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April 2005



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Senior Vice President, HP
Director, HP Labs

Address at Software 2005
Sand Hill Conference
Santa Clara, California
April 27, 2005

© Copyright 2005 Hewlett-Packard Development Company, L.P.
All rights reserved. Do not use without written permission from HP.

It’s a pleasure for me to be here this afternoon. I think there is a perception of researchers that we spend our days locked away in a basement somewhere. But they do let us out from time to time. For that, I want to thank you for the opportunity to be here today.

About six hours ago, our chief strategy and technology officer, Shane Robison, started the day with a provocative statement: that while HP is well known for our hardware -- and more recently, as one of the largest global providers of IT services -- we are not as well known as a software company. Part of that has to do with the fact that we did not have a focused software strategy. As it turns out -- in Nora Denzel’s memorable phrase -- practicing “random acts of software” is not a good way to go.

We've changed quite a bit. As you can in see in both our internal organic investments as well as in our merger and acquisition activity, we've been quite aggressive recently. Now, after hearing from HP's Shane Robison, Russ Daniels ( Chief Technology Officer for our software business), and Martin Fink (who runs our Open Software business), I hope you have a clearer idea of HP’s software strategy and the level of innovation we are bringing to our customers and our markets today.

Software business growing for HP

Software is not only a substantial business for us, but a growing business. HP today has a $3 billion enterprise software business. Our OpenView network and system management software is used by every single one of the Fortune 50 to manage increasingly complex IT networks.

Our OpenCall software is used by more than 200 telecommunications companies – including 40 of the top 50 worldwide – to bring reliable and secure services to hundreds of millions of users. Eighty percent of the world's SMS messages flow through HP systems.

And an increasing number of enterprises today rely on our mission-critical operating systems, our clustering and high availability software; and our broad portfolio of storage, networking and communications software.

We hope that you’ve taken away that we have a unique strategy, focused on open, distributed software. Like many people, we've focused on a future built on software as a service, with grid and utility service models for delivering that. At the same time, we are not focused on building vertical stacks of proprietary middleware applications and databases.

We also hope that we’ve made clear that our approach to best-of-breed software is to focus our innovation in software on areas where we can add the most value, where we can make a difference, and then to work closely with industry partners to fill the rest of the pieces we need for our customers. That’s our business strategy, and that strategy also shapes our work in research.

Largest element for HP Labs

As software becomes an increasingly large part of HP’s business, it has also become the largest element in the business of HP Labs.

That said, I’d like to tell you about some of our software projects in HP Labs. As a company, our big ideas in software are focused on the infrastructure side. We are not trying to build the next iTunes or other software that is consumer-focused. The question we’re trying to answer today is: what is the software infrastructure required to help businesses today, and what will be needed as these businesses move into the future?

These projects range from ones strongly aligned with our business units to ones out on the frontier. Much of this new technology is being shaped differently than we've done in the past.

In many cases, we are in strong partnerships with cutting-edge enterprise customers around the world because we're seeing increasingly what drives a lot of software innovation is understanding where there's an intersection of the technology capabilities we have with critical business problems that enterprises are facing..

Inventing for HP

Before we get into the projects, let me give you some background on HP Labs.

As one of our Senior HP fellows, Alan Kay, has said, “The best way to predict the future is to invent it . . . ” That’s why we exist. HP Labs was founded in 1966 when Bill Hewlett and Dave Packard decided that HP needed to create a group dedicated to a longer-term view of technology issues while the business divisions focused on the day-to-day battles they had to fight. That was true then, and it's even more true today.

On one hand, we work with our business groups to develop technologies that create competitive advantage for them -- technologies that will help drive their road maps for new products and services. In some cases, we jointly define the strategies and road maps with those businesses. At the same time, our mission is to deliver breakthrough technologies, ones that define that whole new opportunities for HP.

In other words, while we have some encampments on the fuzzy frontier of technology’s future, we rarely work on technology for technology’s sake. What we focus on is where these technologies will make a difference, what customer will value it and how HP can build a business around our innovations.

