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Innovation at Hewlett Tries to Evade the Ax
From: Dave Farber <dave () farber net>
Date: Mon, 05 May 2003 06:46:24 -0400
Innovation at Hewlett Tries to Evade the Ax May 5, 2003 By JOHN MARKOFF KEYSTONE, Colo., April 29 - The gathering here of 400 of Hewlett-Packard's top scientists and engineers was intended to reassure them that the company was determined not to depart from its historic focus on research and development. "HP Invent is not just an advertising logo," Carleton S. Fiorina, Hewlett-Packard's chief executive, told the audience in her Monday keynote address. "It is a fundamental representation of our past, present and future." A year after orchestrating a controversial takeover of Compaq Computer, Ms. Fiorina likes to boast that the company is one year and a half-billion dollars ahead of schedule in combining the two operations. And as she framed it here, a leaner and meaner research and development operation will not just preserve the Hewlett-Packard brand, it will also help extend it. But that $3 billion cost-cutting effort, crucial as it is to the company's success, also poses a serious challenge to its ability to innovate in the fast-consolidating computer industry, analysts say. Indeed, as John Grebenkemper, a veteran engineer who came to Hewlett by way of Compaq and Tandem Computer, rehearsed his presentation for the research group, he could not help quietly admitting some bad news to another manager. "It's been a very hard week for me," he said. "I had to lay off 40 percent of my group." And one engineer received lively applause when he told Ms. Fiorina during a question-and-answer session that "the thing that gets hit first" in the rush to meet the company's quarterly financial targets "are those new ideas." The company believes it still has plenty of big ones. As an internal showcase for Hewlett's hot new technologies, the conference was a winner. On display was everything from just-over-the-horizon three-dimensional printers to more futuristic devices, like electron beams that could one day pave the way for 10 gigabit memory chips 20 times more capacious than the current generation. Many of those who attended said it was a promising first effort toward what Ms. Fiorina considers crucial: exploiting cooperation among engineers and scientists to restore the company's ability to compete. Hewlett's overall research and development efforts are now being guided by Shane V. Robison, a veteran of Compaq and Apple Computer. He has indicated that the company will concentrate its research in areas like software for corporate computing centers, computer security and privacy, along with designing new mobile devices. But for many outside experts on corporate research it is still an open question whether Hewlett can rekindle the synergies it once enjoyed in computing and materials science research before 1999, when it spun off Agilent, its scientific equipment and medical instrument business. "They took away what was really powerful about HP Labs," said Robert Buderi, editor of Technology Review magazine and an expert on corporate research laboratories. "They haven't gotten their edge back." Mr. Buderi stressed that Hewlett-Packard was still very strong in several areas of promising research. And, Mr. Robison said, that is the way the company wants it to be. In the old days, Mr. Robison explained, big companies like I.B.M. and AT&T were able to support research into a vast array of subjects. But "given the pace of change and the amount of change, that's not possible," he said. "I want to reach deep in the areas we care about." At the same time, Hewlett-Packard must find a way to change its product development culture to enable it to move more quickly and respond more nimbly. It is a problem that Hewlett-Packard acknowledges has plagued it in the past. "We certainly have the technology," said Thomas J. Perkins, a Hewlett director who heads the new technology subcommittee of the company's board. "But sometimes we haven't capitalized as quickly as we should have." Mr. Perkins, a founder of Kleiner, Perkins, Caufield & Byers, the Silicon Valley venture capital firm, originally helped start Hewlett's computer business during the 1960's. A member of the Compaq Computer board of directors, he returned to Hewlett-Packard as a director as a result of the merger. Mr. Perkins said he agreed to stay on as a board member after meeting Ms. Fiorina for dinner before the merger was announced and persuading her to create the technology subcommittee. Hewlett is the first company of any size to create such a group, he said, and Mr. Perkins argued that it would help the company make smarter and more rapid technology decisions. Whether Ms. Fiorina and Mr. Robison will be able to move technologies from the lab to the market more quickly is still to be proven. But in executing the combination of Hewlett and Compaq more effectively than many analysts had expected, Ms. Fiorina is making the case that she