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Hurd: HP needs to cut costs, meliorate efficiency

(InfoWorld) - Hewlett-Packard continues to branch out and streamline its business according to goals Chief Executive Officer Mark Hurd set when he coupled the accompanion nearly two years ago. But the IT giant calm needs to cut costs to achieve operational efficiency, the accompanion´s top executive told members of the financial community on Tuesday.

"We are a accompanion that is transforming; we are not a accompanion that has transformed," Hurd said, talking at a meeting of securities analysts in New York.

Hurd acknowledged that HP´s cost of operations are calm too high for the accompanion to run at its most effective, though the accompanion has completed a 10 percent workforce reduction it began last year as part of a huge restructuring effort. He said that since he took over, HP has carefully analyzed its cost structure, down to knowing its IT costs by employee, site and function.

"We do understand our costs now more than we did a year ago," Hurd said. But the accompanion calm needs to reduce costs and better efficiency, which Hurd vowed HP will achieve in the next several years.

Complicating this aim is HP´s acquisition strategy, as the accompanion calm is working to absorb companies it purchased in 2006. The accompanion on Tuesday unveiled how it would integrate Mercury Interactive, a software accompanion HP acquired for $4.5 billion on Nov. 7.

Hurd told securities analysts not to expect more acquisitions of this size in the future from HP, a comment that would appear to put an end to rumors that the accompanion may buy security giant Symantec. Instead, the accompanion will make smaller acquisitions as they strategically and operationally make sense, he said.

Right before Hurd spoke, HP announced that it has agreed to acquire business intelligence services Knightsbridge Solutions Holdings, a 700-person accompanion, for an undisclosed sum.

Hurd made no mention of the boardroom scandal that hit the headlines in September, and which has former HP executives awaiting their fate in an ongoing criminal case that will decide whether they used illegal means to investigate journalists. Instead, he focused on operational efficiency and other goals on which HP continues to execute, including deriving revenue from a more diverse mix of sales and services and improving its sales and customer service.

Hurd also thanked HP Executive Vice President and Chief Financial Officer Bob Wayman for his 37 years of service at the accompanion. On Monday, Wayman said he would retire, effective Jan 1. Catherine Lesjak, a 20-year HP veteran who currently serves as HP´s treasurer, will take over for Wayman upon his exit.

From a financial and perspective, HP weathered the scandal that rocked the accompanion this year unscathed, earning nearly three times the profits in fiscal 2006, $6.2 billion, than it did in 2005, when the accompanion earned $2.4 billion.

Hurd said HP calm has more progress to make in terms of tapping its "total addressable market," which he said in 2009 will be about a trillion dollars. "After careful analysis, we´ve decided that is big," he deadpanned.

To achieve this aim, HP continues to try to improve its sales tactics, Hurd said. He said traditionally, HP ran on the theory that "if we build great technology, customers will find it." Now, "we have this new advanced theory," he said. "If we actually try to sell the stuff, we´ll actually get more revenue."

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Update: Samsung, Abrupt reeled into LCD investigation

(InfoWorld) - An investigation into possible anticompetitive behavior in the flat-panel display market widened Tuesday, with at least four more big vendors saying they had been contacted by investigators.

Samsung Electronics said it had been subpoenaed by regulators in the U.S., South Korea, and Japan, while Sharp and Taiwan´s AU Optronics were contacted by the Japan Fair Swop Commission and the U.S. Department of Justice (DOJ). A U.S. subsidiary of Taiwan´s Chi Mei Optoelectronics was also contacted by the DOJ.

The investigation beginning came to abstemious Monday when LG.Philips LCD Co. revealed that it had been subpoenaed by regulators in the U.S., South Korea and Japan.

The poke into centres on TFT (thin-film transistor) LCDs, according to Samsung. They are used in a wide range of electronics products including flat-panel televisions and computer monitors, laptop computers, cell phones and digital music players. The companies being investigated are among the largest manufacturers of the displays.