Shift in focus

If you look at HP Labs programs over the years, you will see a fundamental change in how we’ve chosen to invest. For the first 25 years of our existence, most of the innovations coming out of HP Labs were primarily hardware and device innovations, because there were many opportunities based on unique hardware technologies.

These included things like the world’s first pocket scientific calculator, light-emitting diodes, thermal inkjet printing and HP's precision architecture RISC technology. All came out of HP Labs. There are still many opportunities based on hardware and device innovations. But more and more we are shifting our attention, looking at high we can build high-value software that allows us to leverage industry-standard components.

That's evident if you look at some of our innovations of the past decade -- our 64-bit architecture, something we call the digital media platform (which I'm going to talk about in a moment), photographic-quality printing and low-cost, better-than-film-quality digital cameras, model-based automation tools, shared applications servers, automated storage management, the first Utility Data Center and utility computing services such as our recently deployed Utility Rendering Service for the media industry.

Meeting business needs

Why the change? Put simply, it’s what our customers value. Even in the midst of the Internet bubble, CIOs were telling our research team that they were under increasing pressure to control costs and deliver more business value from IT, to be more agile and responsive within their companies.

Around 1998, we started to shift our focus. We moved out of some areas, like microprocessors, that were not giving us sufficient differentiation. And as we began to sort out our software strategy as a company, we increased our investment in software for the Adaptive Enterprise where we knew we could have more impact.

Today, in HP Labs, we are focusing our innovation in six fundamental areas. First, the area I just described, what I call reinventing the economics of IT. A grand title, but that is, in fact, our goal. This includes the Adaptive Enterprise, our Grid and utility computing work.

Second is printing and imaging growth in new areas. As many of you know, HP is fabulously successful in that area, but our real goal is to expand the footprint of HP's printing and imaging business beyond the desktop at home and in the office.

Third, digital entertainment --not just the devices you and I see in our homes, but also the infrastructure, the new backbone being built for that industry both in distribution and content production.

Fourth, technologies for services delivery. Most people think of services as a business that delivers technology. We do that, but we're also exploring how we can change the services business through the application of technologies -- the same way IT has changed manufacturing from being about capital and labor to being about information and inventory management.

Fifth, vertical industry solutions. These are high-value technologies we can develop for industry segments such as communications, media, manufacturing, financial services and so on.

.And finally the sixth strategy is in what we call disruptive and emerging technologies that are not part of the current landscape.

What all six of those strategies have in common is that software is at the heart of every one of them. I'd like to tell you about three specific programs where we are contributing to HP’s software strategy today.

Next-generation management software

Our first and biggest area of focus at HP Labs is next-generation management software. You heard Shane and Russ talk about the Adaptive Enterprise Grid and utility service models.

The Adaptive Enterprise is sometimes difficult to wrap your arms around, because it is actually three things at the same time: First, it is HP’s view of where information technology is going. Second, it is a company-wide program that covers services, consulting practices and products. And third, it's about some unique technology contributions focused in this area.

One of these technology components revolves around determining how we deliver a utility for computing. This is another area where there's confusion because sometimes people talk about utilities the way that they talk about grids, as this free resource that we're all going to use. One model of utility computing is in fact a provisioning capability, a public capability to provision IT.

But at other levels we see it as specialist services to provide dynamic outsourcing to specific industries or internal to corporations where people are looking for ways to more flexibly use the IT resources they have. And unfortunately a lot of times people go for the more Utopian side of that equation and don't realize that in a practical level when people talk about a data canter consolidation actually a lot of the elements of utility computing are happening today.

So in an Adaptive Enterprise, in this emerging service-oriented architecture, management software has to do a lot more than just collect and present data. You'd have to integrate information, to automate processes that are manual today. It needs to provide closed loop control. How can we build a system that doesn't require operators any time anything changes in the environment?

Making change easier

To us, the irony of management software today is that while business change is rapid, changes in IT systems are anything but. If you are introducing a new product, or making an acquisition, or merging two divisions, IT is guaranteed to slow you down.

