The Race to $100 Billion

Fueled by one of it best quarters in recent memory, Hewlett-Packard Chairman and CEO Mark Hurd late yesterday said he fully expects his company to top the $100 billion mark in sales for the current year.

HP and IBM have been chasing that mark for most of this decade, and now it looks like HP will likely get there first. IBM reached $96.2 billion in 2004 but has fallen back to under $92 billion in each of the last two years.

If you have any doubts about the general health of the PC business, one look at HP's results should ease those concerns. The company's Personal Systems Group's revenues rocketed up 24 percent to $8.7 billion and leaped 30 percent in terms of unit shipments. Notebooks grew a healthy 24 percent with desktops up 9 percent. HP's Imaging and Printing Group was hardly loafing, either, with revenues up 6 percent to $7.2 billion for the quarter.

An important factor in driving HP's growth continues to be its various channel strategies, according to Hurd. This could be one reason why archrival Dell is now making noises about committing to the channel for the first time in a meaningful way (see next story...)

Dell Finally Tunes in to the Channel
In what could be a momentous turn of events, Dell is edging closer to establishing meaningful ties with resellers and distributors after almost a quarter-century of selling its products direct. According to Chairman and CEO Michael Dell, some of the reasoning behind this change of heart is that sales of its core products that tickle solution providers are growing faster than any of its direct sales avenues.

This should come as little surprise. Over the past couple of years Dell has been losing market share in the desktop market, most notably to Hewlett-Packard, which, in fact, surpassed Dell for the top spot in desktop PCs last year. HP and other competitors have, of course, flourished by selling its PCs through indirect channels for years.

Dell said his company will launch a widespread and concerted effort in the consumer retails space some time late this year or early next, although was reticent to provide specific details about that effort.

It's heartening to see a company as successful as Dell has been willing to change and not be bound by its past.

Google Stretches Its Search Capabilities
Hoping to maintain its lead in the increasingly competitive search market, Google plans to unify its approach to Web searching by coupling its existing service with those of more specialized searches that will range from basic news to videos. The company's new Universal Search technology became available Wednesday and will incrementally improve over the next year or two.

Further explaining the meaning of Universal Search, company officials said the typical Google search will collect results from a wide range of Google properties that present users with information about books, local information, images and video. For instance, the new searching technology will explore any site indexed by YouTube, Google Video and an independent site called

In further explaining the integration advantages of the new technology, Google said its Gmail users will be able to seamlessly jump to Google's calendar, Reader and a number of other services.

Quote of the Day
"HP is like the plain girl from high school that you see three years later and she is a bombshell, while Dell is the hot girl from high school who has gained 30 pounds," said Mr. Samir Bhavnani, research director of Current Analysis West, contending that Dell's heavier notebooks was one reason for its falling sales.

Mailbag: Security and the Military, Buzzing Over Ship Dates
Yesterday, Lafe asked readers what they thought about the Pentagon's decision to block soldiers' access to certain Web sites. Here's what some of them wrote:

It's no different from most corporate policies.

I tend to agree with the measure that the DoD took. The network in use is not the one the users pay for at home (i.e., FiOS). Would anyone make noise if this was a private company doing this with their own private network? Of course not. The person who pays the bill gets to make the rules regarding use. As a taxpayer, I'm OK with it.

From a security standpoint, I agree with it. Too easy for malware to infiltrate via the browser in this day and age. I know a couple of folks who are close to this. They are of the opinion that it is less about bandwidth. Also, as has been noted, e-mail and other forms of communication are still open to the fine men and women of the military.

My opinion is the Pentagon is being a "wise watchdog" in this case. Not all attacks on our great country come in the form of physical violence. Some of these also come in the form of a Denial of Service attack. Any outside organization that might be able to tap into the system can do an extreme amount of damage. I might add that I spent some time on active duty in the military in the communications field. Many times, this was in the form of encrypted, secure communications. Loose lips do indeed sink ships.

The fact is, there are many more methods of communicating now than there were just 30 years ago. This obviously makes it easier for the U.S. and our enemies to pass information from one location to another. The information being sent could hurt or help the U.S. in its activities all over the globe.

The argument that this decision by the Pentago will stop both good news and bad news from being sent back home is true, but the liberal press has NEVER liked the military and only reports the bad news. Good news doesn't sell and why make your enemy look good? Those of us who've actually served in the military know this all too well.

I'd really like to see the responders to this question include if they have spent any time in the military and in what field.

While I was assigned to the Naval Advisory Team #143 in Danang RVN, we spent daily shifts on voice radio communicating with other military units all over Vietnam and passing encrypted and unencrypted information.

Every so often, we would get a "nastygram" from the National Security Agency reporting that "On Monday you said this. Tuesday, you mentioned this. And yesterday, another person mentioned this. If you put all three conversations together, you can determine troop locations and movement." We were astonished sometimes by what could be extracted from seemingly unrelated conversations between unrelated groups of people.

Yes, I can definitely see the need for the restrictions. I am just surprised that the restrictions did not apply to personal computers also. Like screening our personal mail in Vietnam, I would think that they would be watching personal communications, as well (and maybe they are; electronic surveillance is pretty easy nowadays).

And with the recent announcement of Halo 3's ship date, we wondered whether gamers are just as fixated on release dates as IT folks. Based on your responses, it looks like they've probably got IT beat (and that sarcasm doesn't really translate well over the Internet!):

Are you serious? Pick up any issue of PC Gamer published in the last five years -- you'll see that's all we talk about! There is even a column in PC Gamer called 'PCG Release Meter' that's solely dedicated to listing release dates.

PC game release dates have slipped so much and so often in the last few years that game publishers often say the release date is "when it's done." There's a game called Duke Nukem 3 that is legendary for missing release dates. When was it first promised? 1999. What is the new release date? When it's ready.

I don't know if Microsoft is better at hitting their shipping dates with games and such, but I do know that there is a very high level of interest. My 17-year-old son ran in to my office last night to tell me the Halo 3 shipping date. Within five minutes he already had a countdown timer on his XP desktop and was telling me how many days:hours:minutes were left until he could get it.

He also went to sleep early last night so that he could get up at 5:00 a.m. to download the Halo 3 beta, which, not coincidentally, didn't ship on time. It was still unavailable for download when he had to leave for school at 8:00 a.m.

As someone on both sides of the fence (IT and gamer) I can tell you that hardcore gamers (which I am not) are much more passionate about software/hardware news. A much larger percentage of the core audience for games is teenagers. And as we all know, or can remember, everything you cared about at that age is life and death. Plus, they are still at the age when life seems to creep along; delays mean agonizing waits.

I don't think Microsoft blows consumer ship dates as much as it does its other ship dates. As complicated as games have become, they are still way simpler than a server OS. And this date is very much tied in to the Christmas buying cycle.

Do consumers care as much as IT folks? In a word, DUH. MS released a Halo 3 trailer in December 2006. This is arguably the most anticipated game release of the year. Read this.

Send us your 2 cents! Comment below or send an e-mail to [email protected].

About the Author

Ed Scannell is the editor of Redmond magazine.


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