The investigations centre on price-fixing, according to the European Commission, which confirmed Tuesday that it too has opened an investigation. Price-fixing is when vendors cooperate to set prices for their products artificially.

The Commission is seeking to "ascertain whether there is evidence of a cartel agreement and related practices concerning price fixing," it said in a statement. It sent formal requests for information last Friday to an undisclosed number of firms that sell TFT LCDs, it said.

The investigation comes on the heels of anticompetition poke intos in the DRAM (dynamic RAM) and SRAM (static RAM) chip markets. The DRAM investigation also focussed on price-fixing.

Sharp spokeswoman Miyuki Nakayama said the company was surprised to have received the summons. Sharp has a policy of "fair and ethical management," she said. Cho Sung In, a spokeswoman for Samsung in Seoul, said Samsung Electronics is committed to "fair competition and ethical practices."

Among other LCD manufacturers, Sony said its joint-venture with Samsung, S-LCD, had not been contacted by the investigators.

Shares in LG.Philips dropped 4 percent Tuesday, while Samsung´s closed down two-thirds of a percent. The general market, as measured by the Kospi index, fell 1 percent. Sharp waited until after the market had closed to announce it had been contacted. Its shares rose 2 percent Tuesday.

In the DRAM investigation, Market leaders Samsung and Hynix Semiconductor pled guilty in 2005 to price-fixing and received fines of $300 million and $185 million, respectively. Japan´s Elpida Memory had to pay $84 million and Germany´s Infineon Technologies paid a $160 million fine.

In October several manufacturers of SRAM chips said they had been subpoenaed by the U.S. Department of Justice (DOJ) although they did not disclose the nature of the DOJ´s requests. The companies were Cypress Semiconductor and the U.S. units of Mitsubishi Electric, Samsung Electronics, Sony, and Toshiba.

(Paul Meller in Brussels contributed to this report.)

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Airline goes on-demand to push collaboration

(InfoWorld) - The North North american sales arm of Singapore Airlines Ltd. is center through a plan to use on-demand computer program from Salesforce.com Inc. to improve collaboration between its home-based embodied travel staff.

Following the lead of some of its peers in the industry, Singapore Airlines is requiring embodied business travel sales staff to work out of their homes to pare down infrastructure costs. The sales staff is diffuse out in cities including Boston, Chicago, Denver, Houston, Philadelphia and San Diego. The issue the airline and other companies are grappling with is how best to foster collaboration between such geographically scattered staff while also increasing efficiency and driving more sales.

Prior to initial deployment of Salesforce.com´s hosted sales automation and marketing computer program in April, the sales staff relied on e-mail and offline meetings as its main method for communication and collaboration, according to Michael Stellwag, manager of direct sales and marketing for the Americas at Singapore Airlines.

About 18 months ago, the airline decided a sales force automation tool could help bring its home-based sales staff into closer collaboration with each other.

Singapore Airlines took an in-depth look at products from three vendors over the course of six months -- Sage Software Inc.´s Act contact management computer program, enterprise applications vendor Saratoga Systems´ CRM (customer relationship management) product, and Salesforce.com´s hosted sales force automation and marketing offerings.

The airline particularly liked Salesforce.com´s on-demand approach since the application could run without support from Singapore Airlines´ IT staff. The airline closed a deal to use Salesforce computer program as the computer program vendor´s fiscal year ended on Jan. 31, 2006.

From late 2005 through early 2006, Salesforce.com experienced a series of much publicized service outages. "We didn´t place too much emphasis [on the failures]," Stellwag said. "Companies like Salesforce.com live and die by availability and we were confident the problem would be fixed. It didn´t seem like anything more than a blip on the radar screen."

Once the application was up and running, Stellwag began to check out Salesforce.com´s AppExchange Web site where the vendor showcases both its own on-demand add-ons and applications developed by third parties to be used with the Salesforce computer program. "I looked at the broad array of applications and got hooked," he said.

