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Hewlett-Packard Company, (HP)

The Hewlett-Packard Company, commonly known as HP, is currently the world's largest information technology corporation and is known worldwide for its printers and personal computers. Headquartered in Palo Alto, California, United States, it has a global presence in the fields of computing, printing, and digital imaging, and also provides software and services. The company which once catered to engineering and medical markets now markets to households with products such as cameras and ink cartridges found in grocery and department stores.

HP posted US$91.7 billion in annual revenue in 2006 compared to US$91.4 for IBM, making it the world's largest technology vendor in terms of sales. HP is now the No. 1 ranking company in worldwide personal computer shipments, surpassing rival Dell, market research firms Gartner and IDC reported in October 2006; per Gartner, the gap between HP and Dell widened substantially at the end of 2006, with HP taking a near 3.5% market share lead.

Company history

Bill Hewlett and Dave Packard both graduated from Stanford University in 1934. The company originated in a garage in nearby Palo Alto while they were post-grad students at Stanford during the Great Depression.

The partnership was formalized on January 1, 1939 with an investment of $538. Dave won the coin toss but named their electronics manufacturing enterprise the "Hewlett-Packard Company."

Of the many projects they worked on, their first financially successful product was a precision audio oscillator, the Model 200A. Their innovation was the use of a small light bulb as a temperature dependent resistor in a critical portion of the circuit. This allowed them to sell the Model 200A for $54.40 when competitors were selling less stable oscillators for over $200. The Model 200 series of generators continued until at least 1972 as the 200AB, still tube-based but improved in design through the years. At 33 years, it was perhaps the longest-selling basic electronic design of all time.

One of the company's earliest customers was The Walt Disney Company, who bought eight Model 200B oscillators (at $71.50 each) for use in certifying the Fantasound surround sound systems installed in theaters for the movie Fantasia.

 

Focus

The company was originally rather unfocused, working on a wide range of electronic products for industry and even agriculture. Eventually they elected to focus on high-quality electronic test and measurement equipment. Throughout the 1940s to well into the 1990s the company focused on making signal generators, voltmeters, oscilloscopes, counters, and other test equipment. Their distinguishing feature was pushing the limits of measurement range and accuracy. For instance, almost every HP voltmeter or signal generator has one or more extra clicks of its knobs than its competitors. HP volt- or ammeters would measure down and up an extra 10 to 100 times the units of other meters. Although there were good reasons why competing meters stopped at 1 volt full scale, HP engineers figured out ways of extending the range of their equipment by a considerable amount. They also focused on extreme accuracy and stability, leading to a wide range of very accurate, precise, and stable frequency counters, voltmeters, thermometers, and time standards.

 

The sixties and seventies

HP is recognized as the symbolic founder of Silicon Valley, although it did not actively investigate semiconductor devices until a few years after the "Traitorous Eight" had abandoned William Shockley to create Fairchild Semiconductor in 1957. Hewlett-Packard's HP Associates division, established around 1960, developed semiconductor devices primarily for internal use. Instruments and calculators were some of the products using these devices.

HP experimented with using Digital Equipment Corporation minicomputers with its instruments. But after deciding that it would be easier to buy another small design team than deal with DEC, HP entered the computer market in 1966 with the HP 2100 / HP 1000 series of minicomputers. A simple accumulator-based design, with registers arranged somewhat similarly to the Intel x86 architecture still used today, it would last 20 years and several attempts to replace it. It would give birth to the HP 9800 and HP 250 series of desktop and business computers, which predated the PCs by nearly a decade. The HP 3000 was an advanced stack based design for business computing server later redesigned with RISC technology that has only recently been retired from the market. The HP 2640 series of smart and intelligent terminals introduced forms-based interfaces to ASCII terminals, and screen labeled function keys now commonly used on gas pumps and bank ATMs. Although scoffed at in the formative days of computing, HP would eventually surpass even IBM as the world's largest technology vendor in sales.

