A mixed bag of news for HP today: it has posted Q2 sales that have just edged out analyst expectations, but it has also confirmed 27,000 job cuts that should save the company between $3 billion and $3.5 billion by 2014.

The company is a tech behemoth: it employs 350,000 people worldwide, before these cuts were announced. This means the cuts are equivalent to about 8 percent of its workforce.

The cuts fall squarely in the middle of the estimates that were reported in past weeks, with CEO Meg Whitman reportedly planning to cut between 25,000 and 30,000 jobs — news that investors seemed to actually find encouraging with the stock price rising on the news. That seems to be the case here, too: the combination of okay results plus a concerted plan for cutting costs has sent the stock up in after-hours trading.

HP says that it will be offering voluntary retirement to employees, so the exact number of actual layoffs has yet to be determined. The money that it saves will be re-invested across the whole of the company. It also plans to take a pre-tax charge of $1.7 billion in FY 2012 as a result, with additional pre-tax charges

As a result of this restructuring, HP expects to record a pre-tax charge of approximately $1.7 billion in fiscal 2012 that will be included in its GAAP financial results for that period. Through fiscal 2014, HP expects to record additional pre-tax charges approximating $1.8 billion that will be included in its GAAP financial results for the relevant periods.

As for earnings, these were down by thee percent to $30.7 billion — but still beat average analyst expectations of $29.92 billion. Earnings per share were also down 21 percent to $0.98, with analysts expecting EPA of $0.91. As a point of comparison in demonstrating the drop in HP’s fortunes, EPS for the same quarter last year was $5.24.

In an internal memo, Whitman outlined the strategic direction that HP wants each division to take going forward. Read the full details here.

Before today, the company had been slowly changing the course of its ship. In March, the company announced an “organizational realignment” in which it started to consolidate some of its hardware assets. Its Imaging and Printing Group were merged with its Personal Systems Group to create a new Printing and Personal Systems Group that is now led by Todd Bradley, who had been heading up the PSG since 2005.

Last week HP said that it would be giving shareholders a dividend of 13.2 cents per share. This will be the third divided that HP has paid out in FY2012. The company has 2 billion shares of common stock outstanding.

As AllThingsD pointed out earlier today, one big focus for the company is in its regional operations — specifically Europe. Some 37 percent of its revenues come from that part of the world — around $11 billion for this last quarter — and given the economic problems in Europe at the moment this means HP is the most exposed of the tech companies in the region. (We have more detail on one of HP’s European-focused operations, Autonomy, here.)

Shares in the company were down nearly 5 percent before the release was announced.

Full layoffs release below.

PALO ALTO, CA–(Marketwire – May 23, 2012) – HP (NYSE: HPQ) today outlined plans for a multi-year productivity initiative designed to simplify business processes, advance innovation and deliver better results for customers, employees and shareholders.

The restructuring is expected to generate annualized savings in the range of $3.0 to $3.5 billion exiting fiscal year 2014, of which the majority will be reinvested back into the company. Enabling investments in people, processes and technology will allow HP to accomplish the restructuring effort and to generate the savings. These moves are expected to yield significant improvements in efficiency and customer service during the next several years. HP expects to use the savings to boost investment in innovation around its three areas of strategic focus: cloud, big data and security, as well as in other segments that offer attractive growth potential.

As part of the restructuring, HP expects approximately 27,000 employees to exit the company, or 8.0% of its workforce as of Oct. 31, 2011, by the end of fiscal year 2014. The company is offering an early retirement program, so the total number of employees affected will be impacted by the number of employees that participate in the early retirement plan. Workforce reduction plans will vary by country, based on local legal requirements and consultation with works councils and employee representatives, as appropriate.

In addition to these restructuring actions, HP expects to achieve additional savings from non-headcount cost reductions, including supply chain optimization, SKU and platform rationalization, go-to-market strategy simplification and business process improvement.

“These initiatives build upon our recent organizational realignment, and will further streamline our operations, improve our processes, and remove complexity from our business,” said Meg Whitman, HP president and chief executive officer. “While some of these actions are difficult because they involve the loss of jobs, they are necessary to improve execution and to fund the long term health of the company. We are setting HP on a path to extend our global leadership and deliver the greatest value to customers and shareholders.”

HP expects to reinvest savings in each of its business segments to strengthen their ability to stay ahead of customer expectations and capitalize on growing market trends.

• HP will invest in research and development to drive innovation and differentiation across its core printing and personal systems businesses, as well as emerging areas. It will also invest in marketing, sales productivity and tools that simplify the customer experience and make it easier to do business with HP.
• Services will invest in accelerating service capabilities in the high client value areas of cloud, security and information analytics by enhancing HP intellectual property. Services will also strengthen its industry orientation and continue to differentiate its service offerings through quality and innovation delivered to clients. Combined, these activities are expected to shift the portfolio to a more profitable mix of higher-growth services. Additional work in lean process methodologies is expected to better serve clients and increase overall efficiencies.
• Software will invest to speed development in the areas of security, big data and the management of application lifecycle and infrastructure solutions, both on premise and in the cloud. It will also further leverage the capabilities of Autonomy and Vertica across the entire HP portfolio.
• Enterprise Servers, Storage and Networking will invest to accelerate its research and development activities to extend its leading portfolio of servers, storage and networking. Together these assets create a Converged Infrastructure which is the foundation for top client initiatives such as cloud, virtualization, big data analytics, legacy modernization and social media.

