DECEMBER 12, 2002
© Copyright 2002 Hewlett-Packard Development Company, L.P
All rights reserved. Do not use without written permission from HP.
Good morning. It’s a great honor for me to be here today, and on behalf
of now 140,000 HP employees in more
than 160 countries around the world, I want to thank you for the opportunity
to participate in this important conference.
For more than four decades, HP has
been privileged to be a guest and trusted partner here in Japan. We have
had the chance to work with many worthy companies over the yearscompanies
that not only honored us with their business, but more importantly honored
us with their trust.
Over the past decade, one company has taken that trust to a new levelone
company in particular we have been proud to call our partner, and our
friend. That company is NEC.
There is an age-old Japanese proverb that reads: ‘‘the future is greater
than the past,’’ and one thing that has always struck me about NEC, is
that its vision of the future is rooted in the best principles of Japan’s
pastthat even though we live in an age of new technology, our oldest
and most fundamental values should still be our guiding light. At HP,
we believe this as well. We know that who we are is defined by both our
character and our capability.
The values of honor, trust, respect and tradition lie not just at the
heart of Japanese families and Japanese society, but they also lie at
the heart of the qualities that bring NEC to the marketplace every day,
and we believe HP as well. NEC has
always understood that great companies are judged not just by their imagination
or by their inventionbut by their integrity as well. And we at HP
also believe that great companies are defined by invention and integrity.
I believe the integrity of NEC starts at the very top, and I consider
it a great privilege to share this occasion today with President Koji
Nishigakiwho has been a part of NEC for as long as HP
has been a part of Japan. One of the things that I find fascinating about
Nishigaki-san’s career is that he was not only a standout judo athlete
when he was a young man, but when he was a student at Tokyo University,
he was also the quarterback and first captain of Tokyo University’s American
Football Club, which he helped to create.
As far as understanding the things that are near and dear to American
hearts, it was surely a sign of things to come. And he has been one of
the world’s outstanding quarterbacks at NEC over the past three years.
So Nishigaki-san, if you ever tire of the information technology business,
I’m sure there are some American football teams who would be interested
in your services…
Integrity, I think, is also reflected in NEC’s customers, and I wanted
to come here first and foremost to say thank you for putting your trust
in HP as a partner of NEC. We at
HP understand that great organizations
are defined not just by the company they are, but also by the company
they keep. And I want you to know that today at HP,
just as in the past, everything we are about and everything we do, starts
with our customers. We know that nothing happens unless you are willing
to entrust your business to us, and unless you’re willing to do it again
and again. We never forget who keeps us in business.
Now, you may be here at this important conference for a number of reasons.
Maybe you are here today because you want to find ways to integrate new
Web-based technologies and processestechnologies and processes that
you spent so much time and money putting into place in the 1990s. Or,
maybe you want more help in addressing the issues of manageability and
interoperability. Or maybe you wonder whether it is possible to get more
out of your existing technology assets. Or maybe you wonder what it would
be like if you only had to pay for the computer resources you actually
use. Or maybe, you’re here because you want to see how HP
sees the road ahead.
Certainly, we all know that now is not the easiest time for the IT industry,
or for the world economy. We all know that we are living in uncertain
times, with war, recession, terror and even corporate scandal. But even
though we come here with much on our minds, I actually come to this conference
more hopeful about the future than I have ever been.
I believe that our world todaythat this generation in which we
liveis on the cusp of some of the greatest discoveries and some
of the greatest advances in historyadvances that have the potential
to change the way we all live, work and relate to one another for the
better. And I believe that information technology is central to that future.
I think the market for technology for technology’s sake may be down, but
the need for technology that solves real business problems, and real human
problems, is stronger than it has ever been.
I come here today as a true believer that when the technology and ingenuity
and invention of companies like HP
and NEC is married to the vision of our customers, everything is possible.
And that’s really what I’d like to talk to you about today.
It has been said that the very nature of technology is the nature of
change. Many of you have been partners of NEC and HP
through all four waves of change that have swept the computing landscape
in its short history. From mainframes, to minis, to client-server networks,
to the Internetchange has been the name of the game. At the same
time, the demands placed on information technology, and on you as IT and
business professionalsare as great today as they have ever been.
We live in an age where it is virtually impossible for any business to
consistently predict what’s coming around the corner, short- or long-term.