HP is acknowledged by Wired magazine as the producer of the world's first personal computer, in 1968, the Hewlett-Packard 9100A.[2] HP called it a desktop calculator because, as Bill Hewlett said, "If we had called it a computer, it would have been rejected by our customers' computer gurus because it didn't look like an IBM. We therefore decided to call it a calculator, and all such nonsense disappeared." An engineering triumph at the time, the logic circuit was produced without any integrated circuits; the assembly of the CPU having been entirely executed in discrete components. With CRT readout, magnetic card storage, and printer the price was around $5000.

The company earned global respect for a variety of products. They introduced the world's first handheld scientific electronic calculator in 1972 (the HP-35), the first handheld programmable in 1974 (the HP-65), the first alphanumeric, programmable, expandable in 1979 (the HP-41C), and the first symbolic and graphing calculator HP-28C. Like their scientific and business calculators, their oscilloscopes, logic analyzers, and other measurement instruments have a reputation for sturdiness and usability (the latter products are now part of spin-off Agilent's product line). The company's design philosophy in this period was summarized as "design for the guy at the next bench".

 

The eighties and beyond

In 1984, HP introduced both inkjet and laser printers for the desktop. Along with its scanner product line, these have later been developed into successful multifunction products, the most significant being single-unit printer/scanner/copier/fax machines. The print mechanisms in HP's tremendously popular LaserJet line of laser printers depend almost entirely on Canon's components (print engines), which in turn use technology developed by Xerox. HP develops the hardware, firmware, and software that convert data into dots for the mechanism to print.

In the 1990s, HP expanded their computer product line, which initially had been targeted at university, research, and business customers, to reach consumers. Later in the decade HP opened hpshopping.com as an independent subsidiary to sell online, direct to consumers; the store was rebranded "HP Home & Home Office Store" in 2005. HP also grew through acquisitions, buying Apollo Computer in 1989, Convex Computer in 1995, and Compaq in 2002. Compaq itself had bought Tandem Computers in 1997 (which had been started by ex-HP employees), and Digital Equipment Corporation in 1998. Following this strategy HP became a major player in desktops, laptops, and servers for many different markets.

In 1987, the Palo Alto garage where Hewlett and Packard started their business was designated as a California State historical landmark.

In 1999, all of the businesses not related to computers, storage, and imaging were spun off from HP to form Agilent. Agilent's spin-off was the largest initial public offering in the history of Silicon Valley. The spin-off created an $8 billion company with about 30,000 employees, manufacturing scientific instruments, semiconductors, optical networking devices, and electronic test equipment for telecom and wireless R&D and production. Also in July 1999, HP appointed Carly Fiorina as CEO. Fiorina was the first woman ever to serve as CEO of a company included in the Dow Jones Industrial Average. Fiorina was forced to resign on February 9, 2005.HP has a successful line of printers, scanners, digital cameras, calculators, PDAs, servers, workstations, and home-small business computers. HP today promotes itself as not just being a hardware and software company, but also one that offers a full range of services to architect, implement and support today's IT infrastructure.

Imaging and Printing Group (IPG)

According to HP's 2005 U.S. SEC 10-K filing,[3] HP's Imaging and Printing Group is "the leading imaging and printing systems provider in the world for printer hardware, printing supplies and scanning devices, providing solutions across customer segments from individual consumers to small and medium businesses to large enterprises." This division is currently headed by Vyomesh Joshi.

Products and technology associated with the Imaging and Printing Group include:

 

Personal Systems Group

HP's Personal Systems Group is "one of the leading vendors of personal computers ("PCs") in the world based on unit volume shipped and annual revenue."[3]

Personal Systems Group products/technology include:

  • Consumer PCs including the HP Pavilion, Compaq Presario and VoodooPC series.
  • Workstations for Unix, Windows and Linux systems.
  • Handheld Computing including iPAQ Pocket PC handheld computing devices
  • Digital Entertainment including DVD+RW drives, HP Movie Writer and HP Digital Entertainment Center. HP resold the Apple iPod from HP until November 2005.[3]

 

Technology Solutions Group

In HP's financial reporting, HP groups its Enterprise Storage and Servers, HP Services and Software under Technology Solutions Group.

