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Good morning, and let me join my HP colleagues and welcome you to HP MegaForum. One of the greatest challenges facing Chinese industry, government and education is to fully capitalize on the benefits of the Electronic World, the topic of my address this morning. We are applying the Packard spirit of respect-filled cooperation in working with China to help build China's Electronic World. Later today Mayor Xu and I will witness the signing of a cooperation agreement between China HP and the Shanghai Infoport to create a lab to develop E-Commerce solutions. For many years now, HP has been working towards a world of pervasive information technology that will characterize the 21st century. We call it the Electronic World, and it has four different ingredients.First, there's the Extended Enterprise infrastructure. This foundation of networked systems is based on distributed computing and the Internet. And it allows businesses and people to extend their reach across the boundaries of time and space. Second, there's the sphere of Electronic Business. People are bringing their business processes to “the Net.”And they are using the Net to create entirely new businesses. It's very exciting, and it's happening very fast.But that's not the whole story. There's another sphere developing that most mainstream computer suppliers are paying little attention to, and that's the e-consumer. This world has its own set of technology platforms, information services, operating systems, e-mail applications, etc. Then there is the world of E-commerce, the electronic payment of goods and services. How people exchange value is being redefined, with virtual banks and smart cards and some exciting new devices I'll describe later in these remarks. This is the 21st-century electronic world. And HP is in all spheres of it. Today I want to describe how we are working to build this world. First, we're working to build the foundation —— the necessary technology infrastructure based on distributed computing and the Internet. The environment must be robust, highly available, manageable, and secure. Today I'll discuss the three critical ingredients you see listed here - our systems strategy, the software we offer for making the infrastructure robust and secure, and the services and support we provide.Whenever I begin a discussion of our systems strategy, I use this visual to make a simple point. Customers have a wide range of needs. One size doesn't fit all. And that means that one operating system doesn't fit all. And so we at HP have embraced two —— Unix and NT. We think this approach is well aligned with the needs of customers like the Xiamen Post and Telecommunication Authority.The comprehensive solution we implemented for its Internet Service Provider required both UNIX and NT systems, and our ability to manage and support both environments was critical to the success of the project.Furthermore, we've been working very hard to build bridges between these two worlds. In fact, HP has been the only company with an explicit strategy of bringing these two worlds together. We're working on all levels shown here. We don't have time to go into detail on each, but let me give you some examples in each area.In the area of services and support, HP now provides consulting services in Windows 95, NT and Desktop Exchange. We've created a joint Enterprise Solution Center with Microsoft. And we at HP have created a strong support offering for NT. We're collaborating in the area of high availability. I'll have more to say about that later, when I talk about our PC strategy.In the area of security, Microsoft has endorsed Ver Secure, the cryptography technology developed by HP that the United States government has just approved for export. HP OpenView is the only management platform that is certified for Microsoft BackOffice, and parts of OpenView are being bundled with the next release of Microsoft's Systems Management Server.In the area of messaging, HP is working with Microsoft on interoperability between HP OpenMail —— our messaging backbone product —— and Microsoft Exchange.And finally, we're working on customer-specific solutions in our Enterprise Solution Center, and we're collaborating on platforms geared to the particular needs of the telecom industry and small businesses. In 1997, HP helped to develop with the long distance service of China Telecom a network management system using HP OpenView which links over 400 switches across China. This key connection between China and the rest of the world is powered by HP 9000 servers and workstations. So... we have a firm commitment to integrating the Unix and NT environments... and lots of development efforts and results to show we're serious.