It is not enough to be simply prepared for changecompanies today
have to move at the speed of change. And, as business is required to adapt
to change, your metrics as IT leaders change. You’re no longer rewarded
for stability; you’re rewarded for agility. You have to be able to adapt
your infrastructures more rapidly and deploy systems and applications
in near real time.
As IT managers, it means that you have to think about the creation of
content on one hand and then the management, the distribution, the networking,
the manipulation, the mining and, ultimately, the transformation of that
content into whatever form your users choose.
The old conventional wisdom of ‘‘never touch a running system’’ was effective
when processes remained stable over long periods of time, but in today’s
environment, none of you has that luxury. The problem is, many current
IT infrastructures were built to be stable, they were not built to react
quickly, to adaptwhich is one of the reasons why a survey of key
technology decision-makers in the United States found that the business
environment is changing seven times as fast as the underlying IT infrastructure
And yet, business cycles and business budgets no longer support specialized
or custom-built hardware and software to meet business computing needs,
which means you are pressed to do more with less. And of course, the real
trick of all this is that we have not even begun to see where this latest
technology revolution is going to take us, because the real transformation
we see happening in technology today is that physical processes are becoming
digital processes. We have gone through a phase of the Internet where
we thought everything was e-business, where the ability to purchase or
place orders over the Web was a big deal. But the real inflection point
of this industry is what happens when we start to digitize everything.
As a simple example of this, just stop and think about the changes being
wrought by digital photographysomething HP
knows something about. Digital photography is the embodiment of a physical
process into a digital process. What do you do when you use a traditional
camera? You take a picture, something physical happens on film, you physically
carry the film somewhere else, that film is developed through a physical,
chemical process, and then you end up with prints that you physically
distribute or mail. It is a pretty static process, and it doesn’t actually
allow you to do very much.
But now digital photography transforms that into a digital process. In
digital photography, you create content one time. You network it. You
manipulate it. You distribute it. You change it. You store it. And ultimately
when you’re ready, you transform it into physical contentand you
haven’t even stepped away from your desk or your home.
That same process transformation is going to happen in enterprise after
enterprise after enterprise. Just think about this: into a business environment
already changing at seven times the rate of underlying IT infrastructure
and applications, over the next three years, there will be more data created
than in the entire history of humanity. More data created in the next
three years, data that needs to be mined, analyzed, understood, stored,
networked, distributed, made useful and made into insight and information.
More data over the next three years than in the history of humanity…
Now, over and over again, many of our customers tell us they want partners
who come to the table with the depth, with the breadth, with the product
line, with the capability to address all of their needsend to end…
Partners who can help make all the pieces you already have work better
together. What you need are real answers, step by step by step, not a
U-turn, not a throw out and start over; step-by-step evolution of your
infrastructure, not the hottest box or the latest killer application.
And to us, this step-by-step approach is the essence of strategic partnershipsand
it is why we completed the merger with Compaq.
I have been asked many times: why did HP
make what was at the time a very controversial announcement: that we were
actually going to attempt the largest merger in the history of technology.
Why? Because we saw these trends, and we saw the opportunity to create
one great technology companythe world’s leading technology companya
company that can be a better partner for our partners like NEC and a better
partner for our customers.
We think we come today as a more complete partner for our clients and
our customerswith the capability to serve any institution, any community,
any customer, from a Fortune 10 to a micro-business to an individual consumer.
So let me tell you a little bit about the new HP
that NEC is partnered with today.
HP is 140,000 employees strong,
with over 6,000 employees here in Japan. We have employees in 160 countries
around the world, working in every time zone on Earth. It makes conference
calls a challengebut for a company that does nearly 60 percent of
its business outside the U.S., we think that having capabilities in 160
countries, doing business in 43 currencies, and 15 languages is an asset.
We have a stronger market position because we can offer our customers
and our partners more. We think it is an advantage to our customers and
our partners that we are now the market leader in the world in supercomputing,
the market leader in management software, the market leader in the world
in UNIX servers, and Windows servers, and Linux servers; that we are the
market leader in the world in storage, in workstations, in imaging and
printing, in laptopsand that we are among the leading companies
in the world in professional services.
Our portfolio runs from desktop to print shop, from palmtop pocket PC
devices to nonstop computing capabilities, from $49.99 USB PhotoSmart
photo printers to multi-million dollar commercial systems.