HP's Enterprise Storage and Servers Group has product/technology including:

HP's Software division has products/technologies:

 

HP Labs

HP Labs (or HP Laboratories) is the research arm of HP. Founded in 1966, HP Labs' function is to deliver breakthrough technologies and to create business opportunities that go beyond HP's current strategies. An example of recent HP Lab technology includes the Memory spot chip.

 

Partnerships

HP is a supporter of FOSS and Linux. Some HP employees, such as Linux CTO and former Debian Project Leader Bdale Garbee actively contribute and have Open Source job responsibilities. Many others participate in the Open Source community as volunteers. HP is also known in the (GNU/)Linux community for releasing drivers for many of their printers under the GNU GPL.

Hewlett-Packard also works extensively with Microsoft and uses technology from most major software and hardware vendors.

Until November 2005, HP offered a re-branded version of the Apple iPod.[3]

Hewlett-Packard partners with many application software companies, for example SAP AG.

 

Sponsorships

HP has many sponsorships. One well known sponsorship is Walt Disney World's EPCOT Park's Mission: Space. Others can be found on Hewlett-Packards Website [3] From 1995 to 1999 they were the shirt sponsor of English Premier League club Tottenham Hotspur.

 

Product Legacy

Agilent Technologies, not HP, retains the direct product legacy of the original company founded in 1939. Agilent's current portfolio of electronic instruments are descended from HP's very earliest products. HP entered the computer business only after its instrumentation competencies were well-established. Agilent was spun off from HP in 1999.

 

Culture

The founders, known to friends and employees alike as Bill and Dave, developed a unique management style that has come to be known as the HP Way. In Bill's words, the HP Way is "a core ideology . . . [that] includes a deep respect for the individual, a dedication to affordable quality and reliability, a commitment to community responsibility, and a view that the company exists to make technical contributions for the advancement and welfare of humanity."[6]

The HP Alumni Association maintains a tribute to Bill and Dave's version of the HP Way, circa 1992.[7]

 

Trivia

Bill Hewlett and Dave Packard tossed a coin to decide whether the company they founded would be called Hewlett-Packard or Packard-Hewlett. Packard won, as stated previously.

HP spun off a small company, Dynec, to specialize in digital equipment. The name was picked so that the HP logo "hp" could be turned upside down to be the logo "dy" of the new company. Eventually Dynec changed to Dymec, then was folded back into HP.

HP partnered in the 1960s with Sony and the Yokogawa Electric companies in Japan to develop several high-quality products. The products were not a huge success, as there were high costs in building HP-looking products in Japan.

Just about every HP product in the test equipment line was labeled with three to five digits followed by the letter "A". Improved versions went to suffixes "B" through "D". A small handful of products somehow got bizarre model numbers, such as the "H201-20" microwave signal generator.

Steve Wozniak originally designed the Apple I computer while working at HP, but they turned down his offer of licensing the design to HP.

HP products were usually very rugged, with clean styling, top notch components, and with conservative specifications, so customers were usually pleasantly surprised when the equipment looked and worked better than expected. There were a few missteps, however:

  • In the 1960s they briefly went to painting their equipment a light lavender color.
  • In the early 1970s they started a line of "lower cost" test equipment with atrociously ugly and flimsy plastic cases. The cases also got a bad case of 1970s colors, coming out in dark shag rug green and burnt orange.
  • On test equipment made in the 1980s a common problem was flimsy knobs that easily broke off.
  • A very few innovative but malfunctioning products, such as the original HP 3000 computers, had to be recalled for extensive reworking.

 

Management

 

History

 

Diversity

Hewlett-Packard received a 100% rating on the Corporate Equality Index released by the Human Rights Campaign starting in 2003, the second year of the report. In addition, the company was named one of the 100 Best Companies for Working Mothers in 2004 by Working Mothers magazine.

Hewlett-Packard is also involved in the NEPAD e-school program to provide all schools in Africa with computers and internet access.

 

Ad campaigns

Hewlett-Packard has used a number of innovative commercials to sell its products.

