HP Zeroes in on Digital Video Opportunities

Hewlett-Packard has achieved a significant milestone of which it isunderstandably proud. According to recent reports from both IDC andDataquest, two of the high-tech industry’s most respected marketresearch firms, the company has, for the first time, become the numberone revenue leader in the global workstation market.

The IDC report, entitled “Workstation Market, 2000: Year inReview,” states that HP’s combined workstation sales,including sales of both Unix and Windows NT machines, accounted for 21percent of the total worldwide workstation revenue, which it estimatedat $9.2 billion. Dataquest’s report echoes that finding,crediting HP with a 23.5 percent share of the workstation market, whichit estimated at $8.6 billion. Both market share numbers put HP into thelead of the workstation market for the first time ever.

In achieving its number one status, HP has demonstrated a rareability to navigate a treacherous market that has claimed more than itsshare of victims over the years. Since entering the workstation marketin the mid 1980s, when workstations first began replacing minicomputersas the platform of choice in graphics-intensive applications,Hewlett-Packard has seen a lot of respected companies fall by thewayside --- companies such as Evans & Sutherland, Apollo, Stardent,DEC, Tektronix, and most recently Intergraph.

Today, HP stands as one of the only workstation vendors competingsuccessfully in both its traditional Unix market and the newer, morerapidly growing Windows workstation market. It’s a feat that haseluded even SGI, the ultimate pioneer in computer graphicsworkstations.

To reach its current status, HP has had to be successful in sellingits workstation into a variety of different markets. Among otherthings, HP workstations are used in the engineering world for designand drafting applications, in the medical and scientific worlds forvisualization and simulation applications, in the financial andcorporate worlds for data processing, and in entertainment foranimation, modeling, and rendering.

But for all its successes, there’s one world that HP has yetto conquer, the world of digital content creation, or DCC. Although thecompany has enjoyed a great deal of success in the area of 3D modelingand animation, other pieces of the fast growing DCC market have eludedits grasp. At the moment, the company hovers somewhere around third orfourth place in that market, competing for market share with IBM, Dell,and Compaq. But that may soon change now that HP has drawn the marketsquarely into its sights.

“We agree with IDC that the video and gaming segments of theDCC market are becoming the volume markets for workstations,”says Molly Connolly, DCC marketing program manager for HP. “Andyou’ll see a reenergized focus in those areas for HP. We’reprobably number three in that market right now, but we’re goingto grow quickly into a more prominent position.”

The DCC market, says Connolly, can be divided into three keysegments: nonlinear video editing, 3D animation & post production,and cross media publishing. The latter segment refers to the growingpractice of taking content—be it text, still images, sound, orvideo—that previously may have been published only in print or ontape and reformatting it for multimedia distribution on the Web or onDVD.

“We’ve had some fantastic success in the area of 3Danimation and production,” says Connolly. “Our systems havebeen used for some time in a number of high profile Hollywoodfacilities, which has been great. Our goal now is to replicate thesehigh profiles successes into the mainstream DCC market where you findthe vast majority of the user community.”

In order to achieve its goal, HP has already taken a number ofconcrete steps. These include the introduction of a new line of HPworkstations, the development of close ties with a wide range ofindependent software vendors and board manufacturers, the introductionof an aggressively priced bundle of digital video production tools, andproactive support of the Linux operating system .

New Workstations

Hewlett-Packard began shipping the first two models in its new lineof workstations in May. It’s a family of workstations that HP iscounting on to take the company into future and into the top spot ofthe DCC market. Dubbed the x2000 and the x4000, the new machines offerunprecedented processing power, massive amounts of memory, and a wealthof video and graphics configuration options.

HP's new x2000 workstation. (Screen image courtesy ofAlias/Wavefront)

The x2000, explains Jeff Wood, HP’s product marketing managerfor personal workstations, is a uniprocessor system built upon thePentium 4 architecture. Its 400Mhz system bus is built around the Inteli850 chipset, giving it three times the bandwidth speed of the IntelPentium III system bus. It also offers up to 72G of hard disk space andup to 2G RDRAM. The higher end x4000 is a dual processor system builtupon the Intel Xeon architecture. Its 400Mhz system bus is built aroundthe Intel i860 chipset, and it offers up to 144G of hard disk space andup to 4G of RDRAM. Both systems can run Windows or Linux operatingsystems, and both can be configured with a variety of graphics andvideo cards, including cards from ATI, NVIDIA, Matrox, or Pinnacle.

So far, those who have seen the machines have been impressed. Forexample, Erik Noteboom, director of education of the digital arts atFull Sail Real World Education, an entertainment technology educationalinstitution and a long-time HP customer, says he’s lookingforward to using the x4000s in the school’s Visualize Center forreal-time image generation in virtual reality applications. “Thebeauty of the x4000 is the 4x AGP,” he says, “which willgive you really fast information transfer of images. Right now in ourVisualize Center, we only use computers we’ve made ourselves, andthat’s just because there wasn’t a vendor building acomputer with the speed we need. Now with the x4000, with the 4X AGPand the 400Mhz front bus, we’ll be able to do the real-timegraphics on those computers.”

Likewise, Rich Moore, assistant vice president of IT at ArtInstitutes, a school specializing in electronic media and arts and oneof HP’s biggest workstation customers, with more than 2500machines installed in 23 college locations, says he’s planning tobuy 700 of the new x2000s to replace some older HP Kayak workstations.Besides the speed of the machine, which he says is faster even thanHP’s high-end Visualize workstation, Moore says he’sexcited about the configuration options of the x2000.

