Case Summary
Jim Davies needs to recommend a workable technology strategy for Enterprise Systems Group (ESG)’s mission critical enterprise computer systems, comprising both PC-based and proprietary servers and workstations. ESG provides mission critical applications to its client’s web-based IT infrastructures and business processes. This is the high-end of the industry, dominated by mainframes (for large corporations), internet servers, workstations and supercomputers (Verlinden & Christensen, 1999, p. 1).
The important question is to determine whether HP should continue investing its resources in extending the capability of its UNIX-based Performance Architecture built on the proprietary HP RISC microprocessor or whether the company should …show more content…
It also appears that ESG has already conceded the UNIX market to HP’s competitor, Sun (which had shipped more UNIX servers than its competitors). In addition, the UNIX business was more promised with rapid amalgamation with second-tier systems suppliers such as Hitachi and Silicon Graphics. Sun’s acquisition of smaller competitors has given it a commanding position in the eyes of vendors that were looking to partner with top-tier vendors for access to UNIX technology.
Further, the company had the choice of the release deadlines for IA-64 and McKinley. The first option is to proceed with the release of IA-64 after the six-month delay, and then release the McKinley a year later or discontinue the development of IA-64 and instead focus on the early release of McKinley. Since some in the market may be waiting for the send generation version of the same, the release of IA-64 may not be very successful in meeting HP’s short-term earnings …show more content…
Any more delays only work to the advantage of Sun, Solaris, and other competitors. In addition, there remains a risk of McKinley being similarly delayed, which would be detrimental to the company’s short-term earnings prospects.
Pulling resources out of the UNIX-based Performance Architecture would give a strong signal to the market regarding HP’s commitment to the new technology, and given the fact that Merced will be ready in a six-month period, the development of servers and workstations for the new architecture should be more promising for the long-term. HP should call off the release of IA-64 and instead wait for McKinley while keeping up its short-term earnings by continuing its the UNIX-based Performance Architecture based on the HP RISC microprocessor. This is even more viable because of the price inflation in the RISC market due to the high fixed costs of
Jim Davies needs to recommend a workable technology strategy for Enterprise Systems Group (ESG)’s mission critical enterprise computer systems, comprising both PC-based and proprietary servers and workstations. ESG provides mission critical applications to its client’s web-based IT infrastructures and business processes. This is the high-end of the industry, dominated by mainframes (for large corporations), internet servers, workstations and supercomputers (Verlinden & Christensen, 1999, p. 1).
The important question is to determine whether HP should continue investing its resources in extending the capability of its UNIX-based Performance Architecture built on the proprietary HP RISC microprocessor or whether the company should …show more content…
It also appears that ESG has already conceded the UNIX market to HP’s competitor, Sun (which had shipped more UNIX servers than its competitors). In addition, the UNIX business was more promised with rapid amalgamation with second-tier systems suppliers such as Hitachi and Silicon Graphics. Sun’s acquisition of smaller competitors has given it a commanding position in the eyes of vendors that were looking to partner with top-tier vendors for access to UNIX technology.
Further, the company had the choice of the release deadlines for IA-64 and McKinley. The first option is to proceed with the release of IA-64 after the six-month delay, and then release the McKinley a year later or discontinue the development of IA-64 and instead focus on the early release of McKinley. Since some in the market may be waiting for the send generation version of the same, the release of IA-64 may not be very successful in meeting HP’s short-term earnings …show more content…
Any more delays only work to the advantage of Sun, Solaris, and other competitors. In addition, there remains a risk of McKinley being similarly delayed, which would be detrimental to the company’s short-term earnings prospects.
Pulling resources out of the UNIX-based Performance Architecture would give a strong signal to the market regarding HP’s commitment to the new technology, and given the fact that Merced will be ready in a six-month period, the development of servers and workstations for the new architecture should be more promising for the long-term. HP should call off the release of IA-64 and instead wait for McKinley while keeping up its short-term earnings by continuing its the UNIX-based Performance Architecture based on the HP RISC microprocessor. This is even more viable because of the price inflation in the RISC market due to the high fixed costs of