Users blast HP server phase-out

Hewlett-Packard last week dismayed many users of its HP e3000 systems, disclosing plans to stop selling the decades-old computer line in two years and to cease support at the end of 2006.

The future of the HP e3000 has long been a source of concern for its large installed base and the news angered many IT managers, who said they have built their corporate back-end computing environments, and staked their careers, on the venerable mid-range system.

According to Gartner, over the last five years HP e3000 sales worldwide have been in steady decline. In 1997 HP shipped 2268 units of the HP e3000, followed by 1377 in 1998, 758 in 1999, and 376 in 2000.

Gartner senior analyst for hardware platforms, Matthew Boon said that the Asia-Pacific region would "map if not exceed this decline".

HP's worldwide revenue for the e3000 for the last five years was $US1 billion, while total server revenue for HP was $US30 billion.

Boon speculated that HP was reducing its commitment to the server line because it was moving away from its PA Risc server family and "reviewing" this older line.

One user said the phase-out plan is especially hard to swallow, because HP laid out a five-year development road map for the HP e3000 at a conference sponsored by the independent Interex user group in the US in August.

"I feel betrayed, because I left the HP World conference with a renewed feeling of confidence that the platform would be around," he said. "How can we trust HP?"

The e3000 series was launched in 1972 and is one of the last of the old-line minicomputers left standing, along with Compaq Computer's OpenVMS-based systems and IBM's AS/400, which is now called the iSeries.

Winston Prather, general manager of the HP e3000 business unit, said "several thousand" of the systems are still in use - an amount that some analysts termed a big understatement.

Boon said the installed based in the Asia-Pacific region would be minuscule compared to the North American region.

The e3000 is a high-end and low volume line because it is only relevant to a handful of corporate IT shops like Federal Government departments, he said.

HP made its latest overhaul of the e3000 in February, introducing new A-class and N-class systems that offer up to 65 per cent and 35 per cent more power, respectively, than their predecessors. But, Prather said, e3000 sales have been on the decline for years. "HP has tried very hard to refresh the product," he said. "[But] we can read the writing on the wall and look at the trend and predict the erosion will continue."

A five-year road map for the e3000 was laid out at this year's HP World show, an HP spokeswoman confirmed. But she said the road map included just two years of specific product enhancements that HP still plans to implement. The other three years were "ideas" and didn't represent firm commitments by HP, she said.

The decision to scrap the HP e3000 comes at a sensitive time for HP, which is struggling because of the economic downturn and engaged in an uphill battle to complete its proposed acquisition of Compaq.

Under the phase-out plan announced by HP, the company will continue to sell and enhance the HP e3000 through October 2003. Technical support services for the machines, which run HP's proprietary MPE/iX operating system, will continue until the end of 2006.

HP hopes e3000 users will migrate to its other servers running HP-UX, Windows or Linux, and it's offering a series of discounts and trade-in offers designed to help lower the transition costs.

In order to ensure customers have enough time to plan any new financial purchases, HP said last week that it will continue to sell HP e3000 servers until November 1, 2003, including new processor and storage solutions, and also provide a "broad portfolio of support" including migration services, financing options, consulting, outsourcing and education for the e3000 servers until the end of January 1, 2007, giving them time to move to an alternative HP server platform.

While Boon believes customers are being offered "reasonable terms" by the vendor, he added that cutting the e3000 line will make customers more subject to offers from competitors like IBM and Sun.

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