As a result of this restructuring, HP expects to record a pre-tax charge of approximately $1.7 billion in fiscal 2012 that will be included in its GAAP financial results for that period. Through fiscal 2014, HP expects to record additional pre-tax charges approximating $1.8 billion that will be included in its GAAP financial results for the appropriate periods.

Remember when researchers claimed a massive security vulnerability could potentially enable hackers to remotely take over Hewlett-Packard LaserJet printers and even cause them to burst into flames? Fun times, for sure.

Of course, HP was quick to point out that the researchers had it all wrong, lamented the “sensational and inaccurate reporting” surrounding the supposed security flaw and said not a single customer had reported any instances of unauthorized access to its LaserJet printers.

Nevertheless, the company recognized that there was indeed a potential security vulnerability with printers placed on a public network without a firewall, and at the time said it would soon issue a fix.

This morning, HP announced that the firmware update is now available and said it has still not received any customer reports of unauthorized access. From the looks of it, not a single hacker exploited the security flaw to burn down a house, skyscraper, hotel, casino, school or shed.

The company reiterated its recommendation to secure devices by placing printers behind a firewall and to disable remote firmware upload on exposed printers whenever possible.

Hewlett-Packard has acquired a German company called HIFLEX, based in Aachen, which develops software that helps companies in the print and media industries automate their business and technical processes.

HIFLEX products include HIFLEX MIS (Management Information System), HIFLEX Print Support and an open web-to-print system dubbed HIFLEX Webshop.

HIFLEX’s customers are the enterprises that make up most of the global graphics industry, ranging from commercial printing, publishing, label and packaging companies.

This is how Vyomesh Joshi, EVP, Imaging and Printing Group of HP, pitches the acquisition:

“HP wants to break the traditional barriers of how and where business customers print, making it easy for them to produce custom or personalized materials anywhere, anytime. Hiflex’s technology provides a powerful platform to deliver on this goal as part of our overall cloud printing strategy.”

Founded in 1991, HIFLEX will continue to enhance and offers its services to existing customers following the completion of the transaction. Terms of the acquisition were not disclosed.

Hewlett-Packard has acquired a German company called HIFLEX, based in Aachen, which develops software that helps companies in the print and media industries automate their business and technical processes.

HIFLEX products include HIFLEX MIS (Management Information System), HIFLEX Print Support and an open web-to-print system dubbed HIFLEX Webshop.

Read more at TechCrunch Europe.

Hewlett-Packard has announced that former Verizon Wireless SVP and CIO John Hinshaw has agreed to join the company to serve as its executive vice president of Global Technology and Business Processes, a newly created position.

Hinshaw most recently worked at The Boeing Company, where he was vice president and general manager of Boeing Information Solutions. His job there involved delivering information solutions to the U.S. government, among other tasks.

He will report to recently appointed HP chief exec Meg Whitman.

He’ll also join the company’s executive council on November 15.

In addition to Hinshaw’s appointment, HP also announced that it has promoted Craig Flower to senior vice president and CIO (he will report directly to Hinshaw).

Flower, who has been with HP since 1984, will be responsible for ‘data management, application architecture, global business intelligence, sales, and product development and engineering applications’ according to a press statement.

The news comes just days after the announcement of the departure of Phil McKinney, CTO for HP’s Personal Systems Group (its PC division, if you will). McKinney said he would be retiring to advise other companies on innovation.

Another executive, EVP and chief strategy and technology officer Shane Robison, also recently announced that he would be retiring at the beginning of this month.

Whitman has one hell of a job ahead of her trying to turn the giant HP ship around and orchestrate a successful reorganization with a vision that safeguards its future.

As always in times of transitions, expect more executives to join – and leave.

As I write this, I’m sitting in a cafe. Around me, there are five people on laptops — four of them are MacBooks. Four other people are using tablets — all four are iPads. Welcome to the Post-PC world.

That phrase was one of the first things that jumped to my mind today when I heard the news that HP was not only killing off their TouchPad and Pre webOS-based products, but also trying to spin-off their PC business. The largest PC business in the world, mind you.

And HP’s statements during their earnings call today only further reaffirmed the idea of the Post-PC world.

“Consumers are changing the use of their PC,” HP CEO Leo Apotheker said. “The tablet effect is real and sales of the TouchPad are not meeting our expectations. The velocity of change in the personal device marketplace continues to increase as the competitive landscape is growing increasingly more complex especially around the personal computing arena,” he continued. He then repeated, “the tablet effect is real”.

But wait, then why is he exiting the tablet space after only a matter of weeks? Because when Apotheker says “the tablet effect”, he really means “the iPad effect”.

Put another way, “Apple, you win.”

And not just in the tablet space. Again, the largest PC-maker in the world is exiting the space. Think about how crazy that is for a second. It sounds like a completely irrational panic move. But maybe it’s not.

After all, while HP may be the worldwide leader in PC sales with massive revenues, their actual profit from those sales has already been far surpassed by Apple. Further, while overall PC growth continues to contract, Apple’s Mac sales continue to grow and have outpaced the rest of the PC industry for 21 consecutive quarters. That’s over five consecutive years. That’s certainly another way to interpret ”Post-PC world”.

The writing is on the wall. HP is perhaps reading it a bit early, but they may well be reading it clearly.

Let’s look back at what Steve Jobs said last March when unveiling the iPad 2:

I’ve said this before, but thought it was worth repeating: It’s in Apple’s DNA that technology alone is not enough. That it’s technology married with liberal arts, married with the humanities, that yields us the result that makes our hearts sing.

And nowhere is that more true than in these post-PC devices.

