Building a new corporate culture: Hewlett-Packard

Area Development Site and Facility Planning, May 2000

Profit is derived from the coincidence of e-services, appliances, and infrastructure, with the correct company culture essential to growth and performance.

I believe we are at a critical juncture in the Net. The Net has spawned thousands of IPOs; it has created huge market cap; it has made many companies very successful. It has caused many other companies to question their whole value proposition.

Despite all of that, the Net hasn't lived up to its hype. I believe the challenge for our industry now at the dawn of the new millennium is this: Either the Net remains elite, remains the purview of the technology geeks or it becomes pervasive, intimate, friendly, useful. The challenge is about the culture in our companies as we wrestle with what's next on the Net.

A New Culture

I believe that for companies to succeed in this new era, to really fulfill the promise of the Net, they must build a new culture. And I believe that new culture has to be based on three very fundamental things:

1 First, it must be a company of radical ideas, one that knows how to incubate ideas and encourages creative solutions to all kinds of problems.

2 Second, I think this culture requires inventiveness, and inventiveness is really about the spirit and the capabilities to take those radical ideas and execute them flawlessly and quickly.

3 Finally, this very important cultural shift requires synthesis, balance.

Three years ago when the Net really started, we lived in an either/or world. You were either a dot.com or a brick-and-mortar company. The truth is, I think both the dot.coms and the brick-and-mortar companies are learning from each other. And it is the companies that balance those two things that will be successful.

Think about what dot.coms are doing today: talking about those things that used to be Old Guard talk, missioncritical systems. And the brick-and-mortar companies have moved beyond the recognition of websites and started to talk about the recognition that the Net is really about any kind of information, anywhere, useful to anyone.

Service-Driven

Of course, there's more to this story. No matter what kind of company you are, profit is going to be driven by services. And I believe that this is the end of the pure product era. Products become much more useful when they're surrounded by service.

Automotive dealers are beginning to understand that the car is a platform for delivering services. Whether those services are in-car navigation, emergency roadside, or telecom, the car has become a product for delivering services. It is through the combination of the product and the service that revenue and profit are being made.

All over the world, corporations are starting to think about turning processes into digital services. These companies are realizing that services drive the customer experience, as well as the fact that the money and the profit are there. The challenge is to think about how to make money from e-services: which to create, where to deliver them, what ecosystems of services to join.

Three Vectors

We need to broaden our frame of reference, because I think this new opportunity is about the intersection of three important vectors. The first is the one we've just been talking about: eservices. Our Internet strategy now revolves around creating and delivering services over the Net. And this is about much more than websites; it is about delivering Internet services to devices. What we're all about now at HewlettPackard [HP] is helping new business models be created, as well as inventing the technologies that support those business models.

In particular, HP E-Speak is a remarkable software technology that is at the heart of our belief that anything can be turned into a service for revenue and profit. E-Speak makes it possible to create, request, and locate any service on the Net from any device. It is a universal translator, if you will.

The second vector is appliances. I think appliances will proliferate. Yes, we'll continue to have the PCs and yes, we'll have PDAs [personal digital assistants], cell phones, and pagers. But now everything that has a microchip in it can become a device; connected to the Web, it will be an information appliance. And these devices will be very large, e.g., a megavideotron in a football stadium, or as small as a few molecules thick, if HP researchers have their way.

The third vector is infrastructure. Think about the requirements for an infrastructure that has to support billions of devices, trillions of transactions. It has to be always on, always available, always reliable, always secure. Fifteen years ago, HP Labs called this "pervasive computing," then the computing utility. And we have been building infrastructure based on open systems and standards with this vision in mind: as available as oxygen, as reliable as the sun and the moon, as invisible as radio waves, because that's what's required to support billions of devices and trillions of transactions.

Vector Intersection

Now, we talk about those three vectors - services, appliances, infrastructure - but the problem is that most of us in this industry only think about one vector at once. That's why consumers and businesses haven't gotten all that they want out of the Net. Profiting requires us to pull back and focus on the intersection of all three vectors, and to create solutions for customers across all those vectors.