can also bring a new level of decisiveness to a company that has lacked a strong sales and marketing orientation. Regis McKenna, the Silicon Valley marketing and public relations guru, once said that if Hewlett-Packard started a sushi restaurant it would hang a sign in front that read, "Cold Dead Fish." Under Ms. Fiorina that is no longer true. She is at the center of a whirlwind of marketing and sales activities, frequently visiting major corporate customers herself. Still, the computer industry is barely growing, and Hewlett's ability to outdistance its rivals will depend on decisions it makes about creating new markets. This quandary is exemplified by what Hewlett engineers are calling the Bunny Burner project. Today, specialized stereo lithographic printers are able to create three-dimensional objects directly from drawing on a computer screen, but they cost tens of thousands of dollars. A group of Hewlett-Packard engineers in Corvallis, Ore., has built a prototype of a printer that would sell for as little as $1,000 and that might one day permit ordinary consumers to translate their own computer designs directly into plastic objects. But a more ambitious project to build a high-cost stereo lithographic printer, code-named Zorro, has been canceled, and the low-cost project may be vulnerable to the same pressures. "It's not clear that 3-D printing has the support needed to solve all of our problems," one of the researchers here said. If Hewlett does pursue the Bunny Burner it would be a striking example of the "high-tech, low-cost" strategy that Ms. Fiorina described to the company's researchers. She said that I.B.M. had a "high-tech, high-cost" strategy, while Dell Computer had a "low-cost, low-tech" approach. Her company's method, she said, will be to outwit its competitors with advanced technologies sold at consumer prices. It is a strategy the company is hoping to extend to corporate computing, where it plans to challenge I.B.M., Microsoft and Sun Microsystems - all of them racing to persuade large companies to deploy software designed to combine a range of business applications. On May 6, Hewlett plans to roll out its own corporate computing strategy, which will include initiatives like the one sketched here by Chandrakant Patel, a mechanical engineer in the company's labs near its headquarters in Palo Alto, Calif. Mr. Patel showed how it was possible to lower the annual electricity budget for cooling a larger corporate data center - which can run $4 million or more - by modeling the flow of air much as aerodynamics engineers model airflow over the wing of an aircraft. The market for corporate data management software is one where Hewlett-Packard is now likely to compete directly with Microsoft, which it has often avoided confronting in the past. "I've warned Gates and Ballmer that we consider management of the data center to be our territory," Mr. Robison said, speaking of Bill Gates, Microsoft's chairman, and Steven A. Ballmer, its chief executive. Another area where Microsoft and Hewlett may soon clash is at the opposite end of the computing spectrum, in the market for handheld gadgets. Currently Hewlett sells its popular iPaq personal digital assistant with Microsoft's Windows CE operating system. But Hewlett-Packard has sophisticated efforts under way using the freely shared Linux operating system. Mr. Robison hinted strongly that the company planned to challenge Microsoft's software dominance in a number of consumer electronics markets. If a collision is coming, it appears that the new Hewlett-Packard will be better armed. Many of the researchers here came away from the conference enthusiastic believers in the power of cooperation. Susie Wee, an R&D manager at HP Labs in Palo Alto who is an expert in sending multimedia over wired and wireless networks, said the meeting was a breakthrough for her project. Her presentation allowed her to meet people in many different parts of the company who were interested in sharing work in the field. "H.P. has all the right parts," she said, "but until now we haven't been able to bring them together." http://www.nytimes.com/2003/05/05/technology/05HEWL.html?ex=1053118483&ei=1& en=94725a6ac618a8a6 HOW TO ADVERTISE --------------------------------- For information on advertising in e-mail newsletters or other creative advertising opportunities with The New York Times on the Web, please contact onlinesales () nytimes com or visit our online media kit at http://www.nytimes.com/adinfo For general information about NYTimes.com, write to help () nytimes com. Copyright 2003 The New York Times Company ------ End of Forwarded Message ------------------------------------- You are subscribed as interesting-people () lists elistx com To manage your subscription, go to http://v2.listbox.com/member/?listname=ip Archives at: http://www.interesting-people.org/archives/interesting-people/
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- Innovation at Hewlett Tries to Evade the Ax Dave Farber (May 05)