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Wall Street Calculates Future HP Layoffs

Wall Street is a-buzz with talk about not if Hewlett-Packard will be undertaking jobs cuts, but when and just how deeply it will make its cuts. A few weeks ago, HP's new president and CEO hinted that in a number of HP's businesses, it was behind the benchmark compared to rivals in terms of profitability and that the company would be making changes to cut costs. In the IT business, that usually means layoffs.

HP is probably a little jumpy about making cuts. It had the pole position in the storage business a few years ago, thanks to the vast Compaq storage business, but it made cuts in sales and support staff for the StorageWorks product line and then fell behind on its revamping of those products. And the resulting losses were primarily what has been a drag on HP's Enterprise Systems and Storage unit. (The collapse of sales for Unix and VMS midrange servers two years ago is the other problem HP has been coping with as well.)

The consensus on Wall Street, which is centered around a report by analyst Toni Sacconaghi of Sanford Berstein, is that HP will chop somewhere between 5 and 10 percent of its workforce, which works out to between 7,500 and 15,000 employees. This is roughly the same order of magnitude in job cuts that IBM initiated this month. IBM plans to layoff somewhere between 10,000 and 13,000 employees, mostly in Europe and mostly in its services business. HP needs to make cuts to get profitable, but at the same time, making the wrong cuts can hurt worse than keeping people on the payroll.

Canadian HPC Virtual Lab Picks Sparc/Solaris Iron for Research Cluster

IBM Pushes Grids for Economic Development

For instance, last week, IBM announced a partnership with OneCleveland, based in the formerly industrial center of Cleveland, Ohio, to try to use grid technology to bolster collaboration between branches of the government in the greater Cleveland area, its citizens, and public facilities such as hospitals and schools. IBM and OneCleveland are going to build a grid, called the Economic Development Grid, using technology that has yet to be determined.

If you are not familiar with Cleveland, that is where Standard Oil of Ohio, part of the Rockefeller empire, was based and where shipping and railroad infrastructure was dense and manufacturing and distributors were located in the late 19th and early 20th centuries. According to OneCleveland's president, Scott Rourke, the non-profit Internet service provider has been getting donations of fibre optic bandwidth to build a network that serves northeast Ohio, which has a population of around 1 million. Public schools, universities and colleges, hospitals, government offices, and museums pay OneCleveland for access to this network, which is run by IBM. Having built the network, IBM and OneCleveland want to take the system up a notch and use grid technology to allow collaboration across that network. For instance, one of the early projects will be to allow patient records to be shared across all hospitals in the region, thus eliminating redundant and incomplete record keeping for patients that go to different hospitals in the area. Eventually, OneCleveland hopes to add in K-12 school records, which will allow preventive medicine to be performed on students in the area. This ultimately cuts healthcare costs and improves the quality of life in the Cleveland area.

According to Ken King, vice president of grid computing at IBM, IBM is cooking up other schemes to use grid computing to drive economic development. He says that there are natural centers of information around the world, which could become centers of research and collaboration if this information becomes gridded. Think of where the petroleum, medical, pharmaceutical industries are clustered. The establishment of such grids could even be used to foster a new business. For example, a city with good pizza delivery near a rural setting and low costs for living could decide to set up a grid to attract software developers out of Silicon Valley and to a new area. The software companies could not only collaborate over the grid, but actually use the grid to code, test, and distribute their wares. King says that IBM is starting out small with these economic development grids, and will stay in the United States with them for now. But he says that there is nothing unique about the U.S. that makes the idea work. IBM just wants to get some experience before it goes global.

Paul Otellini Takes Over CEO Post at Intel

Intel got a new chief executive officer last week during its annual shareholders meeting. Paul Otellini, currently Intel's president and chief operating officer, took the position from Craig Barrett, who becomes Intel's chairman. As the chipmaker's fifth top boss, Otellini will be charged with steering a new course for the company and putting the missteps of the last year behind it. In particular, Otellini will be expected to close the gap with rival AMD, which has beat the legendary chipmaker to market with two key technologies in recent years, including 64-bit extensions to the basic X86 architecture, and dual-core processors. Otellini is no newcomer to Intel, having been with the company for more than 30 years. He is, however, the first non-engineer to take the chief executive role.

Two Top Intel Execs Jump Ship

Paul Otellini took over as Intel CEO last week, and two top executives at the chip maker have already headed for the door. Abhi Talwalkar, who shared the general manager position of Intel's Digital Enterprise Group, which was formed in January of this year, with Pat Gelsinger, the company's former chief technology officer, has left Intel to become president and chief executive officer of chip maker LSI Logic. Talwalkar has taken over those positions from LSI Logic's founder, Wilfred Corrigan. Corrigan will become non-executive chairman of LSI Logic, and Talwalkar has been named to the board of directors.

Intel lost another top executive, too: Sandra Morris, vice president and general manager of Intel's Mobility Group Operations, which was created during Intel's January reorganization from the former Communications Group. Morris was in charge of Intel's marketing operations in these areas, which include wireless and wired connectivity products. Prior to being named general manager, she was one of two CIOs for Intel itself, and spearheaded Intel's own use of Internet technologies. Before joining Intel in 1985, Morris was a researcher at RCA's Sarnoff Research Center, where she prototyped the use of PCs in multimedia. Her experience at Intel as well as at Sarnoff and the University of Delaware, where she was a faculty member who studied the use of PCs by families, will probably be useful in her new role as vice president and general manager of Eastman Kodak Company's Digital Imaging Services Group, which runs the EasyShare Gallery (formerly Ofoto) online photo sharing service, which Kodak bought in June 2001.

Google Delivers Enterprise Desktop Search Tool

If you are tooling around with the various desktop search tools that are available to help you make sense of your messy desktop environment, search engine juggernaut Google has just launched a beta version of its desktop search tool aimed at enterprises. (Go to http://desktop.google.com/entpromo.html to check it out.)

While the regular desktop search tool, which is also still in beta, is aimed at indexing the contents on one desktop, the enterprise version of the tool can span your desktop, your company intranet, and the Google Web site and give you a single view of all that data. (So much for privacy, eh?) The enterprise search tool can encrypt data and search index files, and is capable of scanning Lotus/Domino email files, which the regular desktop version cannot. It also has a central point of control to allow and restrict access to end user machines.

IBM Adopts Firefox for Internal Use

IBM, one of the strongest backers of open-source software, is now encouraging its employees to use Mozilla's Firefox Web browser. About 10 percent of the company's 300,000 workers are now reportedly using Firefox, which has emerged as a worthwhile competitor to Microsoft's Internet Explorer Web browser, which hasn't seen a major update in years. Although another 30,000 downloads of Firefox won't make a huge difference in IE's 95 percent-plus market penetration, observers say IBM's use internally gives Firefox more credibility and could spur others to give the open-source browser a shot. IBM executives say the move could save the company money by lessening dependence on proprietary software. Although IBM is still the largest purveyor of proprietary software the world has ever known, it has also been a generous donor of money and expertise to the development and maintenance of the Linux operating system, which, along with Microsoft's Windows, is slowly chipping away at the installed base of Unix servers and IBM midrange and mainframe servers.