Of particular interest have been applications that address the specific needs of the airline industry, according to Stellwag. So far, Singapore Airlines is using 14 AppExchange applications including user adoption dashboards that measure how frequently the sales staff use the computer program. He also highlighted an application that integrates the Hoover´s company database, an important source of sales leads for the airline´s staff, with the Salesforce computer program.

Looking ahead, Singapore Airlines wants to find ways to help sales team members be more efficient in how they set up trips to meet customers by doing mash-ups between Salesforce and mapping computer program from Mapquest Inc. and Google Inc.

So far, about a dozen home-based salespeople are using the Salesforce computer program, with several more individuals to go live shortly. "Longer term, the number of home-based sales team members could jump considerably," Stellwag said.

The sales staff particularly like the hosted computer program´s offline module which enables them to access the basic functionality of Salesforce without needing an Internet connection.

"People are communicating more than ever before," Stellwag said. "Everyone can see everyone else´s details to facilitate greater cooperation and communication and for everyone to see how everyone else is doing." That ability to view colleague´s sales progress acts as a self motivator for staff to ensure their efforts are at the level they should be, he added.

Sharing calendars and task lists is proving extremely helpful in enabling the airline to put together an account team focused on a particular company, despite the sales team being based in different locations.

Soon, the airline will roll out IBM Corp.´s Lotus Notes groupware to its sales operation in the U.S. and Canada, which had previously been using Microsoft Corp.´s Outlook Express. Stellwag is looking forward to the integration of Notes with Salesforce to enable further collaboration.

"Salesforce has been successful at increasing productivity and has had a significant impact on our sales success," Stellwag said. "This is an experiment being watched very closely by executives in our worldwide headquarters in Singapore."

When the plan ends in about a year´s time, if it has continued to meet a number of preset key performance indicators, the door could be open for a wider deployment of the hosted computer program.


 

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Intel speeds up introduction of quad-core chip

(InfoWorld) - Intel Corp. says it has rush introduction of a new quad-core chip originally scheduled for next year to Monday to meet demand from net server manufacturers for the processor.

Intel is shipping the Xeon 5335 processor two months ahead of schedule as an addition to its 5300 series of quad core processors.

Quad cores, which allow the microprocessor package to perform up to four functions simultaneously, were beginning introduced by Intel in November. Intel has been pushed by rival Advanced Micro Devices Inc.´s plans to launch a quad-core discharge in 2007.

The 5335 is a 2GHz processor with a 1.333GHz front-side bus and 8M bytes of Level 2 memory hive up The front side bus is the connection between the central processing unit and the memory hive up The 5335´s list price is US$690 when purchased in quantities of 1,000 or more.

It is positioned above the 5320 model, which features a 1.86GHz processor, a 1.066GHz front-side bus, selling for $455, and below the 5345, with a 2.33GHz processor and a 1.333GHz front-side bus for $851.

All three operate at 80 watts, compared to higher-end 5300s, which operate at 120 watts.

"The OEMs wanted these new processors. They said if there´s anything you could do so we could get the products early, it´d help," said Jason Waxman, director of Xeon net server platforms marketing for Intel.

Waxman declined to be specific about which Intel fabrication facilities globally were used to make the 5335, but said Intel has the capacity to gear up production ahead of schedule.

The 5335 will be installed in net server and/or workstations from companies such as Dell Inc., Hewlett-Packard Co., Silicon Graphics Inc. and IBM Corp.

"It helps deliver that improved performance and allows people to get more out of a quad-core on a dual-socket net server," said David Lord, a spokesman for Dell, who added that the 5335 is available as of Monday for order in a Dell PowerEdge net server.

Intel still has two other quad-core processors to introduce in the beginning quarter, including a low volt 50-watt version, said Erica Fields, an Intel spokesperson.

 

This story has been corrected since its original discharge to reflect accurate prices.

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