I beginning to like Carly Fiorina, even if she fails, at least she will have tried.
<<Hewlett-Packard's Fiorina, Under the Gun, Bets on Labs Division
Palo Alto, California, Feb. 17 (Bloomberg) -- Dick Lampman huddled with Carly Fiorina at the small table in his office early in her tenure at the helm of Hewlett-Packard Co., getting ready to do something drastic.
After more than 30 years of secrecy, the No. 2 computer maker is throwing open the doors at its Labs division, sharing research with customers like Nokia Oyj and NTT DoCoMo Inc. The goal: to speed up development of wireless Internet products and boost mobile functions for computing mainstays like printers.
Fiorina, the Armani-wearing former Lucent Technologies Inc. executive, and Labs director Lampman, in shirtsleeves and tie, held several meetings at that square table and concluded that times have changed. Hewlett-Packard, which has always been tight- lipped about research and fearful of giving away competitive secrets, decided that the threat of being late to the game or left out entirely felt too great to keep the silence.
``Yes, there's a risk, but the other risk is far worse,'' Lampman said. ``The old saying that people only want to know what you have for sale -- it's not true anymore.''
The decision is one of a spate of calls Fiorina has made to put more emphasis on Labs, the birthplace of the pocket scientific calculator and the inkjet technology that dominates today's printer market. She's moved the company's board meetings to Labs, recruited top technologists and tightened ties between research and product units.
Palo Alto, California-based Hewlett-Packard may need the 750- person Labs unit now more than ever. Personal-computer sales growth is slowing, and weakening economies worldwide have aggravated the slump. The company's stock has fallen by half since its July record.
Corporate Labs
There aren't many corporate labs that can do the kind of heavy-thinking, basic research that HP Labs, Lucent's Bell Labs and International Business Machines Corp. do.
``The objective is not to develop products, but to develop technologies,'' said Linley Gwennap, principal analyst at research firm Linley Group. ``Product divisions are very focused on the short-term. You really need a group that's more out into the future, the five- to 10-year space.''
It's a tricky balance. Analysts complain that Bell Labs has been slow to commercialize new systems, and Xerox Corp.'s Palo Alto Research Center squandered many of its wares without getting out Xerox-branded items. Without the pressure of looming deadlines, labs often have difficulty applying what they learn to products fast enough to suit sales-driven executives.
New CEOs are often the hardest to please.
IBM, long known for the brain trust that won three Nobel prizes while delving into science, overhauled itself in the early 1990s to focus on products. It faced major budget and workforce reductions as new Chairman Louis Gerstner steered the company back to profitability.
Hewlett-Packard hasn't needed the same shock therapy. By one count, 80 percent of its products originated in Labs. The company turned color research into an edge in printers and digital cameras, and experiments with chip designs helped create Intel Corp.'s Itanium processor.
Shorter Cycles
Some analysts say it had been taking Hewlett-Packard too long to move from research in areas like digital cameras to live merchandise, and they credit Fiorina with shortening the cycle.
``Carly has lit a bit of a fire under them,'' said Richard Doherty, research director at Envisioneering Group, a technology- assessment and market-research firm. ``The scorecard another six months from now should show more traction.''
Fiorina has brought in top talent to ensure that her efforts pay off. She created positions for a chief technology officer and chief science officer and cemented daylong monthly meetings between the duo and managers from both Labs and the product divisions.
Analysts want Hewlett-Packard to shift from a PC-centered company known for printers to a nimble manufacturer whose customers easily tap in to all the Internet will come to offer.
The company has started that transition, working up a system to connect ordinary things like bus stops and bookstore shelves to the Web, as well as items that won't be available for years, such as storage gear that could hold hundreds of times as much data in a device the size of a credit card.
``The next forays into the Internet are about inventing things that have never existed before,'' Fiorina told the crowd at the Comdex trade show in November.
Transistors, Switches
Some of Labs' more esoteric brainstorms are maturing now. Stan Williams's 12-person team is developing transistors and switches the company hopes will become the semiconductors of the future --more than 10,000 times better than today's. They'll be faster, more power efficient and immeasurably cheaper to manufacture.
The team discovered how to use chemical processes to grow wires on silicon, press it against a bath of liquid to apply switches, and then lay the next set of wires to complete the circuit.
The going was tough early on. The group had to invent many of its own tools, like a vibration-isolated table to hold the bath at a precise surface tension even in the heavy air circulation in the cleanroom. They've got it down now. The devices are piling up in round white dishes in corners next to huge microscopes and computer monitors.
That puts the team on track to meet a challenge posted by government researchers: to have a working 16-bit device using the new technique in June or July, with a 16,000-bit part by summer of 2005, Williams said. Analysts say an explosion in such molecular computing would reinvent Hewlett-Packard and the entire industry.
``They've got a lot of magic yet to pop out on the marketplace,'' Doherty said. >> |