The question for us was: How can we make IT more responsive to those changes? The answer is policy-driven, model-based automation. Let me give you one example of how we’re tackling this question.

In HP Labs, we’ve come up with a technology that was recently announced as part of our OpenView Automation Manager. Internally, we call it Quartermaster. It is model-based automation tool whose goal is to lower labor costs by taking labor out of the system, to lower capital costs by better asset utilization and to help customers run more robust systems by reducing the amount of manual operations that take place. And it gives us the ability to automate the response of an IT environment to changing workloads.

Reducing errors

We know that some of the biggest problems in data centers today are operator-induced. Given the large number of changes that take place in any data center, even skilled operators make mistakes. Just one extra comma put in the wrong place can make a whole system fail. These errors are very costly – and for most businesses, IT systems are an integral part of keeping their business running.

Just imagine an IT manager getting an urgent request that says: we need an e-commerce system that is capable of handling peaks of 30,000 queries per hour for a sales promotion starting two weeks from now. Today that means IT operations, IT architects have to build a system. They're writing scripts, they're modifying and editing things. All of these things can take a long time to do, and more time to verify that they're right.

Automating IT change

With Quartermaster we have libraries of models for all the key system elements. We have templates for key kinds of applications. An IT designer can simply drag in an e-commerce site on a palette available from a resource utility and enter requirements as policy.

Instead of a process requiring many weeks to build a new system, the system's description can be created in less than an hour. The deployment of it -- that is, the compiling of that specification -- can be done in a few hours. From that to a deploy test cycle can take less than a week. The result: a dramatic change both in time required and the level of confidence that people have when they deploy a system.

I mentioned earlier that we are a major telecom supplier globally, and the Labs has worked on that. If you think about a telephone switching center, you picture in your mind endless rows of faceless machines and no people. In building software for that environment, HP has developed a lot of tools that bring extremely high level of automation -- libraries that can be debugged and then reused over and over again, policy-driven models and more.

That's what our telecom experience has given us and we've applied a lot of that same learning to Quartermaster and some of the other tools that we've developed. IT automation is all about time saved, money saved, labor taken out of the system and dramatic improvements in reliability.

Also that level of automation also makes things possible for customers -- it allows people to experiment, to retune and redesign websites and services that, if manually deployed, would just be too risky and too time-consuming. So that's one of the other benefits that we get.

Building security

Another area where HP Labs has focused its attention on the Adaptive Enterprise is on the issue of security. We have a very simple goal when it comes to security: to secure access to the right information, by the right people, all the time.

Of course, traditional solutions to the security challenge include analyses of networks and systems and the installation of firewalls, intrusion detection systems and anti-virus software. But as we can see given the challenges we face, those tools are not giving us the answer we want.

At HP, we're looking at new approaches.

A program we call HP’s Active Countermeasures, for example, is a distributed scanning tool that imitates a computer worm’s ability to take advantage of vulnerabilities on certain machines, and gets to those machines first. We deployed this back in the period when Ninja and Code Red were infecting a lot of corporate IT systems. We actually deployed our own worm on our corporate network with the agreement of our own IT people.

What that allowed us to do, in fact, was to minimize the damage at HP in some incidents because we could identify systems early on and either notify users or we could take systems offline. So we are using that and in fact gained a measure of advantage from it, and we are now taking this technology to market.

Throttling viruses

Another program, “Virus Throttler,” actually mimics the body’s ability to limit damage from unknown viruses.

A lot of the problems we have with security today stem from the fact that we're in a race. Microsoft releases a patch, virus writers analyze it before you install the patch. Now, well-informed as to where the weakness is, they engineer a virus to attack. It's a cycle.

What we at HP Labs did was explore what signs and symptoms are signatures of attacks. And in fact there are a number of system parameters you can measure to start identifying the presence of a virus even if you know nothing about its actual structure.