And we think the depth and breadth of our portfolio not only serves our
customer’s needs and our customer base; we think it is reflected in our
customers. Today, HP serves more
than 1 billion customers around the world. That means if you made a country
of all of our customers, it would be the third-largest country in the
We are actually in a lot of places that you see every day. The new HP
powers more than 100 stock and commodity exchanges, including 14 of the
world’s largest. We support 95 percent of the world’s securities transactions.
We help process two out of every three credit card transactions worldwide
and three out of every four electronic funds transfers. We handle 80 percent
of the mobile billing and customer care traffic in Asia and in Europe;
we help control 65 percent of the world’s energy infrastructure.
And we feel good about our ability to continue to innovate on behalf
of our customers and partners, because innovation and invention is our
lifeblood. We have 15,000 pre-sales and sales professionals, 65,000 service
and support professionals. We have doubled, as an example, the number
of employees we have here in Japan to over 6,000, and we have sales and
support centers here in Japan in more than 75 locations.
I mentioned that innovation and invention is our lifeblood. We have 17,000
patents today; we produce three new patents every working day. Those patents
spread from print technology to molecular computing. And as an example
of the fact that high tech can mean low cost: I mentioned a $49.99 USB
photo printer a few moments ago. That $49.99 printer has 100 patents associated
with it. A $79.99 printer has 29 patents associated with it, proving that
low cost does not mean low tech. Those 17,000 patents, generated at a
rate of 3 every working day, represent $4 billion in R&D spending
every yearand we believe it is vitally important to maintain that
level of R&D investment.
Finally, we are the number one partner for Microsoft, Intel, Accenture,
PeopleSoft, BEA, Oracle, Siebel, CGEY and BearingPoint, just to name several,
and we think that partnership position helps us fulfill what we believe
is one of the most important roles for HPto
galvanize all of these partners, and to bring the full power of this industry
to you and to your customers.
And among all those partnerships that I just mentioned, among the very
most important in the world is the relationship we have enjoyed with NEC
for over a decade.
In 1995, we began an HP-UX server OEM relationship, and since then, we
have expanded our partnership to include technology collaboration in hardware
and software, as well as sales collaboration to deliver large-scale solutions.
Together, we have developed a strong track record in providing open systems-based
mission critical solutions to our customers. And I think one of the reasons
our partnership works so well is because we are driven by a common vision
of technology, a vision where technology is more flexible, more cost-effective,
more open, more adaptive, and more scaleable for our customers.
In May of 2002, HP and NEC expanded
our partnership when we announced plans to collaborate in taking open
mission critical solutions to our customers in Japan and the U.S. And
I’m happy to report that that program is now well under way.
Of course, part of that agreement is predicated on us providing 24 hours
a day, 365 days a year operation and lightning-fast response to a changing
market. And today, it is my great honor and privilege to announce that
we are taking our partnership one step further.
Nishigaki-san and I, as well as other members of our teams, will be announcing
at a press conference later today that HP
and NEC are forming an alliance to jointly provide outsourcing services
to customers. We believe that HP’s
leadership in IT infrastructure services, combined with NEC’s expertise
in open, mission-critical systems, as well as our history of jointly delivering
comprehensive system integration offerings, will be a powerful incentive
for companies to make HP and NEC
their outsourcing partners.
Now, like all of our technology and services, we are focused less on
what we make for ourselves and more on what we make possible for our customers.
Frankly, we believe that the real storyline of this industry is being
written not just in what we can develop in our labs, but in what we can
make possible for consumers, for businesses, for governments, and for
our customers all around the world.
Ultimately, we know that if customers cannot see a clear linkage between
the return they get on their technology investment and their business
priorities and productivity, they simply won’t make the investment. And
likewise, we know that if consumers don’t have a good experiencewhat
we call a simple, rewarding experience, using our products, our services,
our technologythey won’t buy again.
We also know that the closer you look at what is going on, the more you
see a new breed of company that is emerging: companies that are making
the tough choices, that are streamlining, but that are not backing off
of their core missionand in the process, they are using technology
to solve real, often seemingly impossible problems.
So, let me just give you just a few examples of how some of our customers
are using HP and NEC combined servicesand
in some cases, HP services aloneto
improve business, or enhance life, or to build our future.
Here in Japan, for anyone who owns a mobile phone, if you hear the words
"i-mode", you immediately think of one company: NTT DoCoMo.
