Hewlett-Packard is the No. 1 vendor of Intel-based servers today, largely by standing on the shoulders of Compaq, whose ProLiant systems make up the heart of HP’s offerings. But there are signs its momentum has slowed: For the quarter ended July 31, sales of HP’s Intel servers grew 2% year over year, well off the industry pace. IBM, by comparison, saw Intel server sales kick up 18% in its second quarter of the year.
That said, HP’s server customers—which, in many cases, were originally Compaq’s—are generally upbeat. Eric Latalladi, director of technical services for brokerage firm J.B. Hanauer & Co., says HP is its sole supplier for servers because his staff has “a very high comfort level” with its products. “The physical build of their machines is the strongest out of all the vendors,” he says.
For the U.S. Department of Agriculture (USDA), HP’s ProLiant servers have been “very reliable, and that’s amazing because many of them are not in what you’d call computer rooms,” says Scott Snover, a project manager at the agency. As part of the USDA’s Common Computing Environment project, Snover oversaw the rollout in 2001 of ML370 servers (supplied by Compaq) to 3,000 agency offices across the U.S. and in outlying territories—several without air conditioning. “These servers are not babied by any means,” he says.
But HP can be inattentive. Chris Beck, a network administrator for the city government of Fontana, Calif., says “I love HP’s hardware” but notes that the company hasn’t proactively told him about changes in its server portfolio. For example, HP recently phased out a network adapter the city used in several servers, catching Beck’s group by surprise. “It would have been nice to get the heads-up about that so we didn’t have to go do the research,” he says.
And competitors have sometimes beaten it to the punch. Most of the Public Broadcasting Service’s servers are from HP. But a year and half ago, André Mendes, the network’s chief technology integration officer, deployed IBM’s BladeCenter because “the original HP blade servers were not up to snuff. The processors they offered were not fast enough for what we needed.”
Now, however, Mendes is considering replacing PBS’ three racks of IBM blade systems with HP’s BL20p systems. “We’ve studied what HP is bringing to the table now,” he says, “and we think they’re on the right track.”
|
HP operating results*
|
* Fiscal year ends Oct. 31; FYTD reflects first nine months Source: company reports
Other Financials**
Total assets – $74.38B
Stockholders’ equity – $38.71B
Cash and equivalents – $13.99B
Long-term debt $4.91B –
Shares outstanding 3.06B –
Market value as of 8/25 – $55.19B
**As of July 31, 2004, except as noted
