McDowell Sees Increasing Interest In Linux-Based HP Systems

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Specifically, HP Senior Vice President Mary McDowell, who runs the company's industry-standard server unit, said that since the HP-Compaq merger she has seen increasing interest among financial services clients in the Linux server space.

McDowell traveled to New York last week to meet with several clients in the financial services space, saying she has found increasing interest in the Linux platform on HP's product line. "We've had some Linux wins on the ProLiant server," McDowell said.

Specifically, she pointed to a deal with Reuters to build a solution for Reuters Market Data Systems available on Linux- and Intel-based servers, and a cooperation agreement with Oracle and Red Hat on extending Linux technology into enterprise systems as important strides.

In addition, McDowell said, her strategy will also focus on a continued aggressive HP push into the blade server segment, consolidating two RISC-server lines into one server strategy based on Intel technology, and continued "transition assurance" for partners and customers.

Such strides as the Linux win could help HP in competitive situations against Sun and Dell, which have been grappling with growing their businesses profitably in the low end and high end of the market, respectively.

As to other concerns, McDowell said HP's Intel-based server group has gotten a handle on its inventory and processes, as well as planned head count reductions, on its way toward integrating operations.

"We've got our cycle time down to a week," McDowell said, referring to inventory improvements.

"Requests have tapered off dramatically," said Robert Gregory, president of Ocean State Computers, a Providence, R.I.-based HP solution provider. "It's not that [Linux isn't viable; I'm sure it can be." But functionality available for clients including jewelry manufacturers, for example, isn't as mature as previous branded versions of Linux they had used in the past, he said.

As far as the HP-Compaq corporate and product integration, Gregory pointed to another, perhaps more immediate, competitor to HP than the brand-name vendors on McDowell's radar: white-box sales.

Gregory noted that one client of his, with an installed base of HP systems, was recently frustrated when he attempted to upgrade and was told the product line was being moved over to Compaq-branded systems.

"After I told this gentleman the only product available was Compaq, he said, 'Screw together a couple of white boxes, and give us a month or two to test them,' " Gregory said. "This same company probably has $1 million to $2 million invested in HP, including some midrange systems. Now he has some [HP Netservers that are three years old, and he can't even get memory for them to upgrade."

With a new HP challenge of selling HP equipment to former HP customers, and Compaq equipment to former Compaq customers, he said, it's almost resembles a baseball rivalry. "It's like that Yankees-Red Sox love-hate [rivalry," Gregory said.

McDowell hopes that, with the merger in the past, she can take the ball, stand on the mound and start throwing strikes against the competitors.

"Before, we just had to tell people, 'Bear with us,' " McDowell said during her road trip through New York, which came on the heels of other customer and partner tours in Europe and Asia.