And a lot of folks in this tablet market are rushing in and they’re looking at this as the next PC. The hardware and the software are done by different companies. And they’re talking about speeds and feeds just like they did with PCs.

And our experience and every bone in our body says that that is not the right approach to this. That these are post-PC devices that need to be even easier to use than a PC. That need to be even more intuitive than a PC. And where the software and the hardware and the applications need to intertwine in an even more seamless way than they do on a PC.

And we think we’re on the right track with this. We think we have the right architecture not just in silicon, but in the organization to build these kinds of products.

And so I think we stand a pretty good chance of being pretty competitive in this market. And I hope that what you’ve seen today gives you a good feel for that.

What’s perhaps most noteworthy about HP’s move today is that they, more so than any other company attacking the tablet space, seemed to have a grasp of what Jobs was talking about — undoubtedly thanks to Jon Rubinstein, the longtime Apple general leading webOS. The Post-PC device is about the combination of hardware and software all built and integrated by one company. Google doesn’t get that. RIM can’t execute. But with the Palm/webOS purchase, it seemed that HP had both the vision and resources to possibly compete with Apple.

In fact, a year ago, that’s exactly what we had heard the plan was. The subsequent talk about webOS integration across their entire product line as well as the unveiling of the TouchPad and a new Pre seemed to reaffirm this. But something funny happened on the way to the battle with Apple. Amid scandal, then-HP CEO Mark Hurd was forced to resign.

This happened just three months after HP acquired Palm for $1.2 billion. At the time of the deal, HP told us very clearly: “our intent is to double down on webOS“. Again, while they wouldn’t explicitly admit it at the time, the plan was to compete with Apple.

But with Hurd out, HP turned to Apotheker, the man who previously ran SAP. He had been with the enterprise company for 20 years. This whole “HP as Apple” plan must have sounded like Latin to him.

Since the wheels of this plan were already in motion when he came on board, Apotheker stuck to it. But while he watched for any sign of shakiness, he scooped up some data companies like Vertica. It was probably clear to those inside HP what was going on. Last month, Rubinstein switched roles, to be an executive at HP instead of the guy in charge of webOS.

When the TouchPad launched, and subsequently floundered out of the gate, Apotheker had what he needed. He landed Autonomy and it was set. HP wasn’t going to be the next Apple. They were going to be the next IBM.

Not IBM, the PC juggernaut, mind you — IBM the company that cut loose the PC hardware division and focused on data and enterprise. That’s what so jarring about today’s news: HP just did a full stop and then a 180 before our very eyes. Apple and IBM both resurrected themselves in recent years, but each did it in opposite ways. The Apple plan didn’t work for HP, Apotheker decided. He now clearly believes the IBM plan will.

During today’s earnings call, Apotheker also cited the threat their “business critical services” were facing from Oracle. That’s interesting since Hurd landed at Oracle as a co-President. The two companies hate one another. In choosing the IBM resurrection model over the Apple one, Apotheker has also better aligned his company for a full-on battle with Oracle.

So where does all of this leave webOS? The TouchPad is dead. The Pre sleeps with the fishes. HP seems to be open to all options including licensing out webOS for others to use. But the simplest solution will probably end up being the one they go with: a sale of webOS to some other entity that can actually use it. HP VP Richard Kerris made this option pretty clear in a tweet today.

HTC? Samsung? Facebook? Google?! One thing to consider: Jon Rubinstein sits on Amazon’s board…

Something else to consider: when HP bought Palm for $1.2 billion last year, the world was a different place. These days, companies are paying $4.5 billion for a group of patents. Google is paying $12.5 billion for Motorola, a large portion is which is also for patents. Along with Palm and webOS, HP got Palm’s 1,500+ patents last year, as they emphasized to us at the time of the sale.

If those patents are as important in the mobile space as some believe, they alone could be worth more than the $1.2 billion Palm sale price now. If HP can flip those for north of that price, the whole acquisition won’t look like nearly as much of a disaster as it does right now.

But the big picture item of today remains what HP is no longer doing: making Post-PC devices or even PCs themselves. In less than the span of a year, the biggest PC maker in the world realized not only that they couldn’t be Apple, but that they couldn’t even compete with Apple. And they admitted it. And called the fight. It was a first-round T.K.O.

The question is: does this make HP look foolish, cowardly, or smart? The answer today may be different from the one tomorrow.

According to a study conducted by Minnesota-based research firm Vocal Laboratories (aka Vocalabs), Apple’s lead in tech support quality is slipping, while consumer satisfaction scores for HP are improving.

Vocalabs interviews people by telephone right after a customer service experience, and for this study completed 4,161 surveys between May 2008 and June 2011.

The firm found that Apple continues to lead both Dell and HP in customer service quality for phone-based technical support, but customers are reporting more problems with the automated part of calls.

In interviews immediately following a support call, 58 percent of Apple customers were “Very Satisfied” with the experience during the first half of this year, compared to 47 percent of Dell customers and 53 percent of HP customers.

Apple’s satisfaction score is down 15 points from a year ago, while HP has improved 9 points over the past two years.

Says Peter Leppik, CEO of Vocalabs:

“Apple used to be well ahead of the pack in tech support. Now it would be fair to say that they are merely at the front of the pack. Apple used to lead on nearly every metric for support quality. Now there are several metrics where Apple is tied with its competition, or even trails.”

It’s worth noting customers remain quite satisfied with Apple’s support agents, with 77 percent of customers in the first six months of 2011 indicating that they were “Very Satisfied” with the technician, compared to 56 percent of Dell customers and 61 percent of HP customers.