Last year, NTT DoCoMo announced plans to launch a next generation mission-critical
i-mode system to better serve more than 40 million subscribers, and to
provide an infrastructure scalable to manage millions more. But NTT DoCoMo
had one problem: DoCoMo's systems provider at that time could not provide
the support or the capacity to meet the enhanced needs of the next-generation
And so, NTT DoCoMo came to NEC and HP.
Together, we delivered more than 140 large-scale servers to more than
get the job done. When the new i-mode system launches in the spring of
2003, it will run on NEC's NX7000 series, which operates with an HP-UX
operating system, NEC's middleware platform "OpenDiosa," and
other global standard software. And by the time the new system is fully
deployed, it will total more than 300 serversit will be the largest
scale open mission critical system in the world.
Now, let me, as another example, move from a company's services to a
I just came from Hong Kong. Back in 1998, the government of the Hong
Kong’s special Administrative Region launched an initiative to make the
city a digital hub of Asia. Dubbed the “Digital 21 IT Strategy,” the effort
began by building up Hong Kong's administrative infrastructure and encouraging
the growth of the city's information technology industry.
And then, the Hong Kong government set out to do what any business seeking
to become a player in an e-business world would do: they built a Web portal.
An in Hong Kong's case, a portal that delivered online services to its
6.8 million citizens around the clock, 24 hours a day, 356 days a yearall
while saving money at the same time.
Now, to build and maintain the Electronic Service Delivery system, as
it’s called, the Hong Kong government selected a partnership that included
HP. Since the project began officially
in 1999, HP has provided e-infrastructure
products, services and solutions to the joint venture. And among our contributions,
we also provide project management for the deployment of information kiosks
around Hong Kong's public spaceswhich not only increases convenience,
but increases access for citizens who don't have access to the Internet
in their home or office.
We launched the portal in December of 2000, and today, Hong Kong's millions
of citizens can access more than 130 types of public services from more
than 40 government departmentsand those services range from applying
for a business permit to booking a marriage date or signing up for volunteer
work. And so today, Hong Kong is one of the first governments in the world
to operate on its citizens' scheduleand not ask its citizens to
operate on the government’s schedule.
And finally, as one more example of what our technology is making possible,
let me give you an example that scales all borders.
In the United States, the challenge that NASA, the National Aeronautic
and Space Administration, faces today, is that they send brilliant minds
into space and then they have to bring them back home. And so, there isn’t
a lot of room for error in that process. HP
has the honor of being one of NASA's technology partnersour role
is to get the astronauts home safely, so NASA can focus on its real mission:
which is to explore and to discover and to inspire.
Our technology handles the communication between the Space Shuttle and
mission control from the moment the shuttle lifts off, to the moment it
touches down. And, of course, reliable computer systems are an absolutely
critical component in this whole operationso much so that during
the famous Apollo missions, the computer was referred to as "the
So, I just gave you three examples of what three organizationsNTT
DoCoMo and the Hong Kong government and NASAare achieving with technology.
So where do we go from here? The organizations that I just mentioned
are focused not simply on technology itself, but on what technology makes
possible. I think as business customers, you have made your agenda clear:
what you need most is straight talk, practical solutions, and partners
you can trust.
You want to lower your operating costs; you want to lower your acquisition
costs; you want the freedom to incorporate the best technology and services
from anyone; you want infrastructure that will flex and change and adapt
to your business requirements; you don’t want to have to start over, you
want to make progress step by step; and you want a tight link between
your business and your IT systems. And, above all, I think you want immediate
information and insight so that you can take intelligent action.
And all of that requires evolving your existing infrastructure, not throwing
it out and starting overevolving your existing infrastructure that
you've already built and invested in. But that existing infrastructure
must evolve into a more adaptive infrastructure, a more manageable infrastructure,
a better utilized infrastructure, a more cost-effective infrastructure.
A truly adaptive infrastructure is one that satisfies your requirements
exactly, every second of the day. That is when you know you're getting
the most out of your infrastructure and the most out of your investment.
And every step of the way at HP,
we are focused on redefining the value proposition for information technologyimproving
the value of information technology. We are focused on delivering the
best, total return on information technology.
So what does that mean?
It means first lowering your cost of acquiring technology, which is why
you'll see HP continue to invest
in high-tech, low-cost. You will see us continue to invest heavily to
ensure that our product line is the most modular, the most standards-based
in the industry, because standards and modular design give you choice,
give you flexibility and improve your overall cost of ownership.
