Business Week: HP-Compaq’s Great Software Challenge

“Imagine that you run a computer company that oversaw
the development of seven different operating systems. It’s not
pretty. Microsoft (NASDAQ:MSFT)
struggled mightily to get the latest version of its OS, Windows XP,
out the door. Meanwhile, Apple had to delay the launch of its OS X
several times. What if either Apple or Microsoft had to deal with
shepherding seven of these puppies, and do so all at once?
Microsoft CEO Bill Gates might tear his hair out. Apple CEO Steve
Jobs would be a candidate for an ulcer.

So what about Carly Fiorina, CEO of the to-be-merged Compaq and
Hewlett-Packard (NYSE:HWP)
? We’ll soon find out. When it comes to operating systems, “they’ve
got Himalaya, VMS, Tru64, HPUX, and others,” notes Laurie McCabe,
an analyst with Summit Strategies. “It makes my head swim trying to
keep track of each one.” That could create a huge opportunity for
Linux, the so-called open-source OS that’s becoming an increasingly
prominent player in the field. If the new HP adopts Linux as its
primary platform outside the Windows arena, it would break down the
obstacles that have been standing in the way of Linux’ growth and
further market penetration. As for HP, by winnowing the OS plethora
and unifying software-development efforts around two systems,
Windows and Linux, the new company could create desperately needed
economies of scale — and perhaps save hundreds of millions of
dollars in wasted development costs. More important, it could ease
the integration of the two companies by giving them a common goal.
Smart investors will watch what Fiorina does very carefully.”

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