NEW YORK, Oct. 8 - When Hewlett-Packard spun off Agilent Technologies in 1999, it appeared that its interest in the life sciences went with it. But David Valenta, HP’s global marketing development manager for life sciences, told GenomeWeb that the company is a solid contender in the life-sciences computing market.
Despite HP’s relatively late entry into the sector and stiff competition from Sun, IBM, and Compaq, Valenta remains confident that the company’s strategy of partnering with software and solution providers will give it an edge in the market.
“We focus on designing and building the best computers, the best network, the best infrastructure, the best storage, and so on, and we let the life sciences software and solutions experts design the products in the various vertical markets,” he said in a recent interview.
Valenta said that HP has identified life sciences as a “significant growth area” over the next year.
Some industry observers have suggested that HP’s proposed acquisition with Compaq, announced last month, would give the combined company a competitive advantage over IBM and Sun in this market.
Valenta declined to comment on the acquisition or how it might impact HP’s life science activities, but noted that although HP didn’t enter the life sciences market until two years ago, it has already secured a number of important partners and customers in the sector and is increasing its presence significantly.
First Fruits in Pharma
HP’s entry into the life-sciences market began by building relationships with software and service providers with whom it already had strong relationships in manufacturing and IT infrastructure to serve large pharmaceutical companies.
In addition, HP has forged a number of academic partnerships, including the University of Washington in Seattle and Washington University in St. Louis, through which it helps ensure that university code runs on HP equipment. Valenta said the company is currently finalizing a deal with “a large university in the US” for a 242-CPU Superdome Unix/Linux system for life sciences and computational chemistry.
While admitting that HP had yet to fully penetrate the biotech sector, Valenta said that “you can bet we’re acting on our opportunities.” Current partners within this sphere include Viaken Systems, Lion Bioscience, and Geospiza.
HP’s plan is to “offer biotechs something they can’t get from someone else,” Valenta said. That may come in the form of financing—an option HP used in its partnership with Viaken—or in technical strengths not available from competitors.
Viaken, which uses HP’s OpenView platform for its managed services and hosting, may be a crucial partner as HP seeks to gain more market share within the sector.
“The top-tier market that [hardware] companies have sought is limited in the pharmaceutical and biotech market,” said Keith Elliston, CEO of Viaken. “HP was progressive in partnering with us to gain access to the mid-tier market, which has the biggest share and opportunity.”
Furthermore, Elliston predicted that the likely HP/Compaq deal would “strengthen our position and their position in reaching the small- to mid-sized biotech.” He noted that Compaq’s focus on high-performance computing for the life sciences should complement HP’s reputation for “highly reliable, maintainable systems.”
The Itanium Issue
Valenta said that the Itanium chip, which HP developed with Intel, offers a number of benefits for life-science customers, particularly smaller companies. He noted that HP-UX is the only commercial Unix currently available on Itanium. The advantage is that “customers can buy one piece of hardware and then decide what they want to run on it—Linux, NT, HP-UX, it doesn’t matter.”
Valenta added that HP-UX applications are binary compatible with Itanium, “so you don’t have to recompile if you don’t want to, which is another advantage for our life science customers.”
“We’re excited about Itanium,” said Elliston. “We like to find platforms that can support multiple operating systems and our data structures and our compute needs really benefit from a 64-bit architecture.”
Elliston added that “Itanium really takes on a new kind of importance” in light of Compaq’s recent decision to phase out its Alpha technology in favor of the Itanium architecture. The HP/Compaq deal should reassure Compaq’s Alpha customers that the transition to Itanium will be a smooth one, Elliston said.
Valenta said that HP also offers enabling tools, such as its Praesidium suite of security software, in which the life science sector appears to be interested. “Pharma is very concerned about security,” Valenta said, noting that a pharmaceutical company recently opted for HP’s solutions “strictly because of our robust and complete security products.”
Although life sciences is currently a very small portion of HP’s business—as it is for all hardware providers—Valenta cited IDC’s recent forecast for 52-percent growth over the next three years as evidence that the life-science market will be an important focus for the company’s technical computing business.
“Even if that’s an over-optimistic figure and it’s only 30 percent growth, that’s still good,” he added.
But HP is certainly not the only hardware provider to recognize the enormous revenue potential within the life sciences niche. IBM’s vice president of life sciences, Caroline Kovac, told Reuters last week that the life-sciences market is a “triple-digit growth area” for her company, and that IBM expects the market to generate sales of $1 billion or more within three years.
A merger with Compaq should only improve HP’s chances for beating IBM in this market, Elliston said. “Before the [merger announcement], if you said, ‘What is IBM’s competition in this space?’ it didn’t look strong,” he said. “But with HP-Compaq you combine HP’s very strong professional service base with Compaq’s life science focus, and you’ve got an immediate competitor to IBM.”
This article originally appeared in BioInform , a weekly newsletter published by GenomeWeb.