With that caveat, I'd like to talk in more detail about our Unix systems and our PCs separately, and how we are working to provide the performance customers require for their Extended Enterprise infrastructure. HP has a depth of expertise in Unix. We continue to be the number one commercial Unix server vendor, as measured by revenue, and we continue to gain market share. When you add in the disk drives, consulting, support, and all the things wrapped around our Unix servers, they represent a $10 billion business for HP in terms of annual revenue. So our commitment to the business is strong. One of the reasons our Unix systems are ideally suited to power the Extended Enterprise is our ability to guarantee 99.95 percent up time. We're the only company in the industry that can make that guarantee.Delivering 99.95-percent uptime translates to just four hours of unplanned downtime a year. The next best offer in the industry —— 99.5 percent of time —— equals 44 hours of unplanned downtime a year.In the past year, we have accelerated our product-development efforts. The result is a Unix roadmap that we believe will keep us in a clear position of leadership.The V2250 systems we introduced earlier this month are based on our new, 240 MHz PA-RISC processor. They are the world's fastest single-processor Unix servers —— ideally suited for mission-critical and technical applications. We expect to double high-end single-system performance each year. That means that today's high-end of a V-Class system will be the midrange of our family by the year 2000.Furthermore, we plan to take today's 99.95 percent availability guarantee and push that up to 99.999 - 5 minutes of unplanned downtime per year —— by the year 2000.We call this our “5nines:5minutes”vision, and we have succeeded in getting two powerful industry leaders —— Cisco and Oracle —— to embrace this vision and work with us to achieve it.Let me turn now to our other systems business —— PCs. HP has come from virtually nowhere to become a major player —— No. 3 in the world, according to IDC at the end of FY 97.This growth has been fueled by product contributions. Last year, HP earned more than 50 awards for new products introduced in the PC arena. We've been stressing the three major areas you see here.First, manageability.We believe that we can help customers reduce the total life cycle cost of PCs by about half. Notice I said costs, not just purchase price. We have developed a powerful management package called TopTools, and it allows IT administrators to gather 350 key items of information about the PC and to manage the PCs remotely.This information feeds into HP OpenView's Desktop Administrator to deliver the most comprehensive desktop-management solution on the market.HP PCs, NetServers and desktop management system were recently employed by the Government of China in a prototype project which hooks up the Sichuan Province Economic Information System to the National Information Center. Second, availability.We are working with Microsoft to deliver high availability on NT servers. We were the first in the industry to ship Microsoft Cluster Server, which provides shared storage between two computing nodes and automatically restarts an application on another node if one fails.We have integrated into the solution some technology brought over from the Unix side of the house, called Cluster View, which makes it possible to monitor multiple Microsoft Cluster Servers. This is another one of the benefits customers receive from HP's strong support for both Unix and NT. We are able to leverage strengths across these two environments.Finally, performance. Our 8-way, NT-based server is powered by eight 200 MHz processors, each with 1 MB of cache memory. This allows the system to support 14,000 Microsoft Exchange users and 1600 SAP Sales & Distribution users. This is truly enterprise-class performance.Intel and Hewlett-Packard have jointly defined a new architecture technology called EPIC (Explicitly Parallel Instruction Computing). The name signals the ability of the software to extract maximum parallelism —— that is, a potential to do work in parallel —— in the original code and “explicitly”describe it to the hardware.This architecture goes beyond the limitations of current architectures and is ideal for the advanced, multimedia applications of the future.It will enable both Unix and NT to run on the same hardware platform.The architecture provides excellent investment protection for customers running applications on current Intel-based and PA-RISC systems. Customers can run their current applications unchanged on these new systems, achieving somewhere between 60-80 percent of the architecture's peak performance by just recompiling their applications.Our transition strategy is very customer-friendly. Customers can choose when they migrate, and their applications can coexist on both the old and new architectures.We believe we're years ahead of the competition in thinking about this transition. We are working closely with all the major independent software vendors —— industry leaders such as Oracle and Informix, SAP and PeopleSoft —— to make sure their products are optimized for the new architecture by the time it is launched.Finally, we are quite clear about our intention to make this architecture an industry standard. That means there must be a level playing field for our competitors in terms of access to this new architecture. So we're delighted to see strong competitors like Compaq endorse it.We are confident that we can still differentiate HP products above and beyond the microprocessor level. We have lots of expertise in systems-level architectures, high-availability and reliability, advanced compiler technology, powerful middleware and networking capabilities.And we will complete the value proposition with our worldwide service and support capabilities, strong partnerships with solution providers and diverse distribution channels. So differentiating in the new era will be “business as usual” for HP.
