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I've spoken about our systems strategy for powering the Extended Enterprise. Now I'll move onto some important software products.HP OpenView is an industry-leading software product that is aimed at helping customers manage their Extended Enterprise —— including systems, network, applications, databases, and the Internet. In terms of market share, it is the number one platform for managing distributed environments, and both VAR Business and Information Weak magazines rated it as the best product in its category in 1997.This past year, we made major investments to strengthen HP OpenView in three key areas.The first - the acquisition of a company called PROLIN - was aimed at what we're calling service-level management. We want to provide IT administrators with the tools and processes that allow them to contract with their business users for an agreed-upon service level —— in terms of things like systems response time and availability.PROLIN's suite of software modules report into HP OpenView to physically monitor whether or not IT has met the service-level agreement they made with their business customers and, if not, where the problem lies. We also consult with customers to help them make the process-level changes required to achieve their desired service levels, including operational assessment, planning, design, implementation and training.HP has long been a leader in managing the thousands of PCs that are distributed on our customers' desktops. More than 100 customers use our software products and services to manage their desktop systems, and many of them subcontract that management to us.This year we strengthened our position by acquiring the networking business unit of a company called Symantec. This provided HP OpenView with new capabilities for software distribution, inventory, configuration, trouble-shooting, licensing for desktop systems... as well as real-time server management for Windows NT.This allows us to offer a single-vendor management solution that combines hardware, software management and services. A third investment last year was aimed at helping customers manage NT-based systems. We evaluated a variety of different approaches to this challenge. A small company called NewView had the best product available —— something called ManageX - and we acquired this company late last year.We think ManageX is the best for a couple of reasons. First, it' s very scalable —— able to handle everything from the workgroup to a full enterprise. We think that's very important, because we see many customers starting out by deploying NT in a workgroup area...and then more broadly across their enterprise. So it's critical to have a tool that can grow.Second, ManageX is based on all of Microsoft's technologies. That's really critical if you want to have a leading product in the NT environment. Most of OpenView's competitors today are trying to take software that was developed for managing mainframes or Unix... and then retrofitting it to NT. That's no trivial task.We have a few other IT-infrastructure software products that I'd like to discuss today, but in somewhat less depth than HP OpenView.HP OpenMail provides the backbone for messaging in a mission-critical, high-availability environment.Most people think of messaging as just sending or receiving electronic mail. If it goes down, that's just inconvenient. But as people are taking their business processes to the Net, the messaging backbone becomes critical. This is the role HP OpenMail plays. Finally, on the right there, you see a couple of HP software products whose role is to make the infrastructure secure. Virtual Vault provides secure Internet access to core business functions and data. It has been used successfully worldwide by the banking industry. VerSecure is a comprehensive encryption solution that has just received U.S. government approval for export —— the first strong encryption technology to achieve that status.MICROSOFT, IBM, Motorola and SAP have already endorsed this approach.Let me say a few words about our service and support capability, because it is key to enabling customers to build and manage an Extended Enterprise infrastructure.The goal of our Professional Services Organization is to help customers implement new technologies quickly, to transfer knowledge to their IT staff, and —— through selective outsourcing —— to provide them with some flexibility in terms of their staffing levels.In the past three years, HP's systems integration and consulting service has shown tremendous growth. It has become a vital ingredient in the formula for our success with our Chinese customers and partners. You see our areas of expertise listed here. The first three are aligned with the software products I just discussed, and I'll talk about the last two when I describe our E-business solutions. So that leaves extended ERP —— enterprise resource planning —— as the only thing to comment on for this list of services. HP has a depth of expertise in helping customers implement applications like SAP. We've done more than 70 installations worldwide, and we have the most comprehensive SAP R/3 services and support offering in the industry.Last year we introduced what we call Rapid R/3, which is a fixed-price contract with an accelerated implementation schedule of between four and six months. We completed a dozen such installations last year.By the way, we have the industry's only high-availability offering customized for SAP R/3, and we have closely integrated HP-SAP support processes.In terms of support, I would call your attention to two items listed here. The first is our high-availability support offering, which provides a continuum of support offerings that span needs ranging from a departmental print server to an online reservation system that must be continuously available.It's also worth noting that we are the only supplier that is certified to support Unix, Microsoft, Cisco, Netscape on a worldwide basis.Our financing Organization provides a simple, single point of contact for financing, leasing and re-marketing products. It also offers innovative “technology refresh” programs that will automatically upgrade a customer's assets and dispose of the obsolete technology.And HP's commitment to be the best customer service organization in China has been a key differentiator and ingredient to ongoing development of our relationships. Our customer service unit was the first to receive ISO 9002 certification in China for total quality. To this day, none of our competitors has yet succeeded in achieving this distinction. We are also committed to bring our proactive consulting services to our customers, opening one new customer support center every two to three months throughout China —— most recently in Zhengzhou and Tianjin. Next week we will open our sixth full branch office in Shenzhen. And we'll open branches in Wuhan and Nanjing in mid-year, which will combine sales with customer support services. In the fall we will add a major call center with more than 150 staff, which will be opened as part of our new China HP Headquarters Office in Beijing.In total we will have more than 10 branches throughout China by the year 2000 offering both sales and support services —— plus several other offices dedicated only to support services.
I've spent the bulk of my time talking about how HP is helping customers build and manage their Extended Enterprise infrastructure. And it's probably appropriate that this discussion has taken most of my time, because that's the foundation upon which everything else is built.On top of that, we have added some fascinating electronic-business solutions that help customers use the Internet to re-engineer their business processes —— or to create entirely new ways of doing business. For example, the China Goods Order System (CGOS) is the first country-wide comprehensive and multifunctional commodity ordering system in China, which is approved by the State Planning Commission and will be managed by the Internal Trade Bureau.The aim for setting up this system is to build up a computerized commodity wholesale market in China, which can provide commodity trade information, offer transaction service and quicken wholesale procedure.The significance of the system's operation lies in introducing an advanced “network shopping”concept in China's commodity trade business.Let me comment briefly on the three solutions you see listed here.Our E-Business software is based on breakthrough technology from HP —— something we call the HP Changengine. It was developed in HP Labs, ... has good patent protection, ... and has been used extensively within HP to automate key business processes.The customer need we're addressing is this: Quite simply, businesses can't change their applications fast enough to keep up with the speed at which they want to change their business processes.