 

The Computer is Personal Again

In May 2006, the company launched a new campaign designed to bring back the fact that the PC (Personal Computer) is a personal product. The campaign utilized viral marketing, sophisticated visuals, and its own web site.[8] Some of the ads featured well-known personalities - Pharrell, Mark Burnett, Mark Cuban, Jay-Z, Shaun White, and Santa Claus (voiced by Tim Allen, who plays him in The Santa Clause film trilogy). Rather than show a bunch of talking heads, each advertisement showed a neck-down view in which the endorser, aided greatly by graphics, visually showed how they used HP products. All these personalities weren't paid millions of dollars but brought a deal with HP to sponsor their or a selected charity group.

Two months after having created The Computer Is Personal Again, Dell followed up with its own campaign entitled "Purely You", which seems to piggyback off the HP idea.

 

You + HP: digital photography

A television ad campaign for Hewlett-Packard's digital photography (titled "You + HP: digital photography") has been noted for its simple special effects and choice of music. It won "Campaign of the Year" from Adweek magazine in 2004.[9]

Songs used in "You + HP" Campaign:

 

Acquisitions

Here are summaries of a few of the dozens[10]of companies and product lines acquired by HP over the decades:

 

Data Systems, Inc.

A small 5-person company called Data Systems, Inc. Owned by a chemical manufacturer, Union Carbide, who failed in their diversification efforts, HP bought the group and this helped to launch the HP 2116A in 1966. A computer designed to automate the collection and processing of data from the company’s test and measurement devices, it marked HPs entry into the growing computer industry.

 

Apollo

In 1989, HP Acquired Apollo computer for $476 million. HP was able to achieve a growth in market share after the merger; with the market at the time valued at $4.1 billion and the fastest-growing area of the market.

 

CGNZ

In 2005, HP acquired CGNZ the New Zealand spin-off of Capgemini for an undisclosed amount. The CGNZ acquisition accelerated HP's moves into business consulting.[11]

 

Convex Computer

In 1995, HP acquired Convex Computer, a Richardson, Texas company that produced vector minisupercomputers and supercomputers. The systems had software compatibility with HP's PA-RISC computers and provided an immediate upgrade path. The first 32-CPU V-class systems were shipped in 1998 as a replacement for HP's aging 12-CPU T-class.

 

Verifone

On April 23, 1997, HP announced plans to acquire VeriFone, a provider of card-swipe terminals on retail countertops to approve purchases, in a $1.18 billion stock swap. On May 10, 2001, Gores Technology Group acquired VeriFone from HP.

 

Dazel Corporation

On June 7, 1999, HP acquired Dazel Corporation, located in Austin, Texas, an output management software company

 

Bluestone

On January 18, 2001, HP acquired Bluestone Software, Inc., a leading provider of B2B, B2C, and wireless open platform solutions.

 

Indigo

On March 22, 2002, HP acquired Indigo N.V,[12] a leader in digital offset color printing systems. Now the HP Indigo division is manufacturing commercial and specialty digital printers.

 

Compaq

On May 3, 2002, Hewlett-Packard merged with Compaq Computer Corporation, a controversial move intended to make the company the personal computing leader. The merger opposition was led by Walter Hewlett, son of HP founder William Hewlett; and by David Woodley Packard, son of co-founder David Packard.

 

PipeBeach

On August 23, 2003, HP acquired PipeBeach to strengthen its leadership in the growing VoiceXML interactive voice market.

 

SelectAccess

On September 19, 2003, HP acquired SelectAccess, a provider of access management solutions based in Toronto Ontario, Canada, from Baltimore Technologies as the first step towards an Identity management offering.

 

TruLogica

On March 11, 2004, HP agreed to acquire TruLogica, a privately held provider of IT user-provisioning software in Dallas, Texas, USA, to integrate with the Identity management portfolio.

 

Novadigm

On April 2, 2004, HP acquired Novadigm which provides comprehensive management products to integrate with the HP Software management software portfolio. This desired-state technology enables enterprise customers to put their error-prone, repetitive and reactive IT management tasks on cruise control – ensuring that the right resources are automatically reallocated, tuned and configured to meet business needs.

