Hewlett-Packard tackles the future

To take a phrase from the auto industry, this is not your father's HP. The stalwart of Silicon Valley has done some deep group thinking, perhaps thanks to management consultants, and devised a vision in which it can capitalize on its strengths by weaving together what were previously standalone product offerings and aggressively adding to its product portfolio.

Although words by themselves don't translate into action, the new Hewlett-Packard attitude is shown in a speech by Joe Beyers, general manager of the Internet Business Unit. He said the attitude could be captured by the words "move fast; aggressive; take risks, innovate." So HP can talk the talk, but can it walk the walk? The larger issue is whether HP's vision of eservices will be widely adopted.

HP is also trying to outdo IBM in the vision category by promoting eservices with thought-provoking ads. The ad campaign is designed to gain entry into the vision game. The interesting thing about eservices is that it can be nearly anything one wants it to be. In HP's words, eservices "envisions a world in which people and businesses derive new value from the line et by moving beyond Web-based access to information to a world in which a rich array of nimble, modular electronic services, eservices, are accessible by virtually anyone and any device."

Some of the main prongs of HP's eservices thrust:

* Espeak - the underlying glue

* Risk model - financing systems at no up-front cost to the new eservices provider in return for sharing revenue

* Alliances - to provide turnkey solutions

ESPEAK

Espeak is HP's term for "an open platform for the creation, composition, mediation, management, and access of Internet-based services." HP has some ambitious plans for espeak's capabilities. According to HP, eservices powered by espeak "can advertise their capabilities to other eservices, discover other eservices on the Net, and even ally with other eservices on the fly to create new eservices." Espeak allows ad hoc and secure interactions across firewalls and is open, modular, scalable, secure, and manageable and features dynamic brokering, HP said.

Espeak is cross-platform software that supports Unix, NT Server, and Linux. HP plans to make HP espeak core software available to the development community on an open source model and to sell development tools, support products, and consulting to the eservices marketplace.

The espeak "architecture includes core software and programming tools that can be used with resources of any kind (computing device, application, or data content) regardless of hardware or operating system environment," HP claims. The core software components need to be installed on each device/appliance that connects to the espeak services environment and provide basic capabilities such as messaging, security, naming, monitoring, and mediation for the eservices running on or accessed by these devices/appliances. This means espeak needs a high degree of adoption by device manufacturers. The idea is that developers will be able to focus more of their effort on solutions that differentiate their services if they can use prebuilt components and solutions [ILLUSTRATION FOR FIGURE 1 OMITTED].

The real question is whether HP can propagate to its competitors its espeak technology, the interoperable glue that helps different systems provide the new era of services. Traditionally, efforts proposed by a major systems player have often met with less-than-complete adoption by competitive systems makers. Now, the question is whether in the Internet era, when the whole is constituted of many parts, competitors will adopt underlying software designed not by a neutral third party but by one of them.

Sonera Ltd., a Finnish communications company, is working with HP to develop technologies and eservices based on espeak and Sonera's Smart Trust technology, a secure digital signature technology for wireless networks.

RAZOR BLADES

In the topsy-turvy world of the Internet, companies are suddenly finding their business models changing. Companies are discovering they are in the razor blade business in which their systems razor equivalents - are merely the entry point to a revenue stream. HP understands this concept and is drawing upon its financial strength to inject itself as a key supplier to emerging and existing service providers. HP's accountants apparently have cast aside their ultraconservative ways and are now muttering a mantra that sounds like "invest now, reap later." They're actually speaking the words "risk sharing."

Some of the prongs of the HP strategy appear to be:

* Get systems adopted by service providers and gain access to the ongoing revenue stream.

* Pilot eservices in a variety of markets.

* Make deals and acquisitions to complement HP's portfolio.

HP launched its eservices campaign via its modestly named "Commerce for the Millennium" program in which HP is positioning itself as the preferred, no-cost provider of complete ecommerce-in-a-box systems for service providers catering to small businesses. In this program, HP has adopted the risk-sharing business model in which HP takes no up-front payment from the service provider and deploys, supports, and comarkets the solution. In return, HP and the service provider share service-related revenue streams from sources such as monthly service fees, service set-up fees, and transaction fees.