What makes Hewlett-Packard stand out from other players in the industry, as a challenger to IBM? It is its market leadership in certain areas (as has IBM in certain areas). Or is it its broadness of product range, its proactive style and its critical mass -- $US42.7 billion in revenue and 123,000 employees.
One observer, a former long-time IBM senior executive, now an HP alliance partner, said he thought HP's only weakness was in services -- that it was so concerned not to step on the territory of its many business partners that the company had deliberately held back the development of this area.
HP disagrees with this and provided me with information about initiatives including alliances in system integration that, it says, show its ongoing commitment. It is the IA-64 joint venture with Intel that, I believe, potentially gives HP an incalculable advantage over other would-be challengers and helps to allow it to now seriously challenge IBM.
In one fell swoop HP gets rid of its cripplingly expensive processor chip activity (IBM's millstone is the PowerPC), while still retaining control, including control over operating system and compiler. That ensures its medium-term system design strategy continues uninterrupted, including its all-important commitment to its users: come 64-bit computing they won't have to recompile.
In a typical "HP-way" style of manoeuvre, HP gave its chip technology and software smarts to the venture and agreed not to own the outcome! IA-64 belongs to Intel. HP gets to use it and buy it, on the same terms as everyone else in the industry. Intel has barely acknowledged this amazing contribution, but HP isn't worried.
Its strategy for 64-bit computing is maintained at a considerable saving.
It is this benevolent approach to business that makes many HP customers and third parties love and admire HP intensely. Surely such goodwill must help HP pass IBM in the competition for number one.
Some HP employees have questioned whether HP is on such a mission. They are far more concerned with beating Compaq -- about to be very much bigger by the acquisition of Digital.
However ComputerWorld archives show that in August 1996, HP CEO Lew Platt asserted that HP would be biggest (not that he mentioned IBM, that wouldn't be the "HP way". At the time Platt also said HP would reach $US40 billion that year. It didn't quite and he's been rather quiet about such goals since. Of course being number one didn't have a time limit.)HP, growing annually at 16 per cent (as it did in 1997), from its current base, and IBM, at 3 per cent, from a base of $US78.5 billion (as it did), means HP could overtake IBM in under six years.