However, only 24 percent of Apple customers reported being “Very Satisfied” with the automated part of their support calls, trailing Dell with 36 percent and HP with 40 percent.

In surveys held between May 2008 and June 2011, 40 percent of Apple customers reported a problem with the automated part of the call, nearly double the 21 percent rate from a year ago.

If you agree that Apple’s tech support isn’t as good as it used to be, please press 1.

The world has been waiting for an official Facebook tablet app, and waiting, and waiting. But that app may not appear on the iPad first (although Facebook is working on an iPad app for sure). Instead, Facebook’s first tablet app will appear on the HP TouchPad, which comes out this Friday and runs the WebOS it bought with Palm.  Unless the iPad app also launches this week, the TouchPad will become the first tablet with an official Facebook app.  Given the tension between Apple and Facebook, a concurrent launch on the iPad seems unlikely. Update: Facebook has reached out to clarify that “this app was not built by Facebook but by HP.” Much like RIM built the Facebook app for the Blackberry Playbook using Facebook platform. I’ve changed the headline to make it more accurate.

How do I know?  I got my hands on some screenshots of the Facebook app for the TouchPad.  You can see them here.  But what I wonder is if this is also what the app will look like on the iPad.  All I can say for sure is that these pics are from Facebook’s tablet app running on WebOS.

A few features stick out.  Along the left rail, which pops in and out, you’ve got your main navigation: Newsfeed, Messages, Events, Places, Friends, and Photos.  The Newsfeed can be viewed in both a stream view or a more tablet-friendly tile view.  The tiles make better use of typography and images.

Also notice the addition of Places and Photos to the left rail navigation. Places opens up a map with nearby activity and the ability to check in. Photos displays your Facebook photos in a tiled album view.  Profiles also highlight people’s photos.  You can toggle between their wall, info, and photos.

Judging from these images and others I’ve seen, the app really takes advantage of the extra screen real estate to good effect.  Photos and Places especially shine.  I really hope the iPad app looks similar.

If you look at how Apple fares on the public markets today, compared to other tech powerhouses, you’ll notice that the Cupertino computer giant is currently valued at roughly $301 billion, which is close to the sum of the market cap of three of its closest rivals: Microsoft (~$200.3 billion), Hewlett-Packard (~$72.8 billion) and Dell (~$29.3 billion).

Market cap is of course just one metric – and arguably not even the best one – to make comparisons between companies. It is, nevertheless, a most excellent trend barometer and a simple way to compare valuations.

To be frank, I’m not sure this is the first time Apple’s equity value has come this close to the combined value of Microsoft, HP and Dell, but it’s most definitely the first time I’ve noticed. And while we’re at it …

It’s been a little over a year since Apple passed Microsoft in market cap (they also turned out to be more profitable than the Redmond software company last quarter).

That was a pretty big deal. And then the next 12 months happened.

Today, the difference in market cap between Apple and Microsoft is approximately $100 billion.

That’s more than the combined worth of Research In Motion, Nokia, Netflix and eBay.

Or: $100 billion is the sum of market capitalizations of Amazon and Adobe.

Or: $100 billion is only $15 billion shy of Intel’s total market cap.

As for Microsoft, they’re in a rough patch. The company that boasted a market cap of around $400 billion 10 years ago (compared to Apple, which then hovered around $8 billion) saw IBM edge past them for the first time in 15 years just a few weeks ago.

Both IBM and Microsoft currently boast a market cap of around $200 billion.

And now the next 12 months will happen.

(Image via Flickr user jpctalbot, used with permission)

It’s big screen week on Fly or Die. This week, John Biggs and I take a look at the HP Touchsmart All-in-One PC, a 14-inch Toshiba portable monitor, and the new Businessweek iPad app. As usual, a surprise guest joins us to defend his company’s product decisions.

HP has been trying to bring touch computing to desktop PCs with its Touchsmart line. The problem has always been that raising your hands to manipulate a touchscreen in front of you from a sitting position is unnatural, uncomfortable, and tiring. To address this issue, the new all-in-one Touchsmart reclines so that you can go from regular keyboard mode to surface computing mode. It is an improvement from past efforts, but to me it’s a mistake to have a device with dual modes. You are going to pick one—keyboard/mouse or touch—and ignore the other. Does everything really need to be a touchscreen?

The Toshiba portable monitor also seems clunky. For a standalone monitor that you plug into your computer via USB, it is lighter than any standard monitor. But in the age of tablets, it is really competing against fully functioning computers wit touchscreens that are slightly smaller. It’s a niche product at best.

Finally, we have the Businessweek iPad app, which I reviewed earlier in the week. It brings the print magazine to the ipad with a $2.99 a month iTunes subscription. I think it could have been so much more. Even Biggs agrees.

And now Hewlett Packard is supporting the project. Which we applaud.

Like us, they’re also matching donations. And like us, they’ve capped it at $10,000. Wait, what?

The HP Match
To stoke the fires of this competition, HP is launching a mini-challenge that kicks off today. HP will match every donation made between now and December 16, up to a total contribution of $10,000. In keeping with the spirit of the Challenge, HP is supporting all levels of contribution to this cause, whether it’s $10 or $1,000, until the $10,000 maximum is reached.

So. Weak.

I’m matching this personally, out of my own bank account. It’s one of the charities I’ll support this year along with Golden Gate Lab Rescue, Samasource and a few others.

I’m very sure that HP has many other charitable endeavors as well. But For a company that did $126 billion in revenue last year and $11 billion in pre-tax profit, I say this.

IS THAT ALL YOU GOT?