Viruses need to multiply quickly, so we see systems where a virus may be trying to make 1,000 machine connections per second – very much abnormal behavior for any machine that we've studied. We respond by choking off that message flow. We don't actually shut the system down, but we reduce throughput to that system enough so that it gives IT staff time to respond.

In a way, it’s a corporate immune system for computers. And it is now shipped with all HP blade servers. It’s also available in the HP ProCurve Ethernet switches.

Keeping systems safe

Of course many viruses run when you launch an email attachment, open a file with macros, or visit web pages that use scripts. Unlike some malware that depends on security holes in a piece of code, these kinds of viruses aren’t exploiting flaws; they’re using the system the way it was designed to be used.

We have a program, with the internal name of Polaris that is designed for Windows XP to stop virus attacks on standalone devices. This innovation from HP Labs allows users to configure most applications so that they launch with only the rights they need to do the job the user wants done. This simple step, called enforcing the Principle of Least Authority, gives so much protection from viruses that there is no need for the standard pop-up security dialog boxes.

The Alpha release of Polaris is available now under a controlled roll-out. We have users at HP Labs and have started customer pilots.

Trust Record

Lastly, in information systems, one of the key security issues is: how do you know that your data was never compromised? Services delivered by utility computing require increasingly complex infrastructure, automation, and administration processes. But why should customers trust that their transactions will be secure, or their confidential data sets will remain protected?

In HP Labs, we have developed a technology we call “Trust Record,” that does a complete audit of your system at all times, and generates a monthly report that looks a bit like a utility bill, showing what happened, and what actions were taken. It helps businesses comply with all the regulatory compliance and other transaction security issues of Sarbanes-Oxley, HIPAA and many others.

Software to manage networks

Another area we are building software assets in is managing networks and computing used in digital media applications.

This is one of the keys to HP’s digital media strategy. The entertainment business is changing as two businesses collide. On one hand, you have traditional media and entertainment companies. And on the other, you have network and service providers. Both industries see enormous opportunities.

There are huge problems in providing a software infrastructure to enable a lot of these new capabilities and do it in a way that provides the security that content owners expect, at the same time it delivers the economic efficiency that content owners and network providers need.

Digital Media Platform

HP is developing software that builds protection and connections across those networks today. At the core of this strategy is a technology we call the Digital Media Platform.

One of the problems today is that too many media and entertainment companies are stuck halfway between the analog and digital worlds. For movies, once content is shot, even if it starts out as digital media, it’s still a multi-step, multi-week process to make sure it’s logged, tagged, and shipped properly – which is time-consuming and expensive. Once it gets to post-production, even if it is in digital form, it has to be converted back to analog, just so key stakeholders -- from directors to investors – can view it.

But rather than creating content many times, and then distributing it many times – imagine if there was a way to create content just once, and then distribute it wherever it needs to go – whether it’s a movie theater, an airline, pay per view or a film festival. Imagine if you could do all the work necessary throughout your process with just one window, a digital dashboard.

Automating digital workflow

That is what we announced a year ago – to build a “create once, distribute many” platform for the media and entertainment industry, and to build it on an open industry standard foundation that would help all entertainment entities, from TV to movies to radio, make the full digital transition a reality. The overall goal is to help automate the digital workflow, making the entire end-to-end process faster, more reliable, more flexible, more secure, and more cost-effective.

So, the HP Digital media platform is an industry-standards-based framework of enterprise software, hardware and services which allows media companies to digitize, store, process, manage, distribute, and archive complex media assets securely and efficiently. Just one week ago at the Conference of the National Association of Broadcasters, we announced that with our partners at Ascent Media Group, the first real-world implementation of the HP DMP is up and running at Sony Pictures Entertainment.

As proof of how well it works: by mid-April, they had hoped to digitize 100 titles using the DMP. Instead, they’ve done over 600.

We are now working with our partners at Warner Brothers to use the same technology to complete a digital end-to-end process that will save time and money. You will soon see other media companies added to that list.

Looking into the future

The innovation I’ve talked about so far – from automation to digital media – is being developed and deployed today. But we’re also looking at the future – sometimes 10 years or more out – asking what the world might look like then and the software innovations that could redefine the ways we do business.