You'll see us adhere to an engineering paradigm that is firmly rooted
in our belief that a diverse, a heterogeneous technology landscape can
workand work better, because heterogeneity serves your needs.
It's why you'll see us extend our lead in Windows, in UNIX, in Linux
platforms, and extend our lead in modular architectures like blades and
cell boards, as well. It's why we will lead the advancement and the management
of both .Net and J2EE in the emerging web services world, because our
customers tell us that is what they want and need to create an infrastructure
that can adapt in real time.
But it’s not only about lowering your technology acquisition costs; it’s
also about lowering your technology operating costs. In other words, to
make it easier for you to manage the assets you already have, and the
assets you will invest inwhich is why you'll see us continue to
invest in virtualization, so that you can achieve better capacity utilization
in servers, better utilization in storage, better utilization across the
entire data center. It's why you'll see that our approach to the best
return on information technology includes PCs, handhelds, wireless devices
and printing infrastructure, as well as servers and storage and software
and data centersbecause your entire infrastructure must be adaptive,
and your entire infrastructure must be digital, from desktop to print
shop, from desktop to data center.
It’s not only about lowering your acquisition costs, or lowering your
management costs, it’s also about managing the infrastructure truly end-to-end.
And that is our third important goal in delivering the best return on
information technology. That is why we have put more investment in OpenView,
which is the console that lets you see in one view all of the resources
in your IT environment from end-to-end, inside and outside, so you know
how to shift resources to best handle the demands of business. It's the
foundation and the key to building an adaptive infrastructure that truly
flexes with changes in your business activity. And, just as an example
of OpenView’s leading position in the market place, today 100 percent
of the Fortune 50 use OpenView.
Fourth, it's about providing the services that fundamentally improve
your return on investment, your return on information technology. It’s
about lowering the cost of acquiring technology, lowering the cost of
managing technology, enabling you to manage your infrastructure truly
on an end-to-end basis, and fourth, providing the services that improve
your return on investment. So we focus all of our 65,000 services professionals
on being the industry's experts on adaptive infrastructure. And we're
pioneering new methodologies and new services in IT consolidation, in
optimizing heterogenous environments, in mission-critical services, in
enterprise Microsoft, in on-demand infrastructure solutions. And again,
we’re focused on optimizing the infrastructure all the way out to the
mobile solutions and the handheld devices.
Ultimately, we think for you it is also about freedom of choice. One
of the key reasons we have built this company called HP
was to combine enough of the key elements of an enterprise infrastructure
under one roofso that we could, quite literally, speed implementation
for our customers. So we now have within our scope, the leadership products
and technologies required to truly redefine the IT value proposition for
business, to actually deliver the best return on information technology.
But importantly, we do not wish to control you. We do not wish to lock
you in. We do not wish to limit your choices. In fact, the essential difference
between HP and our competition is
that perhaps because of our engineering orientation, perhaps because of
our DNA as a company, we believe partnership, as much as innovation, is
our lifeblood: our partnership with our customers, and our partnership
with others in the industry who serve you, like NEC.
We believe it's our job to make sure that you always have access to the
best talent and the best innovation. In some cases, that will be our talent
and our innovation, specifically in the places where we think we can make
a valued contribution, areas like management, interoperability, utilization,
software and services. Areas like computing as a utility, imaging technologies,
mobility, secure and trusted systems, and consumer connectivity. And in
other cases, the best talent and innovation will come from our valued
partners who also will bring their talent and capability to our customers.
I started today by saying that I have every reason to be hopeful about
the prospects for our industry, and I gave you a few examples of how customers
are using technology today to do things that were not possible previously,
and would not be possible without the application of technology. And so
I think if we can get beyond the doom and gloom of the current headlines,
headlines that we've grown accustomed to in some ways in the past few
yearswe’ll see a world where technology is more ubiquitous, more
accepted, more purposeful, more promising and more woven into the fabric
of our businesses and our lives and driving more change than technology
ever has before.
At HP, the idea that we can make
more things more possible for more people in more places represents our
highest aspiration. It represents, as well, our most practical goals and
our highest aspirations as a company and as a partner. We believe it is
at the intersection of practice and promise that you will find the new
Thank you very much for your attention, and please enjoy the rest of
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