“Our hardware committee went to NAB and looked at HP and allthe competitors, which we do every year or so, and there was unanimousagreement that HP still had the best machine out there,” saysMoore. “One of the things that makes the x2000 such a great valueis that there are so many options for how we can set the machine up.For example, we can have IDE drives instead of SCSI drives, and we canpick cards and things like that. You didn’t have those kinds ofoptions even on the Visualize workstations.”

Building Partnerships

That ability to offer its customers a wide range of video andgraphics hardware and software options is actually one of the keyreasons HP feels its new line of workstations is going to be soattractive to the DCC market.

“One of the real strengths we have relative to ourcompetition,” says HP’s Molly Connolly, “is the tightrelationship we have with both the independent software vendors (ISVs)and the graphics board manufacturers. We work hand-in-hand with them onmultiple levels. At the very start, we have our technical certificationand testing programs. From there we work very closely as a team effortwith our combined sales, marketing, and channel organizations. We go tomarket with our key partners strategically and tactically.”

From a technical standpoint, one of things that makes thesepartnerships so successful is the inhouse graphics expertise that HPhas developed over the years. In the past, that expertise has been usedto develop HP’s own proprietary graphics technology. Now, saysConnolly, that expertise is being used to optimize third-party graphicscards to run on HP systems.

“The new line of HP workstations don’t use proprietarygraphics,” says Connolly. “We’ve made the decision togo to market with open, industry-standard graphics. Depending on yourapplications, these new workstations can be configured with cards fromATI, NVIDIA, or Matrox. As a result, those same HP graphics engineersthat use to develop our proprietary fx graphics boards in the past arenow spending their time working with these industry-standard boardmanufacturers to enhance and fine tune their drivers specifically forHP workstations. This is a real, tangible value for our HPcustomers.

“Hewlett-Packard is truly a unique hardware manufacturer byhaving inhouse graphics engineering capabilities,” she adds.

The formal representation of this partnership between HP and theseindependent board makers is HP’s Leadership Graphics Program. It is a programdesigned to facilitate the speed with which industry leading graphicssolutions can be brought to market, while at the same time ensuring thesolutions have been thoroughly tested, certified, and enhanced by HPengineers.

Under this program, HP offers three levels of support for variousgraphics boards. Boards accepted into the highest level of the program,the Elite level, are boards that HP has tested, certified, warranted,and integrated into its workstations. Boards in the second tier, orEmerging category, are boards that HP has tested and warranted, butwhich have not been integrated into the workstations. Instead, HP wouldship these boards directly to the customer who can then install themthemselves. The third tier, or Distinctive category, includes thoseboards that HP has tested to be sure they work well with theirworkstations but which it will not sell directly to the user.

“What the Leadership Graphics Program means for ourcustomers,” says Connolly, “is that they can really be onthe bleeding edge of technology, able to access the newest video cardsas soon as they are announced. Our customers have the assurance thatthe latest cards from the top video card manufacturers have been testedby HP, but at the same time they don’t have to wait untilwe’ve gone so far as to integrate them into our system. It givescustomers a lot of flexibility, which is something folks in the gamingand 3D markets in particular, can really appreciate since they tend tobe very sophisticated and savvy users.”

Digital Video Production Bundle

But if there is one thing that best demonstrates HP’sdetermination to become a big player in the DCC market, it may well beits recent introduction of the Digital Video Production Bundle.

Available with the purchase of either of the two new HPworkstations, the Digital Video Production Bundle contains all thesoftware tools a user would need to create professional looking digitalvideo content and then publish it to CD, DVD, VHS tape, or the Web.Among the programs included in the bundle are the ADS Pyro Platinum DV1394 interface card, Adobe Premiere 6.0, Adobe GoLive, LIGOS TechnologyGoMotion, Boris Factory, and Sonic Factory Sound Forge XP.

Most impressive of all is the price. If purchased separately, theprograms would cost over $1300. But when purchased as a bundle with oneof the new HP workstations, the price is just $299.

HP is the first to admit that this new video bundle is not powerfulenough to meet the needs of sophisticated video professionals. Butthat, they say, is not the point. What it does do is put quality,easy-to-use video and cross media publishing into the hands of anyonewho would like to use video to deliver a message. And this bundle doesthat at an irresistible price point.

“Video,” explains HP’s Connolly, “isbecoming a mainstream tool for communication. And our goal is to makeit -- digital video --easily accessible to everyone. We’reespecially interested in getting these solutions into thosecorporations who are already using HP workstations for other purposes,such as for CAD or data processing. We want them to get excited abouthow they can use digital video to meet their various communicationneeds, be it for online training or marketing communications orwhatever.

“And once they’ve gotten comfortable with capturing,editing, and publishing their digital video,” she adds,“they can easily upgrade to a more complex solution set byinstalling a real-time video card from our partners -- Matrox orPinnacle Systems. We are fully certified with Matrox on their RT2500and DigiSuite LX cards, Pinnacle Systems with their DV500 Plus andTarga 3000 cards, and with Media 100 on their Finishproducts.”

Meanwhile, work has already started on the generation of HPworkstation products that integrate video specific features, andaccording to HP’s Jeff Wood, when these products roll out, itwill demonstrate just how serious HP is about becoming a player in thefull DCC market.

“This is a brand new market for us, but we’re going totake a strong hold here,” he says. “The Digital VideoProduction Bundle is a first step in that direction. It gets us in thefront door. But the next-generation machine that we’re definingright now is being designed specifically with the video editing marketin mind, and it will provide a full-blown video productionsolution.”

Given the success HP’s had to date in climbing its way to thetop of the workstation heap, there’s no reason to think itwon’t be able to achieve everything it says it will in the worldof video and digital content creation.
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