HP Severing Mainframe Ties and Celebrating the Unplugging of Operational Computing Monolith

Business Wire, May 17, 1996

PALO ALTO, Calif.--(BUSINESS WIRE)--May 17, 1996--Hewlett-Packard Company today announces it has severed its dependency on the mainframe computing paradigm, becoming the largest company in the world running its mission-critical applications exclusively on distributed open-systems platforms over the world's largest Intranet.

During a midday celebration in honor of the event, Lewis E. Platt, HP chairman, president and chief executive officer, addressed a large group of employees who were instrumental in the success of the transition away from mainframes. Platt also performed a ceremonial unplugging of the water-cooled, monolithic machine in the Palo Alto data center.

"We are here today to celebrate a milestone in HP history. Our high-performance business servers now run all of HP's mission-critical operations -- a huge achievement given the size of our company," said Platt. "The IT organization did an exceptional job maintaining its high level of service while keeping up with rapid growth throughout the transition period."

Thirty applications were migrated from a mainframe in fewer than 28 months during the most recent phase of the transition, including HP's most mission-critical applications, such as order processing, purchase agreements and payroll.

"The $8 million in yearly maintenance savings generated by this unplugging alone can be well spent preparing our people and infrastructure for a future of virtual offices and knowledge networks," said Robert P. Wayman, HP executive vice president finance and administration and chief financial officer. "The $25 million to $30 million additional annual savings from implementing our PC common operating environment over our Intranet allows us to invest more for HP's future."

HP's PC common operating environment (PC-COE) provides a standard set of desktop applications for its users worldwide, reducing maintenance and administration costs while providing a predictable desktop environment from PC to PC.

Less than a decade ago, the common thinking was that companies of any size at all had to run mission-critical applications on mainframe machines. HP now runs its business operations only on distributed, open systems; many of HP's customers are doing the same.

"We were one of HP's first mainframe-alternative customers," said Larry Panatera, vice president and chief information officer for Snap-on, Inc. "We know the complexities of moving business processes, computing technologies and, most importantly, people's skills and attitudes. Given its size, we admire HP for being able to achieve such an important milestone in the evolution of its IT infrastructure. Congratulations, HP!"

"The mainframe-based data center was a comfort zone for me and my co-workers," said James A. Murphy, manager of the Mainframe Alternative and Open Warehouse programs with the HP General Systems Division. Murphy led the final phase of HP's IT project culminating in the "unplug." "But we realized that in order for HP to keep its competitive edge and respond more quickly to customer and market demands, this was something we just had to do. This new flexible infrastructure allows us to reduce costs and upgrade performance. It also lets us improve business decision-making by enabling us to build a more affordable and responsive data warehouse."

"This 'unplug' celebration is a tribute to HP's people as much as it is to HP's technology," said Robert R. Walker, HP vice president and chief information officer. "This is the crowning achievement of our systematic approach to obtain true, open enterprise computing. HP entrusts its business future completely to its people and to open, client/server computing. This is just a beginning for the benefits we will realize from this transition."

HP's decision to move to an open computing paradigm positions the company to take full advantage of Internet technology. HP's Intranet, serving 90,000-plus employees at more than 400 sites, is believed to be one of the world's largest internal, private networks. HP's Intranet environment includes the following:

-- 84,000 PCs running the same core software applications;

-- 23,000 UNIX(R) system desktops;

-- 6,000 servers;

-- 1,600 Web servers; and

-- Netscape on 60,000 desktops.

HP believes that its ability to respond quickly to business trends is key to continued success for its customers, its partners and itself.

"We are happy to know that HP will be running its entire business operations in a distributed, client/server environment," said Vipin K. Suri, vice president at Ontario Hydro Shared Services. "The fact that they are willing to share their experiences is important to us as we move forward in our own transition plans."

HP is the second-largest computer supplier in the United States, with computer-related revenue in excess of $25.3 billion in its 1995 fiscal year.

Hewlett-Packard Company is a leading global manufacturer of computing, communications and measurement products and services recognized for excellence in quality and support. HP has 105,200 employees and had revenue of $31.5 billion in its 1995 fiscal year.