One year after the finalisation of the biggest merger deal in IT, the European head of Hewlett Packard (HP) is bullish about the state of the merged company.
Kasper Rorsted, HP's managing director for the Europe, Middle East and Africa (EMEA) region, told vnunet.com that HP's consolidation and cost cutting plans were ahead of schedule.
"We wanted to deliver a better and broader product and service offering and drive a better cost structure and higher productivity," he said.
In 12 months, HP has taken $3bn (£1.9bn) out of its worldwide cost base with a combination of lay-offs, office closures and procurement savings thanks to the company's hefty buying power.
Its original target was $2.4bn in savings in the first 18 months after completion of the deal.
The company's 33 business computer product lines have been reduced to 27. HP will also unify its 64-bit server road map, including systems using Alpha, PA-Risc and Mips processors, by moving all 64-bit enterprise server lines to the Intel Itanium Processor Family by 2005.
HP AlphaServer systems (using Alpha processors), and HP 9000 servers (using PA-Risc processors), will merge into a single line of enterprise server products, supporting both PA-Risc and Intel.
Meanwhile, HP NonStop servers, which currently use Mips processors, will move to the Itanium architecture next year.
After that, the consolidation will be complete. "There will be no more road map consolidation from the merger. From a product standpoint we are where we need to be," confirmed Rorsted.
Objectives to reduce EMEA headcount by 5,900 and merge facilities are well on the way to being achieved, and, he added, "quicker than was generally anticipated".
The figures also paint a positive picture for the company, with first-quarter revenues growing six per cent on the previous quarter.
And the company has succeeded in getting its PC Group back into the black in the last year. The enterprise group is still losing money, but HP plans to turn it around by the end of the year.
"A year to 18 months ago our competitors said HP would lose market share as a result of the merger," said Rorsted.
"But we have leading market share in all areas except digital cameras, and our market share in the UK is the highest for the last three years."
The merger doubled HP's services capability, which Rorsted claimed played a major role in securing some large deals, including major contracts with the Bank of Ireland and Ericsson in Europe.
"Our objective is to preserve and expand our leadership across all technology areas and go after more and more mega deals," he added.
Rorsted is confident that despite the massive scale of the integration project, disruption has been minimal. Customers have responded well to the changes, he said, although not without significant effort on HP's part.
Major customers have been guided through the merger process, with Rorsted meeting with the company's 25 biggest customers in the region.
It is a strategy that appears to have paid off, as the the company claims it has not lost a single European customer since the merger.
HP Works, one of five existing HP user groups in the UK, said the merger process had been handled well.
"Communication with customers has been good and they're satisfied with the way road maps have been developed," said Dr John Owen, chairman of HP Works.
"For old HP customers it's very much business as usual, with added benefits."
The introduction of clustering technology from the Compaq side had been very much welcomed by HP customers, who saw it as a significant enhancement, Owen added.
Reflecting the merger activity by the vendor, the user groups will be going through a similar process. HP Works will join with other user groups in the UK, starting with the HP-Compaq Users' Organisation, by the end of the year.
"The feeling is there's more of a customer focus now than 12 months ago," said Owen.
"Compaq had a lot to teach HP about customer relationships, and the hope is it's for the long term."
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