Carly's Dome dream helps HP to catch up

Under its new female leadership, the computer company is reinventing itself and throwing down the gauntlet to IBM
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For a ground-breaking technological invention which promises to revolutionise the computer industry and decimate competitors as mighty as IBM and Sun Microsystems, the launch of HP's new 9000 SuperDome was not exactly prepossessing.

For a ground-breaking technological invention which promises to revolutionise the computer industry and decimate competitors as mighty as IBM and Sun Microsystems, the launch of HP's new 9000 SuperDome was not exactly prepossessing.

On Tuesday, when the new server received its first public airing, the 400 or so journalists gathered expectantly in Wall Street's Regent Hotel were greeted by a pathetic puff of smoke, which subsided to reveal a large box resembling nothing if not a rather capacious fridge-freezer. Still, it wouldn't be the first dome, super or otherwise, to fail to live up to its hype.

The respective websites of IBM and Sun treated SuperDome's unveiling with lofty disdain - deigning not even to mention it - but don't be fooled. Scott McNealy, Sun's chief executive, who unwinds by winding up colleagues on the ice-hockey rink, and Lou Gerstner, the Wall Street bruiser who kicked IBM back into shape, are worried men.

Not that they would admit it, but the main reason may be that HP's assault on the macho men of the computer hardware industry is being masterminded by a diminutive woman who has presided over the feminisation of Hewlett-Packard, as HP used to be known before the formidable Carly Fiorina got her manicured hands on it.

Ms Fiorina, who took charge of HP a year ago, is loath to discuss her gender. She has preferred to concentrate on the job in hand. As well as developing a new server said to be twice as fast as its nearest rival, this also involves negotiating a likely $18bn (£12.8bn) acquisition of PricewaterhouseCoopers' consultancy arm - a deal that would allow HP to complement its technical services with the kind of advisory function that has served rivals such as IBM and Cisco so well.

It seems that Ms Fiorina just does not have the time to do the "America's foremost businesswoman" stuff. Perhaps she is also sensitive to the feelings of her number two, Ann Livermore, who herself had coveted a position vacated by the retirement of former chief executive Lew Platt. Or possibly in deference to Carolyn Ticknor, who completes a triumvirate of women at the top of the corporation famously established by two electrical engineering students in a Californian garage.

Male chauvinists might say that if HP started life in the driveway, its big decisions are now made in the kitchen. However, Ms Fiorina, while in no mood to celebrate the shattering of the glass ceiling, is only too willing to confirm that HP is no longer the company she inherited.

"The SuperDome project has become somewhat legendary inside the company because of the way it was reinventing HP," she says. "It was about bringing together the full power of HP. Today we are raising the bar of what it means to be a player in this industry."

"Reinventing" is one of the buzzwords uttered habitually by Ms Fiorina and her nodding lieutenants - and with some justification. Hewlett-Packard, whose eponymous founders developed a $105bn company on the shoulders of their powers of invention, was founded at the outbreak of the Second World War, but appeared to be on its last legs by the end of the century.

"We were talking about 243 consecutive profitable quarters," says Phil Lawler, managing director of HP's UK arm. "We had never had a crisis. As it wasn't falling apart, the temptation was often just to tinker, not to change."

To be fair, Mr Platt had set the "reinvented" HP in train with the demerger of Agilent Technologies, which separated off many of its original operations. In the process, he ostracised a conservative lobby, which might have opposed the changes brought about by Ms Fiorina, the outsider he decided was needed to drag HP into the 21st century.

Her background - in telecommunications, first with AT&T and then Lucent - provided the perfect perspective to reposition a company that had become preoccupied with its products at the expense of its customers.

Ms Livermore says: "HP has had 61 years as an engineering company, and it took a bit of time to shake up the view that we were just an engineering company. Carly came from a very successful career in marketing and sales, and she has felt and experienced what it's like to be on the customer's side."

Hence SuperDome, billed as "an industry-first, go-to-market business model" boasting "utility-based pricing models" and "future-proof technology upgrades". The jargon trips off Ms Fiorina's tongue and infects the speech patterns of her employees (with the notable exception of Duane Zitzner, HP's technology supremo, who describes Super Dome as "one bad box").

Of course, to the layman, use of the uniform terminology rankles. But at least Ms Fiorina's management style suggests HP's 123,000 employees have had a say in the composition of the song-sheet from which they all must sing. Certainly, this is the impression given by a consensual approach that has seen HP's users consulted at length in the making of SuperDome.

"We've spent the last two years in conversation with our customers," says Ms Fiorina. "It came to be understood that SuperDome was about delivering a new kind of customer experience with world-class technology."

The task was to marry HP's undoubted technical expertise with an intimate knowledge of the needs of its customers. The result is a system that charges customers only if they are satisfied with its service, and then only when they are using it - hence the utility pricing. Vodafone, Amazon and General Motors are among the subscribing companies to have been wheeled out by HP in support of the new product.

Guests at Tuesday's jamboree were asked to applaud the presence of their representatives, a reflection that Ms Fiorina has staked HP's future on its ability to shift enough of these $420,000 boxes to justify a salary and options package which could be worth $50m to her.

Ms Fiorina refuses to attribute HP's consensual approach to the apparently superior listening abilities of the fairer sex. But it is difficult to imagine bulldozers like Mr McNealy and Mr Gerstner, or the latter's likely successor, Sam Palmisano, matching the soothing powers of Ms Fiorina - charm personified, on the surface at least. Whether the industry's bully boys can change their ways in the way Ms Fiorina has reshaped HP is questionable.

"IBM could follow us, but I don't think they will," says Mr Lawler. "There's a danger it might cannibalise their mainframe business. Sun doesn't have the support infrastruc- ture." He rejects the notion that it is HP, by reducing the margins it can charge in selling its staple products, which is doing the cannibalising.

"Margins will be threatened but first mover gives you an advantage," he says. "Laser-jet printers were a high-margin business 16 years ago. Now it's a cut-throat market."

However, the launch of SuperDome may represent a watershed for computer hardware companies. No longer will providers engineer products in the expectation that customers will snap them up willy-nilly. It is the users who are now calling the tune. Perhaps that explains HP's diversion in the probable acquisition of PwC's consulting arm. If selling hardware is no longer sufficient to pay the bills, Ms Fiorina is going to need another source of revenue to cope with the heat of Wall Street's expectations. If not, she had better get out of the kitchen.