When Hewlett-Packard spun off Agilent Technologies in 1999, it appeared that its interest in the life sciences went with it. But David Valenta, HPs global marketing development manager for life sciences, told BioInform that the company is a solid contender in the life sciences computing market.
Despite a relatively late entry into the sector and stiff competition from Sun, IBM, and Compaq, Valenta is confident that the companys 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.
Valenta said that HP has identified life sciences as a significant growth area over the next year.
Some industry observers have suggested that HPs proposed merger with Compaq would give the combined company a competitive advantage over IBM and Sun in this market. Compaq has already secured a number of key clients in the sector, and some see the merger as proof of HPs renewed focus on the life sciences.
Valenta declined to comment on the proposed merger and what impact it may have on HPs life science activities.
He noted that although HP didnt enter the life sciences market until two years ago, the company has already secured a number of important partners and customers in the sector and is increasing its presence significantly.
First Fruits in Pharma
HPs ebntry strategy for 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. We provide solutions all the way from research through clinical trials, said Valenta, noting that most hardware providers have limited their focus to the research and discovery end of the pipeline. Most of the people buying solutions for clinical trials buy our mid-range and high-end servers, Valenta added.
In addition, HP has forged a number of academic partnerships ó including the University of Washington in Seattle and Washington University in St. Louis ó 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, You can bet were acting on our opportunities. Current partners within this sphere include Viaken Systems, Lion Bioscience, and Geospiza.
HPs plan is to offer biotechs something they cant 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 HPs 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 merger would strengthen our position and their position in reaching the small- to mid-sized biotech. He noted that Compaqs focus on high-performance computing for the life sciences should complement HPs 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 ó Linux, NT, HP-UX, it doesnt matter. Valenta added that HP-UX applications are binary compatible with Itanium, so you dont have to recompile if you dont want to, which is another advantage for our life science customers.
Were 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 Compaqs recent decision to phase out its Alpha technology in favor of the Itanium architecture. The impending HP/Compaq merger should reassure Compaqs 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, which is of great interest to the life science sector. Pharma is very concerned about security, Valenta said, noting that a pharmaceutical company recently opted for HPs solutions strictly because of our robust and complete security products.
Although the life sciences is currently a very small portion of HPs business, as it is for all hardware providers, Valenta cited IDCs 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 companys technical computing business. Even if thats an over-optimistic figure and its only 30 percent growth, thats still good, he added.
But HP is certainly not the only hardware provider to recognize the enormous revenue potential within the life sciences. IBMs 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 HPs chances for beating IBM in this market. Before the [merger announcement], if you said, ëWhat is IBMs competition in this space? it didnt look strong, said Elliston. But with HP-Compaq you combine HPs very strong professional service base with Compaqs life science focus, and youve got an immediate competitor to IBM.