CHEMISTRY
Customer Unrest a Year Later
By Deni Connor, Network World -- HP might have calmed Wall Street's fears about the Compaq acquisition, but one year after the deal was finalized it appears the company has yet to convince the group that matters most: customers. 
Whether the topic is service, storage, product road maps or business practices, HP customers generally report experiencing a mix of satisfaction, unhappiness and confusion more than any benefits the company might have touted during its long and contentious battle to gain stockholder approval for the merger. Next week HP executives plan to brief reporters on their "enterprise strategy," and it's a fair bet they also will face questions about the assimilation of Compaq. "On paper, the merger looks to have gone very well," says John Eisenschmidt, director of packaged application implementation and support for Feld Entertainment in Vienna, Va. "As an HP customer, however, I'd have to say it's gone poorly." Feld Entertainment is the producer of Ringling Bros. and Barnum & Bailey Circus and Disney on Ice. Eisenschmidt has HP Alphaservers, Compaq ProLiant servers and a storage-area network (SAN) built with HP products. "I've seen a dramatic drop in the quality of service, so much so that we stopped buying [what used to be called] Carepaq support contracts and started keeping spare servers on the shelf," Eisenschmidt says. "The failure rate went up, the response time went down, and the expertise I used to know with Alpha and PC technicians on the Compaq side is gone," he says. His concern is shared by Terry Roedecker, senior network manager for a large financial institution in the Midwest, who says he has experienced similar issues with his ProLiant servers. "HP has made some cultural changes at Compaq that we don't like," Roedecker says. "One of our biggest servers lost a power supply two weeks after going out of warranty. When we called HP for a courtesy extension, they said they couldn't do courtesy extensions any longer. Compaq had done it several times for us in the past." Roedecker says his organization also recently lost a motherboard on a server that was in warranty and had next-day replacement guarantees with a technician onsite. "The parts were here the next day, but the technician wasn't able to show up for three days," Roedecker says. "With Dell, they were onsite in four hours to replace a $30 part." Since switching its business to Dell, Roedecker has acquired 50 servers. HP defends its support policies, saying it has not changed since the merger. "Warranties for HP ProLiant servers have continued on as they were before the merger," a company spokesman says. Other HP customers say they are more pleased with their post-merger service. "From a call center or help desk perspective, [HP is] outstanding," says Dave Hogan, senior vice president and CIO with the National Retail Foundation in Washington, D.C. "From a support issue, we had a minor hardware problem, and they were all over it. I always get a good solid technical person on the other end of the line, as opposed to some call centers with sales and marketing people." Wade Phillips, technology manager for the Shakopee Public Schools in Minnesota, says that any service problems HP has are the result of the company being larger. "HP has become a bigger company, and that has affected some of the personal touch that Compaq had," Phillips says. "The presales and postsales guys hold together the customer contact and at least keep us happy." Phillips has noticed another change. "Credit lines have become a lot harder - they used to be more lenient with the pay cycles of our school district," Phillips says. "They have adopted better business practices and have changed to become tougher that way." "The integration of storage products is going great with respect to the merger," he adds. "HP was very smart to keep the Compaq StorageWorks products. We use StorageWorks almost exclusively." Some HP customers remain bewildered by the company's plans to move so many system platforms to the Itanium processor. HP and Compaq had decided to abandon their own server chip architectures in favor of Intel's Itanium processor. Now that the companies are united, they must work to migrate a massive installed base of PA-RISC and Alpha server users to the new platform from Intel. Believing that many customers will want to adopt a new processor and migrate existing machines to it is myopic, according to some customers and analysts, especially in this down economy. "When you come up from the Xeon space, Itanium looks attractive, says Hal Kuff, a vice president of technology and an HP user at wireless technology distributor Tessco Technologies in Hunt Valley, Md. "But when you come down from Alpha, you have serious concerns about the power for the dollars." Long-time HP customer Douglas Becker, IT specialist for the Pierce County government in Tacoma, Wash., also questions HP's plans to migrate users to other platforms. "[The processor] is just another of their forays into new technology that may or may not last more than two years," Becker says. "As for product overlap on the HP3000, it's about as likely as a snowball's chance in a blast furnace that Pierce County would move from an HP3000 to an [Itanium] running HP-UX." He might consider Dell or IBM servers, but for now Pierce County has one HP3000 server running the mpe/iX operating system, 24 ProLiant Windows-based servers and a few HP-branded servers. Jamie Gruener, senior analyst for The Yankee Group, says HP has its work cut out on this issue. "HP is set on Itanium for at least the next 12 months, but what has to be proven and what a lot of people are waiting for is the value proposition that supports customers moving their platforms to Itanium," Gruener says. "The supporters of Itanium have to show that performance is better than existing systems and that the migration to these new platforms is going to be easy."
