On-Line Banking: HP Unit's Chief Aims To Be King of the Hill In

The head of Hewlett-Packard Co.'s financial services division is unequivocal about his goal.

"We're fighting to be No. 1 in Internet banking," said Olivier Trancart, general manager of the worldwide unit. Mr. Trancart, 43, succeeded Mario Fontana as head of the unit five months ago.

The career HP employee predicted that HP's strength in telecommunications would give it a leg up in financial services. As those two industries converge, "the battlefield will be the Internet," he said.

Last month Hewlett-Packard invested $10 million in Security First Technologies, the Atlanta-based Internet banking software provider. The money will go toward S1's development of a financial services portal.

"There was a need for us to link to development of a unique solution for North America. Now we're working on one for Europe," said Mr. Trancart, who most recently served as general manager of HP's enterprise accounts organization in France.

HP also entered into an alliance with Ariba Technologies. HP was selected as the exclusive provider of hardware, software, and hosting and deployment services for Ariba.com Network, a business-to-business Internet service.

With information technology spending worldwide in financial services estimated to be $180 billion, "my role is to take $40 billion," Mr. Trancart said. This means making business breakthroughs in Internet banking, customer relationship management, and customer service delivery, Mr. Trancart said.

Octavio Marenzi, research director at Meridien Research in Newton, Mass., said HP has suffered by keeping too low a profile.

"It has good technology, but as far as financial services is concerned, it has not been able to achieve the big breakthrough," he said.

"It is good that HP is marketing aggressively but it needs to have more offerings," he added, especially if it wants to expand internationally. "HP is only standing on one leg if it puts everything in S1."

Mr. Trancart's strategy is guided by a belief that banks have an opportunity to compete against Internet companies vying for financial services business.

"Banks have the best control of their customers but don't use it," he said. "The point of differentiation will be the speed at which they use technologies to keep control of their customers."

HP "has really caught on to the Internet," said Christopher Willard, research vice president at International Data Corp. in Framingham, Mass. "It will compete very hard in this space next year."

Last week, HP introduced the 9000 N-Class Enterprise Server, aimed at supporting functions like data warehousing, electronic commerce, integrated supply chain management, and technical computing.

The company expects the N-Class server to generate $10 billion in revenue over the next few years, up from the $6 billion earned from its predecessor, the K-Class.

The N-Class line offers the ability to route traffic to other servers if there is an overload on one.

"It prevents the World Wide Web from becoming the World Wide wait," said Patrick Rogers, worldwide marketing manager of HP's business-critical computing business unit. It guarantees up-time for hardware, the operating system, storage, and the data base.

Joanne Klein, vice president of technical services at Barclays Capital, said the firm has ordered four N-Class servers because "its central processing unit outperformed any other server we looked at. We expect performance will be increased by 60%."

Barclays, which has operated 450 HP servers in New York, London and Tokyo for the past six years, said the N-Class "promises to be the best performing server in our data center."

Said Mr. Marenzi, "It is not enough just to have a good server, you need something to run on that server."

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