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HP OpenView - managing to grow?
HP's OpenView management software has undergone a facelift, but in the face of strong competition and under the wing of a company not known as a trailblazer in software or marketing, its future is hard to predict. Sonya Rabbitte looks at which way the company is likely to take the product.

By Sonya Rabbitte

Published: Thursday 23 November 2000

It's been one of those weeks for HP. The release of disappointing fourth quarter results last Monday was just the beginning of a series of calamities. By Monday evening, the Nasdaq index had fallen to a 52 week low, triggered by a rush to sell tech stocks in the wake of the HP announcement.

Earnings of 41 cents per share missed analyst expectations by ten cents. It was the first downturn in eight quarters, and it must have been in the minds of HP executives as they opted to pull the planned $18bn takeover of the consulting business of professional services firm PricewaterhouseCoopers (PwC).

While CEO Carly Fiorina was issuing a statement admitting full responsibility for the company's financial hiccup, executives for flagship network management software, OpenView, were upbeat at their annual symposium. They outlined a restructuring of the OpenView range in an effort to capture a greater share of the e-services market.

The new strategy will transform OpenView from a suite of standalone products to a complete end-to-end solution. At least that's the spin. The aim is to integrate the separate areas of network, systems, applications, storage and customer service management.

According to HP executives, newly acquired NMOS source code from Riversoft will play an integral role in improving the scale and range of the software and facilitating improved connectivity.

Tony Williams, marketing and channel manager for OpenView UK, explained the thinking behind the strategy.

He said: "What HP is trying to do with the emergence of ebusiness is develop more of a jigsaw approach rather than our traditional building block approach. We are now developing an end-to-end solution for customers. I think this is a time when people with ebusiness strategies want always-on solutions."

With HP already reporting a 29 per cent growth for the fourth quarter in its network management software division, the decision to opt for integration seems right - if you're an HP executive.

However, analysts are not as convinced. They say HP is doing all the right things, but lacks the vision to execute a competent marketing strategy.

Jolanta Pilecka, marketing director with content management software specialist Gavoa, and former product manager for HP's OpenView, claims HP's manufacturing background has influenced its marketing strategy.

"Marketing has always been a big battle. HP marketing is different from Microsoft, where you hype a product a year before it hits the market. HP is traditionally an engineering firm. Engineers don't want empty marketing words, they want more substance," she said.

While Pilecka admits she would like to see a more aggressive approach to marketing, she has confidence in Fiorina's ability to lead the company.

"Carly's idea is to reinvent HP and marketing is strong on her agenda. There is a strong drive to get a good balance between marketing and substance. They're on the right track," she added.

Ian Bramley, MD of system management research specialists, Software Strategies, agrees HP is under-exploiting its market advantage. While he credits it as one of the top four systems management companies, after CA, IBM's Tivoli and BMC, he describes it as the "laggard" of the group.

"They're number four, but they should be number one or two," he said. "HP have never been strong selling software products. A lot of people are disappointed that OpenView didn't expand faster. They've let their leading position slip."

Graham Fisher, analyst at Bloor Research, also agrees that HP is crawling behind their competitors. He expressed surprise that the company is only now beginning to develop an end-to-end solution. While it may be an overused buzzword, it is an essential e-services requirement, and one everyone else was doing 12 months ago, according to Fisher.

But he shares some of Pilecka's optimism. In the aftermath of poor results and the cancelled PwC deal he feels a reversal of fortune is in store for HP - but only if they fight for it.

"After bad news you have to respond with good news. They have to realise they have fallen behind in the development of OpenView. They have the opportunity now to spring back. They've got press attention, but it depends on how they play it from here. Hopefully it will act as a wake up call," he said.

HP is like the lazy A grade student happy to settle for Cs. It makes good software, it commands good market share, but it has the potential to do so much better, say the analysts.

The gradual roll out next year of the integrated OpenView line is a good starting point, although there are even grievances about this. Why is HP not hyping it more? Why isn't it an industry talking point? Why a gradual roll out and not a full on, publicity grabbing launch?

HP's existing audience will mainly remain loyal to the OpenView range, especially as they are to be offered free upgrades. This customer loyalty will certainly leave HP as a force to be reckoned with, but it won't place the company in the pole position that Bramley and others believe it can achieve.

There is a danger that the new OpenView strategy will sink in the absence of extensive marketing. In fact, if HP continues as it traditionally has done, that danger becomes more real. The market seems ready for a brash, bold, publicity-hogging HP. It just remains to be seen if HP itself is ready.