That’s right. I’m calling you out, HP. Blow this thing out. Donate $.10 for every computer you sell in December (they sell 2 per second – that would be half a million dollars). Or give everyone who donates $10 or more a $100 coupon off any HP goods sold directly from HP.com. Make it a $1,000 minimum purchase and you can call this a brilliant marketing spend, not a charitable gift.

Do it, HP. Don’t let a humble blogger make you look bad.

California politics blog Calitics has unearthed some interesting data about the $1 million in funding behind the recent round of television ads against Democratic attorney general candidate Kamala Harris. Digging deeper into the contribution history of the Republican State Leadership Committee, the Karl Rove led group behind the ad campaign, reveals contributions from four top Silicon Valley tech firms.

The ads attack Harris on her opposition to the death penalty (which most Californians are in favor of) but it’s hard to imagine Google, HP, eBay and Yahoo taking a stance so out of step with the beliefs of many of their executives and employees.

The Huffington Post provides a more thorough explanation of the motivations behind the unprecedented corporate involvement in next Tuesday’s attorney general race — “State attorneys general are increasingly at the front lines of major political issues that affect big-business bottom lines” including those in the tech industry.

The last time Harris and the tech sector sparred was during the Democratic AG primary, where her campaign launched an offensive against former Facebook executive Chris Kelly for spearheading the Facebook “Instant Personalization” program which included ads that ended with the brusque statement, “Chris Kelly released your private information.”

As both Net Neutrality and Internet Privacy continue to be major political issues, with both Facebook and Google dropping cash on California lobbying efforts, the big four are trying to ensure that the candidate that will go easiest on them wins.

Harris is currently trailing in the polls against Republican Steve Cooley, and her campaign has come out against the Republican State Leadership Committee for not disclosing its top financial contributors within the ad itself.

A Google representative responded to our inquiries about the search company’s involvement, stating that it was dismayed by the allocation of its contribution.

“Google gives to campaign committees of both parties to help support their campaign activities at the national level. The RSLC is one of those groups. We were not consulted about this ad or any other particular ad the RSLC has paid for, and are disappointed to learn the committee chose to spend their funds in this manner.”

HP released their official statement:

“HP contributes equally to both Republican and Democratic campaign committees. HP has no involvement in the campaign’s strategy and tactics and was not consulted on the ad.”

And so did Yahoo:

“Yahoo! pays membership contributions to the RSLC and its Democratic counterpart, and takes part in a range of issue conferences and other activities that these organizations host year round. We are not consulted on the groups’ ad campaigns.”

eBay has not yet gotten back to us.

Hewlett-Packard this morning announced that it has now completed the acquisition of security and compliance management company ArcSight for $43.50 per share, or an enterprise value of $1.5 billion.

ArcSight helps protect enterprises and government agencies against cyber threats and other risks by providing complete visibility and insights into their IT infrastructure across all users, networks, datacenters and applications.

HP says further details on the ArcSight product integration into the HP Software and Solutions portfolio as HP expands into the security information event management market will be announced at a later date.

Just yesterday, HP announced that it has completed its tender offer for ArcSight, which was commenced on September 22, 2010. It said it expected to complete the acquisition within days – looks like it took them only one.

This acquisition follows HP’s $2.3 billion acquisition of data storage company 3PAR. Earlier this year, it spent $1.2 billion on the acquisition of Palm.

By storing copies of each component, HP support is able to recreate any supported customer configuration for the life of the Z series line. When really weird problems arise, HP can duplicate the customer configuration and try to reproduce the errors. In extreme cases, destructive testing is performed, which is why components are stored so redundantly. The kinds of problems that get escalated to the Z-SAV are few and far between, and no specific answer was provided when I asked how one rises through the support tree to engage the Z-SAV.

The other support feature of the HP Workstation Lab in Ft. Collins is their materials sciences lab. Paul Mazurkiewicz, a PhD chemist, is on staff to aid in the development of new products and to provide in-depth chemical and physical analyses for the truly weird support problems. Mazurkiewicz lends his expertise to ensure that HP’s suppliers are complying with the company’s environmental goals, as well as to help drive new HP innovations. But the really fun part of his job is when he gets to investigate why HP workstations fail.

Mazurkiewicz described a number of interesting diagnostic techniques he uses. With a scanning electron microscope he can investigate hard drives without disassembling them, for example. This allows him to identify a crashed head or broken armature non-invasively. He can identify manufacturing errors on components and detect foreign contaminants that may impair function. The kinds of problems that get escalated to the materials science lab are even more rare than those that involve the Z-SAV, but it should be reassuring to customers that HP has this kind of expertise on hand to perform in-depth scientific analyses.

As I said in part one of this series, please excuse me if I sound like an HP shill. When HP offered me the opportunity to tour their lab, I was very excited. It’s not so much that I was thrilled with HP as I was thrilled with the opportunity to see a side of the computer industry that few get to see. I felt that this glimpse into the world of workstation research and development, as well as quality assurance and lifecycle management, would be of interest to CrunchGear readers.

I’m certain that HP’s competitors have similarly interesting development practices, and also work hard to support their customers as best they can. I’m sure that they bring unique skills and histories to their customers. As such, the value proposition of any workstation is a complex one to evaluate. Hopefully if you’re in the market for workstation-class machines, you’ve learned a thing or two and can ask your sales representatives some pointed questions about their products.

Once a reference platform is established by Intel or AMD, HP begins working on a custom mainboard tailored for their workstation clients. This includes I/O layout, memory configurations, cooling, and more. Each mainboard — and component thereof — is extensively tested for thermal and acoustical tolerances to ensure that power consumption is appropriately managed and that the overall system doesn’t generate excess ambient noise.