Whether the topic is service, storage, product road maps or business practices, HP customers generally report experiencing a mix of satisfaction, unhappiness and confusion more than any benefits the company might have touted during its long and contentious battle to gain stockholder approval for the merger. Next week HP executives plan to brief reporters on their "enterprise strategy," and it's a fair bet they also will face questions about the assimilation of Compaq. "On paper, the merger looks to have gone very well," says John Eisenschmidt, director of packaged application implementation and support for Feld Entertainment in Vienna, Va. "As an HP customer, however, I'd have to say it's gone poorly." Feld Entertainment is the producer of Ringling Bros. and Barnum & Bailey Circus and Disney on Ice. Eisenschmidt has HP Alphaservers, Compaq ProLiant servers and a storage-area network (SAN) built with HP products. "I've seen a dramatic drop in the quality of service, so much so that we stopped buying [what used to be called] Carepaq support contracts and started keeping spare servers on the shelf," Eisenschmidt says. "The failure rate went up, the response time went down, and the expertise I used to know with Alpha and PC technicians on the Compaq side is gone," he says. His concern is shared by Terry Roedecker, senior network manager for a large financial institution in the Midwest, who says he has experienced similar issues with his ProLiant servers. "HP has made some cultural changes at Compaq that we don't like," Roedecker says. "One of our biggest servers lost a power supply two weeks after going out of warranty. When we called HP for a courtesy extension, they said they couldn't do courtesy extensions any longer. Compaq had done it several times for us in the past." Roedecker says his organization also recently lost a motherboard on a server that was in warranty and had next-day replacement guarantees with a technician onsite. "The parts were here the next day, but the technician wasn't able to show up for three days," Roedecker says. "With Dell, they were onsite in four hours to replace a $30 part." Since switching its business to Dell, Roedecker has acquired 50 servers. HP defends its support policies, saying it has not changed since the merger. "Warranties for HP ProLiant servers have continued on as they were before the merger," a company spokesman says. Other HP customers say they are more pleased with their post-merger service. "From a call center or help desk perspective, [HP is] outstanding," says Dave Hogan, senior vice president and CIO with the National Retail Foundation in Washington, D.C. "From a support issue, we had a minor hardware problem, and they were all over it. I always get a good solid technical person on the other end of the line, as opposed to some call centers with sales and marketing people." Wade Phillips, technology manager for the Shakopee Public Schools in Minnesota, says that any service problems HP has are the result of the company being larger. "HP has become a bigger company, and that has affected some of the personal touch that Compaq had," Phillips says. "The presales and postsales guys hold together the customer contact and at least keep us happy." Phillips has noticed another change. "Credit lines have become a lot harder - they used to be more lenient with the pay cycles of our school district," Phillips says. "They have adopted better business practices and have changed to become tougher that way." "The integration of storage products is going great with respect to the merger," he adds. "HP was very smart to keep the Compaq StorageWorks products. We use StorageWorks almost exclusively." Some HP customers remain bewildered by the company's plans to move so many system platforms to the Itanium processor. HP and Compaq had decided to abandon their own server chip architectures in favor of Intel's Itanium processor. Now that the companies are united, they must work to migrate a massive installed base of PA-RISC and Alpha server users to the new platform from Intel. Believing that many customers will want to adopt a new processor and migrate existing machines to it is myopic, according to some customers and analysts, especially in this down economy. "When you come up from the Xeon space, Itanium looks attractive, says Hal Kuff, a vice president of technology and an HP user at wireless technology distributor Tessco Technologies in Hunt Valley, Md. "But when you come down from Alpha, you have serious concerns about the power for the dollars." Long-time HP customer Douglas Becker, IT specialist for the Pierce County government in Tacoma, Wash., also questions HP's plans to migrate users to other platforms. "[The processor] is just another of their forays into new technology that may or may not last more than two years," Becker says. "As for product overlap on the HP3000, it's about as likely as a snowball's chance in a blast furnace that Pierce County would move from an HP3000 to an [Itanium] running HP-UX." He might consider Dell or IBM servers, but for now Pierce County has one HP3000 server running the mpe/iX operating system, 24 ProLiant Windows-based servers and a few HP-branded servers. Jamie Gruener, senior analyst for The Yankee Group, says HP has its work cut out on this issue. "HP is set on Itanium for at least the next 12 months, but what has to be proven and what a lot of people are waiting for is the value proposition that supports customers moving their platforms to Itanium," Gruener says. "The supporters of Itanium have to show that performance is better than existing systems and that the migration to these new platforms is going to be easy."