 

Snapfish

On April 15, 2005, HP acquired Snapfish, a leading online photo service based in San Francisco, California, USA.

 

AppIQ

In October 2005, Hewlett-Packard acquired the private company AppIQ (short for "Application IQ"). The company was founded in 2001 by Ash Ashutosh and David Chang, and offered several digital storage solutions. The company had employed up to 235 people by June 2005.

 

Trustgenix

On November 30, 2005, HP announced that it has signed a definitive agreement to acquire Trustgenix, Inc., a leading provider of federated Identity management solutions based in Santa Clara, California.

 

Peregrine Systems

On December 19, 2005, HP completed the acquisition of Peregrine, Inc, based in San Diego, California, USA. The acquisition adds leading asset management and enhanced IT service management capabilities to the HP OpenView management portfolio, providing customers with comprehensive IT asset control and business insight.

 

OuterBay

On February 7, 2006, HP agreed to acquire OuterBay, a leading provider of archiving software for enterprise applications and databases. OuterBay is headquartered in Cupertino, California, USA, with offices in the US, UK, and India.

 

Silverwire

On June 6, 2006, HP announced it was acquiring Silverwire Holding AG, a commercial digital photography solutions and software provider with a strong presence in the retail photo market. Silverwire is headquartered in Zug, Switzerland.

 

VoodooPC

On September 28, 2006, HP announced it will expand its presence in the gaming market by acquiring VoodooPC, a maker of high-performance gaming, luxury, and entertainment PCs based in Calgary, Alberta, Canada. This acquisition closed early in November 2006.

 

Mercury Interactive

On November 7, 2006, HP announced that it had completed the acquisition of Mercury Interactive (MERQ.PK), a company that provided Business Technology Optimization software (i.e. software that helps a company govern, develop and maintain its technology stack).

 

Knightsbridge Solutions

On December 12, 2006, HP announced that it was acquiring Knightsbridge Solutions, a Business Intelligence / Data Warehousing consultancy based out of Chicago.[4]

 

Bitfone

On December 20, 2006, HP announced that it has signed a definitive agreement to purchase Bitfone Corp., a privately held global software and services company that develops software solutions for mobile device management for the wireless industry.

 

Bristol Technology

On February 5, 2007, HP announced that it has signed a definitive agreement to acquire Bristol Technology Inc., a leading provider of technologies that monitor business transactions. Bristol is a private company based in Danbury, Connecticut.

 

Polyserve

On February 27, 2007, HP announced that it has signed a definitive agreement to acquire PolyServe, Inc., a leading provider of storage software for application and file serving utilities. Founded in 1999, PolyServe is headquartered in Beaverton, Ore., has 117 employees and serves more than 500 customers in a variety of industries including finance, energy and technology. Financial terms of the transaction were not disclosed. HP had an existing relationship with the company OEMing some of their products as the HP StorageWorks Enterprise File Services Clustered Gateway.

 

Tabblo

On March 22, 2007, HP announced it has signed a definitive agreement to acquire Tabblo Inc., a privately-held developer of web-based software located in Cambridge, Mass.

HP plans to leverage Tabblo’s technologies to make printing from the web easier and more convenient than it is today. Tabblo’s technology allows people to simply and efficiently arrange and print text, graphics and photos from the web. This is made possible by Tabblo’s custom template engine, using an AJAX-enriched interface.

HP plans to make this simple-to-use web-printing experience broadly available to people by working with other companies to integrate the technology into their websites. Together, HP and its partner companies will provide customers with a vastly improved web-based printing experience to meet the ever-growing need for simplified Internet-based printing.

 

Competitors

Major competitors of HP in the computer business include Apple Inc., Dell, Gateway, Lenovo (Purchased IBM's Non-server Personal Computer Business), Sony and Toshiba. Major competitors of HP in the server business include Sun Microsystems, IBM and Dell. Major competitors of HP in the printer business include Brother, Canon, Epson, Lexmark and Dell (who rebrands and repackages Lexmark products). Upon acquiring Voodoo PC, HP and its newest subdivision will compete in the enthusiast market against Falcon Northwest, Alienware (A division of Dell), WidowPC and other manufacturers.