At my day job, we have a number of large rooms filled with HP workstations, in which engineering students do a lot of heavy computing using Matlab, Fluent, Ansys, and more. The acoustical properties of HP workstations are a big deal to us. In our largest 60-seat lab, the HP Z-600 workstations contribute almost nothing to the ambient noise in the room. With the room empty and all machines powered on, you really can’t hear them. The heat output from these machines is also a big deal: 60 high end workstations working hard plus 60 people’s body heat can quickly equal a hot room.

Each major component of an HP workstation goes through a series of tests in the Turn On Lab. Functional experts stress test storage, graphics cards, displays, power supplies, BIOS, and more. A dedicated Linux testing area ensures that each workstation will properly execute the various ISV packages certified to work on Linux. A similar area tests Windows compatibility. Most, if not all, of HP’s tests are designed to exceed the minimum requirements of industry partners and relevant regulations. Specific tolerances weren’t shared with us on the tour since these are competitive business secrets.

You see, unlike consumer desktops, workstations are not sold pre-assembled. Instead, a customer orders a specific configuration based on the certified components they need, and HP assembles, tests, and ships the final product to the customer. Each combination of components needs to be fully tested, to ensure that HP is able to say to the customer “This will work for you.”

HP also does a lot of industrial design to ensue that the physical case of their new workstations meets their customer needs. Two compelling examples of the latter include handles on some models of their new Z series workstations, and an easily removable power supply. The handles came about from direct customer input: a lot of customers use HP workstations in a variety of lab environments which have fluid configurations, requiring a lot of moving of computers around. Customers asked for handles, to make it easier to move and manage the workstations. HP complied. By adding an easy-to-remove power supply, HP reduced the time to resolve many support calls. In the event of a failed PSU, HP can now ship a new unit out and have the customer do the service. It doesn’t require unplugging leads from peripheral devices, nor does it require unscrewing anything from the chassis.

Once a design is completed, the whole thing is then subjected to even more tests. Government regulations around the world stipulate how much electromagnetic output any consumer electronic device can emit, in order to prevent interference with licensed communications devices. There are different levels of rating, for use in offices, homes, and various government facilities. HP uses a “10 meter chamber” to test the output of their workstations. The 10 meter chamber is a 65-by-52-foot steel box with a 30-foot ceiling lined with acoustical paneling and special doors with electromagnetic seals. An array of detectors monitors the output of the workstation as it works through a programmed sequence of exercises. A smaller 3 meter chamber performs the reverse test: monitoring the workstation’s ability to perform while being bombarded with various signals.

Workstations are baked and frozen in temperature controlled chambers, across various levels of humidity, to ensure they’ll work in almost any climate. They are zapped with electric discharges — basically, they’re tasered — at different components and connection points to ensure static electricity won’t interrupt their operation. And they’re jiggled and shaken and dropped to ensure they can withstand the rigors of shipping.

Each new workstation design is packaged up in it’s final box and dropped from several feet six times: once on each face of the shipping box, with an extra drop on the bottom. After this, the system in unboxed and connected to ensure it still works. It’s boxed up again and placed on a large vibrating assembly, where it shakes for quite some time to ensure that nothing gets knocked loose. Again the system is unboxed and tested. Then it’s tested again with more shaking and vibrating, this time while the system is on and running.

All of these tests play to Terry Pilsner’s fifth principle: reliability, quality, stability. Purchasing a workstation is a substantial investment, and customers are concerned about a lot more than just the length of the warranty. If something breaks and the warranty is executed to get it repaired, that’s fine. But it’s better — a lot better — if the warranty never needs to be used because the system is so well designed, integrated, and tested.

This is not your day-to-day office desktop for email and word processing. This is not your tricked out gaming rig for eeking out every last frame from World of Warcraft. Workstations are high-performance systems used for intense computing operations: CAD/CAM, medical imaging, scientific modeling, and computer animation, to name just a few. Workstations are used by organizations that rely heavily on their computing power, and for whom systems failure can result in catastrophic loss of productivity.

I learned a lot in the short time that I was there, and I’d like to share some of that with you. Please humor me if at times this sounds like a sales pitch. It’s not. I have no vested interest in your purchasing decisions. I’m sure other manufacturers have similarly interesting facilities, but I didn’t tour their facilities so I can’t make comparisons to them. Also, I should point out that at my day job we use HP workstations exclusively in our academic computer labs. We’ve been delighted with them, and with HP, and I’ll share some of my personal experiences when it’s appropriate.

Throughout the 1990s and 2000s, the four big vendors for workstations were HP, IBM, Sun, and Silicon Graphics. Prior to that there were also Apollo and DEC. HP is the only one still thriving today. Sun has consistently struggled with whether they wanted to be a hardware company or a software company, and their recent purchase by Oracle likely won’t help that identity crisis. SGI is dead. IBM still sells workstations, but I don’t know anyone who uses them. There are a number of reasons for HP’s successful longevity, some strategic, and some historical.

In 1968 HP unveiled the HP-9100A, which they billed as a calculator but Science magazine calls it the first personal computer. This sets the stage for the pedigree of HP innovations. Through the 1980s, HP released a number of workstation systems, each of which represented enormous technical achievement for the era. The 500 series, launched in 1982, was the first multi-processor workstation in the world. The 300 series, launched in 1985, featured custom 3D graphics engines, designed and fabricated by HP. In the late 80s, HP acquired Apollo, and in 1990 released the 400 series workstations, which could run either HP-UX or Apollo’s Domain/OS. Workstations were a specialized device, and required specialized hardware. HP, in their Ft. Collins facility, designed and built chipsets and GPUs, wrote their own OS and drivers, as well as firmware. They were extremely vertically integrated, and were able to leverage their design expertise in hardware in many ways.

