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By Tom Steinert-Threlkeld Print this article Print

Online exclusive: Hewlett-Packard Chairman Carly Fiorina did more than take the stage at ITxpo today—she took aim at the competition.

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HP's Corporate Focus

She was similarly disparaging about other rivals, who she said lacked HP's focus on the needs of corporate customers—everything from the desktop to the server, and from the network to the consulting services needed to weave wide varieties of equipment options together.

Even though HP lost ground in the second quarter of this year to IBM, Sun and Dell in the sales of server computers to corporations, Fiorina remained unfazed. She attributed the drop in share to customers examining HP's new product road maps, fresh from the consolidation of HP and Compaq server lines.

In its summary report for the second quarter of this year, Gartner anointed the newly united HP as the world leader in servers, with 30.5 percent of the market. But sales actually fell 9.2 percent from the year-ago quarter, when it was two separate companies. IBM also lost ground, with its share falling from 15.0 percent to 14.5 percent.

By contrast, Sun sales in an overall flat market gained 10.8 percent to 6.5 percent of the market. Dell's unit sales gained 12.9 percent, giving it 18.0 percent of the 1 million servers shipped in the quarter.

In the long run, according to Fiorina, Sun could not keep up with HP by focusing on fast machinery, using a proprietary operating system, Solaris. She said Sun's chief executive, Scott McNealy, was running a "stand-alone hot box company," as was EMC, the storage server market leader. Customers are no longer won over by speed of servers or desktop machines, she said.

"In our judgment, those days are gone forever,'' she said.

McNealy, taking the stage 45 minutes after Fiorina's presentation, seemed unfazed, noting that Sun has gained more share from HP over the last nine months than during any time in its history. He noted that Sun now dominates the market for servers that crunch information 64 bits at a time. HP's play in that arena, based on a joint effort with Intel on a 64-bit processor series called Itanium, in development for roughly seven years, has been slow to get off the ground. Intel's chief executive, Craig Barrett, who followed Fiorina on stage, predicted that sales of Itanium products would pick up in the second half of this year and into next.

After citing enterprise computing as the motive behind the merger of HP and Compaq, Fiorina also decried her main rival in providing consulting services in that field. IBM, whose Global Services unit is the market leader, "has a very different approach," she said.

IBM has its own way of doing business, she said, focused on proprietary services and hardware. Even though HP, too, sells its own systems, the company offers a wider variety of choices, including Unix and Windows systems.

She also said that IBM's acquisition of PricewaterhouseCoopers will not help. HP had considered buying PwC before IBM. "We walked away from the PwC opportunity not once but five times. And wound up buying Compaq instead."

Fiorina, apparently, doesn't seem to worry about antagonizing her rivals. "We are going to go on the offense,'' she said.

This article was originally published on 2002-10-08
Tom was editor-in-chief of Interactive Week, from 1995 to 2000, leading a team that created the Internet industry's first newspaper and won numerous awards for the publication. He also has been an award-winning technology journalist for the Dallas Morning News and Fort Worth Star-Telegram. He is a graduate of the Harvard Business School and the University of Missouri School of Journalism.
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