 

HP pretexting scandal

On September 5, 2006 Newsweek published a story revealing that the chairwoman of HP, Patricia Dunn, had hired a team of independent electronic-security experts that later spied on HP board members and several journalists, to determine the source of leak of confidential details regarding HP's long-term strategy in January, 2006. They used a technique known as pretexting to obtain call records of HP board members and nine journalists, including reporters for CNET, the New York Times and the Wall Street Journal. Dunn has claimed she did not know beforehand the methods the investigators used to try and determine the source of the leak.[14] Board member George Keyworth was ultimately outed as the source.

On September 12, 2006 Keyworth resigned and HP announced that Mark Hurd, the current CEO, would replace Dunn as Chairman after the HP board meeting on January 18, 2007.

On September 22, 2006 Hurd announced at a special press conference that Ms. Dunn had resigned effective immediately from both the Chairmanship and the Board;

On September 28, 2006, Ann Baskins, HP's general counsel (head attorney) resigned hours before she was to appear as a witness at which she would later invoke the Fifth Amendment to refuse to answer questions.

On October 3, 2006, it was announced that Dunn would undergo chemotherapy to treat stage 4 ovarian cancer.

 

Investigation by the government

On October 4, 2006, California Attorney General Bill Lockyer filed criminal charges and arrest warrants against Kevin Hunsaker, Dunn and three outside investigators. On September 11, 2006, the United States House Committee on Energy and Commerce wrote to Patricia Dunn stating that they have been conducting an investigation on Internet-based data brokers who allegedly use "lies, fraud and deception" to acquire personal information, and allow anyone who paid a "modest fee" to acquire "itemized incoming and outgoing call logs", and when had learned about HP's use of pretexting through their September 6 SEC filing and through their own inquiry of HP's Nominating and Governance Committee, stating they are "troubled" by the information, "particularly that it involves HP—one of America's corporate icons."

The committee requested, under Rules X and XI of the United States House of Representatives, information from HP by September 18, 2006:

At the September 28, 2006 hearing, Dunn and Hurd both testified extensively about the investigation. Dunn testified that until June or July 2006, she did not realize that "pretexting" could involve identity misrepresentation. Dunn repeatedly insisted that she had believed that personal phone records could be obtained through legal methods.

Other witnesses refused to answer questions due to the ongoing criminal investigations.

Controversy

Calculators

In March 2002, HP announced that it would no longer manufacture financial and scientific calculators – a product line and, indeed, a market, that HP had started thirty years before. HP later recanted and stated in a press release, "The bottom line is that HP calculators are here to stay and they are going to be better than ever, giving our customers more than ever." The extremely popular HP-12C financial calculator, introduced in 1981, still remains in production today.

Outsourcing

In 1994, HP decided to outsource its manufacturing to third-party vendors and overseas countries in order to lower costs and raise profits. Today, desktop computers are assembled in Guadalajara, Mexico where HP employs approximately 1,500 workers. Notebook computers are assembled in China from third-party vendors. Servers and workstations are still assembled in the United States.

In 2003, HP had 140,000 employees world wide. Under HP's current restructuring program, HP began reducing its workforce to lower its costs. By 2006, HP experienced a record profit of $1.5 billion in just one quarter.

HP and the environment

HP has been criticized by Greenpeace, among others. Greenpeace and other environmental groups have alleged HP of poor environmental standards, specifically in relation to the elimination of hazardous substances from products as specified by the European Union's RoHS guidelines for brominated flame retardants and PVC. Greenpeace is also accusing HP of not doing enough to recycle computers and other technology equipment.[29]

Greenpeace's criticism of the technology industry is not limited exclusively to HP, as competitors such as Dell and Apple have also come under fire for alleged similar practices.

All electronics companies are under pressure from the European Union's Restriction of Hazardous Substances Directive (RoHS) to limit the use of certain hazardous materials in the manufacture of electronic and electrical equipment.

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