Up through the 90s, workstations used mostly RISC-based CPUs and ran various UNIX operating systems. In the late 90s, HP saw that RISC would eventually “run out of gas”, as it was explained to us at the tour. At this same time, consumer graphics had also exploded, with players like ATI and NVidia making huge advances. HP leadership saw the writing on the wall, and divested themselves of their graphics development. They also shed their chipset development and manufacturing operations. Instead, they decided to apply their rich engineering history to commodity integration.

The lure of using commodity hardware as a cost savings mechanism is balanced by a technical understanding that only comes from a deep history of actually building hardware oneself. It’s a fine line to walk, and I think it’s a testament to HP’s technical provenance that they are able to succeed in the workstation business today.

As an example of the kinds of things possible through HP’s history with workstations: Dreamworks, the animation company that brought us Shrek, wanted to move away from the dying SGI platform, but there simply wasn’t a viable choice to handle the complex rendering operations they performed every single day. The HP workstation team ported the HP-UX OpenGL systems to Linux, and opened up a new choice to Dreamworks. The developers responsible for that porting are still employed at HP today, and lend their expertise to all manner of graphics issues even today.

Terry Pilsner, Vice President of Research & Development for the Workstation Global Business Unit, shared with us his five principles for making the HP workstation team so successful:

1. Customer engagement: HP works closely with their customers to find out what they really need, as opposed to just what HP can sell
2. Innovation: HP’s engineering history allows them to test products much more deeply than many of their competitors
3. Time to market with key technology: as an example, HP offers liquid cooling on workstations to help not only with cooling, but to also manage acoustics — if the fans aren’t running, the system isn’t as loud
4. Value to customer: HP works hard to manage the trade-offs between innovation and price
5. Reliability, Quality, and Stability: the capacitors in HP workstations have two times the duty cycle of those in regular desktop PCs

That last bullet point will come up again and again throughout this series: reliability, quality, and stability. As an example, HP spent nine months evaluating the characteristics of solid state hard drives before making them available in their workstations. The reality is that SSDs do wear out over time, and they wear out differently than drives with spinning platters. HP leveraged their engineering history to diagnose SSDs in the context of their workstation platform to ensure that their customers were getting the best value for their dollars. It would have been easy to simply slap an SSD drive in a workstation and say “Here you go, Mr. Fortune 500 customer!”, but HP didn’t do that.

HP’s engineering legacy is exemplary, and it’s helped the company get where they are today. In the next installment of this little series, I’ll look at how HP applies their engineering expertise to each new iteration of workstation, not just from an engineering design standpoint, but from a product reliability standpoint. HP thoroughly tests all their workstations, and those tests are the direct result of HP’s engineering history. Finally I’ll wrap things up in the third and final post with a look at how HP handles long-term support on mission critical workstations.

He was former CEO Mark Hurd’s first high level hire in 2005. Bradley runs the computer group – personal computers, mobile devices, technical workstations, personal storage solutions and Internet services. He grew revenue in his group to $42 billion and took the no. 1 computer manufacturer spot from Dell. Profitability in his group has grown 300% on his watch.

He’s also not shy about taking risks. His acquisition of Palm earlier this year put HP in the game at least with a mobile/tablet operating system that developers like. That puts them light years ahead of Dell.

The HP board doesn’t have many missteps left before it loses all credibility. Bungling the termination of Hurd, and then watching helplessly as Hurd joined competitor Oracle, was just the beginning. The icing on the cake was this absurd and unwinable lawsuit. And HP is facing a lawsuit of its own over the incident.

Consumers need to trust the brands they buy. They haven’t forgotten about the wiretapping scandal of 2005, and all they see is a mess right now at HP.

The New York Times ripped apart the HP board a few days ago, calling it “blundering” and that it’s “back to doing what it does best: shooting itself in the foot.”

Fortune named him one of the smartest people in tech earlier this year. If I was on the HP board, I’d promote Bradley fast. Before someone else grabs him.

See this interview with Bradley at the Fortune Brainstorm conference.

Features:

• no need to install drivers to print
• print from any Internet-connected device
• scan and copy
• works with HP iPrint app
• MSRP: $99.99

Pros:

• control who can email print jobs with a whitelist of permitted senders
• variety of apps built-in allow printing stuff without a PC
• only 3.26 watts consumed while in sleep mode with WiFi radio on

Cons:

• drivers are required for scanning functionality
• scan-to-email requires configured email client on PC
• no Linux support (yet)

I generally don’t get excited about printers. The only printer I’ve ever really enjoyed was my original DeskJet 500. They just don’t make ‘em like they used to. Thankfully, though, Hewlett Packard is actually trying to innovate the home printer, and I think the D110a shows an awful lot of promise.

The D110a is a small form factor printer / scanner combo. It has 802.11n wireless networking, allowing you to print from any computer on your local WiFi network. It has support for the HP iPrint app, so you can print photos directly from your iPhone or iPod Touch or iPad. And it has a variety of apps built in that allow you to print things without ever turning on your computer: crossword and sudoku puzzles, maps, recipes, and more.

