Meanwhile, in Palo Alto

While the brouhaha continues in Houston, Hewlett-Packard in Palo Alto is quietly facing the same challenges. Like Compaq, H-P sells PCs through distribution channels, as well as servers and legacy systems (mini-computers). What would it do about this new e-commerce thing?

According to analysts, quite a lot. Zona Research of Mountain View, California calls this “the third coming” of H-P. Its “Commerce for the Millenium” program is aimed at over 3 million businesses, and will “pre-integrate” a variety of merchant software and services on H-P machines.

If H-P is your vendor, it’s great they’re going to manage your merchant set-ups, card processing, banking, and hosting. If you like H-P’s OpenView network management, OpenPix image processing and WebQoS traffic management, so much the better.

But I couldn’t help thinking, as I went through the announcements, that there was something missing. In a word, merchandising. H-P’s store is not the best designed on the Web, and relies exclusively on the H-P brand to make its pitch. There is no Web merchandising help in the new H-P bundle, either. Neither is there the kind of back-end fulfillment help that would let a company move smoothly from a network of stores to a central warehouse and network.

I’m sure you have other hard questions H-P salespeople will have to answer. If H-P isn’t your vendor, why should you switch now? If H-P is your vendor, where have they been the last few years? If H-P is so world-class, why aren’t the leaders in credit card processing, banking, or store-building software in this bundle?

There are two kinds of prospects out there. Some businesses are established in the physical world and need a cyber-presence. Why should they change their banks or merchant processing arrangements? Other businesses have no physical presence but big cyber-ambitions. Why should they put all their eggs on a company that’s a newcomer to this market?

Welcome to the Millenium, H-P.

What do you think? Let’s talk about it.

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