One interesting area of research is information services. The idea is to use software to break through all the clutter and cognitive overload in our information-saturated world and find those things you care about.

Another question we’re asking today is this: in this connected, networked world of the future, how do we efficiently allocate networked computing resources? If we really do move to a grid or utility model, where computing power is delivered as a service like electricity by a central provider, how do we deliver it?

Allocating resources with Tycoon

As long as the number of users is small, the problem scales well and resource allocation can be done socially. But as soon as the grid becomes large, any such system is likely to break down as too many people compete to use the same resources. It’s easy to imagine that valuing and prioritizing billions and billions of transactions will be impossible for any one node. So, how do we maintain order? Is there a market mechanism that can be employed?

That is the very question being asked today by one of our Senior HP Fellows, Bernardo Huberman. He’s developed a futuristic piece of software we call Tycoon, which turns computing grid resources into a kind of stock market. As a user, you start by opening a bank account and getting credits.

As a user, you place bids for various resources. It’s proportional, so if you bid $10 and another user bids $5, you get two-thirds of the resource and the second user gets one-third. If your deadline becomes more urgent, you can bid more. The more you use, the more the software deducts credits from your account.

Bernardo’s team tried Tycoon on a cluster of Linux servers distributed between our Labs in Palo Alto and the UK. It did well, and we’ve now given it to CERN, the European research lab best known to people in this room as the original home of the Web.

Reinventing the GUI

Another project we have underway is being led by computing legend Alan Kay, who I mentioned earlier. Thirty-five years ago, Alan was one of the original researchers at Xerox PARC, a group of researchers that came together to imagine and then create much of the personal computing universe as we know it today.

What is clear is that not a whole lot has changed in those 30 years. The key concepts of a desktop, overlapping windows, icons, were all developed and then built upon layer by layer over the past three decades – but haven’t changed fundamentally since then, even though a lot of other things have.

First, there have been enormous changes in the power of computing with high performance networks and processors, and dramatic increases in memory and storage . . . and second, even more important, is the changing role of computers. Today, our computers are in constant communication. We use technology much more socially than we ever imagined, and the sharing of information is much more complicated. How could it be easier? How could it be more efficient? If we were going to create the computing universe again knowing all we know today, what would the system look like?

That is the question Alan and his team are working on today. The team has come up with new software called Croquet. It’s a new operating system, has a new user interface, and is a new communications system all at once. The prototype is in development today. Stay tuned. This software creates an amazing virtual world -- the closest thing you’ll ever see today to scalable virtual reality.

As Alan likes to say, “in this world math wins”. What he means by that is this environment is built on a peer-to-peer architecture and the more peers that join, the more scalable and richer an experience it becomes.

Industries reshaped by IT

In the end, the word software is a lot like the word, “electronics.” It means a lot of things to different people. For us it is something that is fundamental to all of HP’s interests; and it is a tool that will continue to change business and that will continue to change the way we live.

We see the future continuing to evolve with open, service-oriented architectures, grid and utility service models as well as newly emerging technologies like the Semantic Web

IT will require management solutions that enable companies to improve the effectiveness of their IT investments by automating and virtualizing IT operations. And it will rely on the strengths of both commercial and open source software,

This view of the future -- for general IT infrastructure, for services, and for industry-specific solutions -- is what is shaping the projects we have at HP Labs. And HP’s increasing focus is on developing both our existing and new software businesses.

It is an exciting time for all of us in this business, as industry after industry is being reshaped by software technologies. We look forward to working with quite a number of you on hleping to reinvent these industries.

Thank you.

Related links

» Software innovation: It's what our customers value (Feature story)
» Dick Lampman bio
» HP executive team
» Software 2005

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Open View Automation Manager (demo)

» Security solutions - HP Virus Throttle technology
» HP Services: Security IT

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» Quartermaster: A resource utility system
» A capacity management service for resource pools
» Virus throttling (overview)
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» Polaris: Virus safe computing for Windows XP


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