HP FORUM - Business the focus at HP event

Last year's HP Technology Forum was chased out of New Orleans by Hurricane Katrina. This year, storm clouds of a different sort hang over the event.

As an estimated 6,000 attendees converge on Houston for the annual Hewlett-Packard user conference, the subject on many minds is the one the company is most loathe to discuss: the shakeup of HP's board and the prospect of criminal charges related to a spying scandal.

The California Attorney General and a Congressional committee are among the institutions probing HP's possibly illegal methods of investigating news leaks from its board. HP has until Tuesday to respond to an invitation from the Oversight and Investigations Subcommittee of the Energy and Commerce Committee for HP's Chairman Patricia Dunn and General Counsel Ann Baskins to testify at a Sept. 28 hearing in Washington.

But at the Technology Forum, a gathering of HP user groups, partners and other vendors, HP is focusing on its business success, which is considerable.

With revenue, earnings and stock price all resurgent in the last year, HP CEO Mark Hurd could rightly say, "Pay no attention to that prosecutor behind the curtain," when he delivers a keynote address on Sept. 18.

In the quarter ended July 31, HP's earnings-per-share (EPS) topped analysts' estimates at US$0.52 on 5 percent revenue growth to US$21.9 billion, compared to the year ago quarter.

Across many of its business lines, HP has gained on rivals, said industry analyst Rob Enderle.

HP personal computer sales have grown with its "the computer is personal again" marketing campaign, Enderle noted. IBM sold its personal computer business to Lenovo Group, in 2005, and Dell has suffered negative publicity from the August recall of 4.1 million fire-prone batteries in Dell laptops.

In storage, HP closed the market share gap with EMC in second quarter numbers released Aug. 29 by research firm IDC. With EMC's 20 percent share, based on unit sales, to HP's 19.3 percent, the two are in a "statistical tie" said Brad Nisbet, an analyst with IDC.

"HP has been executing well under new management," Nisbet said, referring to Hurd, CEO since March 2005.

In servers, HP is a strong second to IBM, according to IDC market share numbers, but has made some errors, said Enderle. It still is using Intel's Itanium processor in its high-end Integrity servers, which rivals aren't embracing. Gartner research shows that 90 percent of the Itanium chips shipped in the first quarter of this year ran on HP servers; neither Dell nor IBM build Itanium computers.

Technology Forum organizers get tight-lipped when the conversation shifts to the board scandal.

"That's HP's business," said Nina Buik, vice president of Encompass, one of the HP user groups planning the event. "We're not focused on those issues unless it impacts the technology."

And as long as the scandal doesn't touch Hurd personally, the customer satisfaction should be unaffected, said Crawford Del Prete, senior vice president of research at IDC. .

"I don't think [the scandal] is a drag on the company's success," he said. "I have not found one customer who said 'I'm not going to do business, or I am concerned about doing business, with Hewlett-Packard as a result of this.'"

HP Technology forum runs from Sunday to Thursday this week.

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