Hewlett-Packard Co - Move To The Internet

MOVE TO THE INTERNET

One of the first major firms to engage in telecommuting, in 1994 HP developed a set of guidelines for employees who wished to work from home or at other offices. The firm's intranet, considered one of the largest in the world, allowed employees from all over the world to communicate with one another. Despite the firm's timeliness in this regard, however, it actually began a whole-hearted embrace of the Internet much later that its competitors. The reason for this, ironically, was that the decentralized structure that had worked so well for HP since its inception had "become a recipe for inward focus and bureaucratic paralysis," according to The Economist. By the 1990s, "the company had become a collection of 130 independent product groups that tried harder to meet their own financial targets than to find any common thread. It was no surprise, then, that HP was late to the Internet party—even though it had the technology in its labs. While Sun Microsystems and IBM were busy marketing themselves as dot.com revolutionaries, HP was still focusing on hardware." CEO Platt, in an effort to jumpstart HP's slowing growth, over-saw the release of an Internet Solutions line in 1997 and put in place an Internet Applications Systems Division to oversee the new products. However, it wasn't until Carly Fiorina took over in mid-1999 that the firm truly turned its focus to the Internet.

Fiorina launched a full-scale restructuring of HP, overhauling not only its internal organization by re-shuffling operations into four major groupings—computer products, imaging products, consumer sales, and corporate sales—but also the firm's marketing strategies and corporate vision. She narrowed HP's focus to providing information tools, infrastructure for these tools, and e-services. By the end of the year, HP had unveiled two new products: the Commerce for the Millennium system and the 9000 N Class server, which was designed to offer Internet Service Providers (ISPs) a comprehensive suite of online commerce tools. Her efforts were rewarded just a short while later, in mid-2000, when Internet retailing titan Amazon.com selected HP to provide roughly 90 percent of its Internet infrastructure, including Internet servers, storage devices, and PCs linked to the Internet. By then, HP had integrated its technology into various e-services solutions packages.

To bolster its position in the server market, in September 2000 HP introduced the HP 9000 Super-dome server, which allows different operating systems to run at the same time. The new machine, a key component in HP's quest to become the leading computer system supplier for Internet-based enterprises, was marketed to major dot.com businesses. In January 2001, HP bought Bluestone Software Inc., a maker of e-business tools. Rapid integration of the acquisition allowed HP to release 25 software products the following month, including the Netaction e-services development and implementation suite, and the OpenView e-services systems management suite. In April, HP balanced out its new software releases with several new hardware products, namely 19 Internet server appliances.

Foirina's efforts to retool HP received mixed reviews in 2001. While some analysts saw the many changes at HP as overdue, others expressed concern that HP was attempting to make too many changes at once, particularly as the slowing North American economy started to undercut the performance of most players in the information technology industry.