a tease, to get users hooked on the idea of higher-speed wireless data just in time for them to start unrolling more ubiquitous and higher-speed cellular data offerings.

The catch will always be cost so theres a chance the tease may backfire. If users get hooked on Wi-Fi networks that are free to access, they may decide to go out of their way to find a free hotspot rather than pay for the cellular access which at least these days is far more expensive. However, its likely that a certain market segment will pay for the convenience of having the higher speed wireless data from the cellular operators in more locations.

I have been using WiFi on the notebook as I travel over the past week or so, and it is amazing. (In India, one does not have too many hotspots.) I think a combined service would be a boon for road warriors from the data access point of view – there just aren’t WiFi hotspots everywhere. And the service does not have to be free!

Advice for Google

Post Google’s $85/share IPO, Dan Gillmor offers some advice on the business, technology, attitude and trust.

Google is a media company more than anything else, a company that sells advertising space on its own site and on its partners’ (and customers’) sites. The business, built on a sturdy foundation of delivering targeted ads based on people’s actual interests, has legs.

It’s also an obvious business for competitors. If Microsoft and Yahoo weren’t tough enough opponents, consider the growing number of micro-advertising services that are springing up to serve niche markets. In the Weblog world, for example, a small company called Blogads has been effective for advertisers who want to target specific online journals. Google’s ad products are fine, but they’re hardly a monopoly.

Google needs to become much more of a platform, not just a collection of services. The company has made some visible steps in that direction, but the strategy is still quite hazy, perhaps deliberately.

Some observers have speculated that Google is creating what amounts to an Internet operating system, an environment people and businesses could use to effectively replace today’s desktop computing services. That’s a big task, but not impossible.

If that is the aim, and even if it isn’t, Google should work harder to expand and open up its “applications programming interfaces” — the instructions it offers to programmers on how to use Google’s searches to create other kinds of services. Google has a developer ecosystem of sorts, but it’s not nearly vibrant enough.

Bob Cringely adds:

Whatever the company does will be incredibly technical because that’s their greatest strength. Remember, Google’s CEO is Eric Schmidt, who used to be Chief Scientist at Sun Microsystems, so technology doesn’t scare these guys. In fact, they prefer it because machines are more predictable than people, as Schmidt learned when he tried to turn around Novell. THAT’s why Google is cut from whole cloth with every new hire chosen to be of the body.

The key to making money in search is to get between people and what they are searching for, and that’s where Google is on a collision course not only with Microsoft and Yahoo, but also with Amazon and eBay. Amazon is vulnerable to the Googlization of all the millions of retailers who aren’t running Amazon storefronts just as eBay is vulnerable to the Googlization of auctions where localization, pricing, and seller fees can all be improved.

But wait, there’s more! What about GoogleMedia? Find all the pictures, video, and music, then create a marketplace for it. I’m not just talking about taking on iTunes, though that is a logical possibility. I’m talking about new ways of buying and selling all types of intellectual property. And given this week’s court decision against the movie studios and in favor of Grokster et al, that could even come to include GoogleMovies. But any system for buying pictures to put in your term paper also requires a means to pay for it. So expect either a GooglePal or more likely an alliance with some established financial institution already convinced that PayPal must die.

TECH TALK: From Employee to Entrepreneur: The Decision

I recently met a friend I have known for a long time. We have known each other enough for me to discuss about his work and career. While the work he was doing continues to be interesting, I sensed a restlessness. There was a feeling that perhaps he should look at alternatives. Perhaps, a career at another company. I suggested that he should look at doing something on his own being an entrepreneur. He had obviously thought about it, but something was holding him back. Having spent over a decade working for large companies, that path was easy to follow. It was a predictable future. Thinking about a start-up either joining one or creating one was a path that was different and unknown. Perhaps, the security of a job outweighed the risks of entrepreneurship.

I have been just the opposite in my career. Even when I started working at NYNEX (now part of Verizon) in the US in 1989 after my Masters from Columbia University, I was clear that in the very near future, I would start my own company in India. That was the advice given by my father when I left India for further studies in the US. If he could come back to India in the mid-1960s, I had better do so now! Because of family compulsions, his entrepreneurial career began a little later after he returned from the US. I need not wait.

And so, after just over 2 years of working, I left NYNEX, returned to India, and launched out as an entrepreneur. So, this is now my thirteenth year. It has been a mixed scorecard. But I could not think of living life any other way. Give me the ups and downs of the entrepreneurial journey with its mountains beyond mountains than the security of employment.

Yet, I understand that not every one of us can become an entrepreneur. But there are many who think about it. Just like those abroad who consider returning to India, contemplating entrepreneurship is also like the N+1 syndrome. It keeps getting postponed to the next year and that next year rarely comes. As time goes on, it keeps getting harder, too.

As I talked to my friend, I realised that it wasn’t an easy decision at all. The transition from an employee to entrepreneur is one of the toughest decisions anyone will face. What should I do? How will I start? Where will I raise the capital? What if things don’t work? What will be the impact on my family? Is this the right time? A million questions keep popping up. While the answer for each question requires personal introspection and probing deep inside oneself, there are some common facets of this transition which can be abstracted out.

Just like driving down route 1 along the California coast, the entrepreneurial journey has its mix of tricky turns and magical moments. The road to entrepreneurship has more thorns than roses, but it is an expedition well worth taking at least once in a lifetime. This is what I told my friend and this is what I’d like to share with you in this week’s column.

Tomorrow: A Roadmap