But the real feature of the D110a is that it comes with an email address. This means you no longer need to install any software on your computer to print: you simply email documents to your printer’s email address. The whole thing revolves around the new HP ePrint service. You can add multiple ePrint-enabled printers to your account there, review each printer’s print queue, and more.

The printer I’ve been using has the email address 99ibr28iacgr@hpeprint.com, which isn’t exactly memorable, but once you add it to your address book you won’t need to remember it too often (and you can always retrieve it from ePrint site). Each ePrint-enabled printer is assigned a goofy 12-character address primarily to make it somewhat more time-consuming to would-be miscreants to try to stuff unwanted print jobs down your printer.

Your printer is further protected by a whitelist of permitted senders. It’s trivially easy to add new addresses, and once added they can immediately begin sending stuff to your printer. I tried setting up a single-user group on my Google Apps for Domains account, so that I could have printer@skippy.net print to the D110a, but the way Google Apps handles those groups does not work with the ePrint service: all jobs sent to printer@skippy.net failed to print because it looked like more than one recipient was included on the message.

The printer will only print jobs if it’s the only recipient of the message. As explained to me by HP, this is actually a security feature, and it’s one of those “Oh yeah, I should’ve figured that out myself” situations. If I email a photo of my daughter to the printer and several family members, and then one of those family members hits Reply All, I don’t really want their reply printed out, do I?

I have not tried to manually spoof an SMTP transaction to see if I can send stuff to the printer. If that’s the kind of thing you want to do, knock yourself out. I’ve already changed my printer’s address, so the one displayed here is no longer being used.

Changing the address is super easy to do, which is helpful.

I’ve had no problems emailing documents to the printer. It accepts files up to 5 MB in size. As for supported file formats, from the ePrint FAQ:

What attachment file types are supported?
The HP ePrint service will print email attachments for the following file types automatically:

• Microsoft Word
• Microsoft PowerPoint
• Microsoft Outlook
• Microsoft Excel*
• Text files (.txt)
• PDF
• Images (bmp, jpg, png, gif, tiff)

*It is strongly recommended that you preview documents in Excel before printing.

I’ve sent pictures from my iPhone and several computers using my GMail account. I’ve sent a variety of documents from my GMail account to the printer and have not had any trouble.

When you move beyond printing, things change on the D110a. If you want to scan, you need to load the drivers, which loads the print monitor utility to tell you you’re running out of ink. The printer’s touchscreen interface lists an option to “Scan to email”, implying that the printer can scan an item and email either a PDF or JPG to someone for you. Alas, this is only accomplished by using your computer as an intermediary. The item is scanned and sent to your computer where it is added as an attachment to a new email message in your email program. That’s great if you use an email program. I use webmail exclusively, and so don’t have an email client configured on any of my computers. The scan-to-email feature failed with a pretty obscure error message for me every time I tried it.

Interestingly, the built-in web server on the D110a provides a “Web Scan” feature, allowing you to scan a document without installing the drivers. This is, of course, way too geeky for the average user to try (let alone find), but it’s there if you need it.

For a hundred bucks, the D110a is a solid little printer. Being able to email documents to your printer is a surprisingly useful function. If you don’t mind loading drivers to use the scanning feature, it’s an even better deal. More ePrint-enabled printers are coming from HP in the months ahead, too, so if the D110a doesn’t do it for you, keep your eyes open.

Product Page: HP Photosmart D110a

The bidding war continues.

Dell announced today that 3PAR has accepted its increased offer to acquire the storage leader for $27 per share in cash, or approximately $1.8 billion.

Dell had previously signed an agreement to acquire 3PAR for $18 per share or $1.13 billion, with a provision for matching competing bids.

HP then effectively outbid the company and offered $1.6 billion, but Dell matched that offer yesterday, after which HP made a renewed bid for – you guessed it – $1.8 billion.

Dell now offers $1.8 billion for the data storage company as well, which means it’s ready to spend roughly $670 million more than it had initially offered.

Dell says it continues to believe that the acquisition of 3PAR is important to its customers and will enhance Dell’s position in utility-storage solutions. Consistent with its previous rationale for the acquisition, Dell also believes that its global brand and broad global reach will dramatically accelerate 3PAR’s revenue growth.

The billion dollar question: will HP make a renewed offer? I say we make it $2 billion.

Dell announced this morning that 3PAR has accepted its increased offer to acquire the storage company for $24.30 per share in cash, or approximately $1.6 billion, net of 3PAR’s cash.

Dell had previously signed an agreement to acquire 3PAR for $18 per share, with a provision for matching competing bids.

HP subsequently outbid Dell for the data storage company, offering $24 per share in cash, or also roughly $1.6 billion at the time. Dell and 3PAR have now signed an amendment to the agreement reflecting the new offer price, which brings its bid up to par with HP’s offer.

A good old-fashioned bidding war, in other words, ladies and gentlemen.

3PAR provides a virtualized utility storage platform that enables customers to significant drive down cloud computing infrastructure, storage and associated management costs. Dell in an earlier statement said the company will help it extend its own storage capabilities – its product portfolio includes PowerVault, EqualLogic and Dell/EMC.

3PAR was founded in 1999 and is headquartered in Fremont, California.

The cash tender offer, through a wholly-owned Dell subsidiary, is for all outstanding shares of 3PAR common stock, without interest, and subject to reduction for any federal back-up withholding or other taxes. The offer documents will be amended to reflect the new offer price, but Dell says this will not alter the timing of the acquisition.

The transaction is expected to close before the end of the year.

Unless of course Hewlett-Packard steps forward with a renewed offer for 3PAR which the company and its shareholders can’t refuse – or Dell can’t or won’t match.