HP World The unwashed masses had a go at HP this week as customers were allowed to pepper HP executives with numerous questions during an open roundtable session. One of HP's most troubling areas - the shift to Intel's Itanium processor - popped up time and again as cause for concern during the discussion, but worries over product shipments and offshore workers appeared as well.

First off, Interex, the large HP user organization, released data about HP customers' planned moves to the Itanium processor. As most know, HP is phasing out its own PA-RISC processor and the old Compaq/DEC Alpha chip and asking customers to port all of their software over to Intel's 64-bit processor. Thus far, this shift has progressed slowly, with Itanium sales falling well below expectations and with most customers picking up small workstations and low-end servers, as opposed to big iron.

Is the future much brighter? Not necessarily.

After surveying 7,000 HP customers around the globe, Interex found that just 20 per cent of HP's HP-UX customer base plans to move onto Itanium this year. In the next two years, 22 per cent of the customers plan to shift, but after that the picture becomes much more murky. Only nine per cent plan to shift off HP-UX within five years, and a whopping 50 percent of customers have no plans to move to Itanic at all.

This leaves half of HP's high-end customer base looking for a new home either on Linux systems, which HP does sell, or - more likely - on IBM and Sun Microsystems' Unix kit. Sun has already picked up 150 ex-HP users to the tune of $200m, and IBM has steadily gained high-end Unix market share over the past two years.

Tools of the trade

HP's customers are also unhappy about what is going on with the Tru64 and OpenVMS operating systems. HP's decision to kill off Tru64 all together has 53 per cent of its customers saying they are dissatisfied with HP's roadmap for the OS, according to Interex. And, while OpenVMS will survive on Itanium, half of HP's customers have no plans to migrate over to Intel's new chip, leaving room for IBM and Sun to attack again.

In addition, one customer from Northrop Grumman charged that HP is making it tough to move over to Itanium by not working well with software makers, particularly tools vendors.

"The tools vendors are telling me they don't have a strong alliance with HP," she said, during the customer session. "We are not getting good information. We made a commitment to buy Itanium-based workstations because that is where we were being pointed, and now these tools will not be supported on workstation class machines."

One notable tools vendor - Parametric Technology Corp. - pulled back its support for Itanium this year, and the Northrop Grumman customer said at least three other tools vendors, including Synopsys, have reneged on their support as well.

This experience is in stark contrast to what HP's enterprise chief Ann Livermore told ComputerWorld in a recent interview.

"But the thing that we're seeing that we like from an Itanium perspective is that the ISV [independent software vendor] applications and ports are going really well," she said. "Our ISV partners have all believed that the migration has been easier than what we planned."

Livermore denied that there is any need to bring HP-UX onto x86 processors from Intel and AMD even though both companies now support 64-bit extensions on their chips. Rival Sun has been trying to attract HP's Unix customers to shift over to Solaris x86 running on AMD's Opteron chip.

HP has also fallen behind on its plans to upgrade HP-UX, meaning many of the features customers expected now won't arrive for a year or more. This makes the Itanium transition more difficult as 2005 is the main cut-off point for the PA-RISC and Alpha chips.

Away from the Itanium issues, HP's customers also had serious concerns about numerous areas, including the company's support staff and services contracts.

One point of difficulty is the offshoring of HP's call center staff to India. Users complained that they can't understand the Indian workers.

"We do have some issues that we have identified and need to work through," said Bob Floyd, HP's VP in charge of customer services.

He insisted that HP will keep up its offshoring practice as it is a "global company" and is working to improve the accents of the Indian staffers. "We have to continue to work on the language so they can be understood," he said. Being understood does help.

Most of HP's Indian staff handle consumer PC calls, but as HP teaches these workers a Texas twang, it plans to have them handle high-end support issues.

Another customer complained about HP's three-year support services contracts. Unlike some vendors, HP makes customers pay the total price of the contract upfront, if they want any kind of price break for buying three years of support instead of just one. Other vendors allow customers to enjoy a price break and simply pay for one year at a time.

"I will take that back as input," Floyd said. "We'll see what we can do on that."

The Shipping News

But the biggest complaint against HP by far came as a result of its poor shipping practices. Many of these grumbles were covered here, but one user, who did not make that story, stood out.

Bob Lewandowski, of ASAP Software in Illinois, was outraged by HP blaming a difficult SAP supply-chain software rollout for recent financial losses and shipping problems.

"I can't get good delivery dates," he said. "It would help me if you would update channel partners so that we can get realistic delivery times. My guys come back and say, "Well, we can get IBM products but not HP products.'"

"As a shareholder as well as a customer, it's hard for me to say there is a lot of benefit in keeping (customers) as all HP shops. It's hard for me to swallow, as a shareholder, that HP makes us customers pay for a consolidation of SAP that is supposed to save costs."

Rather ironically, HP CEO Carly Fiorina was just bragging about HP's wonderful supply chain expertise back at the company's June meeting with analysts.

"Fiorina said that HP would bring the same focus on execution to selling products and services in this new technology era, as it did with the HP-Compaq merger," according to this report. "In fact, it is the merger that made HP aware that the lessons it learned in streamlining one of the most complex manufacturing, supply chain, and IT operations in the world made it realize it had to change not only what it sells but how it sells. When customers buy into HP's Adaptive Enterprise approach to IT, what they are buying is a piece of that HP merger experience."

After HP lost $400m in revenue from the failed SAP rollout, customers may well move as far away from the HP merger experience as possible.

As RedMonk analyst James Governor puts it, "HP is trying to build an application management business to rival IBMs. What better case study in proving your R/3 and Netweaver capability than a good old dogfood eating session - show everyone how to merge two SAP systems and they will come to you the next time they make a merger or acquisition and want to do the same thing. Who would go to HP now for a large scale SAP integration? The CEO just publicly said HP can't effectively manage such a project."

"There was a time when IBM's sales force had some issues with a Siebel rollout. But the world at large never heard a thing. IBM wasn't about to criticize its most important CRM partner in public. Well HP just did exactly that." ®

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