Can you explain Encompass' role and tell me why it's different from other user groups? Encompass actually started...
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out as DECUS, which was Digital Equipment Corp.'s user group. Of course, we were acquired -- just like the company was acquired, by Compaq. But prior to that, right before that acquisition, we decided as a user group that we wanted to be independent from Digital; even our staff at that point in time was Digital employees. And so we went out and incorporated, as an independent user group, and we named it Encompass, which really stands for Enterprise Computing Association.
The acquisition occurred with Compaq, and [CEO] Michael Capellos was thrilled to have a user group named Encompass because it still had that 'Q' thing going; it seemed like 'Compaq,' but it was all just coincidental that it ended up that way. So, we were Compaq's user group, which they didn't even know what they had, until they had it. We actually helped transition a lot of the users into the Compaq culture. And then of course we woke up one day, and we're now an HP user group. Can you explain what you mean when you say Compaq didn't know what they had?
Yes, for Compaq especially it was a good move. Because they were more, obviously, focused on the consumer end, and yet they had acquired this company that had a lot of enterprise customers, and so we helped transition that for them -- helped lead that for them in many ways. And then of course, we wake up one day and we're an HP user group, which, thank goodness, we still have the name; it was relatively independent, because if we had been DECUS at the time, that wouldn't have worked out. When you talk about independence, what do you mean? In terms of the relationship your staff has with the company? I know your association with HP is strong.
Oh, absolutely. When I say independence, it was just to spin it off as a separate entity, as a corporation on its own, so we no longer have staff members that were affiliated with Digital, and we no longer are part of the balance sheet. So, we became independent; we have our own balance sheet. That's really where it came from, is just to get us off the books. But are you ever nervous of having such a strong relationship, of being viewed as not completely independent or objective?
No, it didn't really have anything to do with that. It was more of a needing to be independent for financial purposes, and in order to be able to grow as a business on its own. And we've been very successful at it. There were a few rough years, but we're profitable and doing well. I've read you're waiving membership fees for former Interex members, the recently defuct HP user group. Has that helped attract them over?
Well, it's an opportunity for people to 'try before you buy.' To find out what our capabilities and what our services are as an organization. We've got four major goals for 2006 and 2007. We actually look at a two to three year plan when we're doing things in terms of our strategy; one of them is to expand our community, and as part of that we went out to embrace the former Interex members and partners, because we still have a home for them. That's been part of our big driver for the next couple years is to make sure we embrace those folks.
I can appoint people to the board, and one of the people I've appointed is Chris Koppe, who was formerly on the Interex board. So he's helping transition the organization as much as he can, rolling it into Encompass. And we've actually had quite a few members that have joined up. Do you have any number for that?
You know, I don't. I asked that number the other day. I think it's over 100 that have joined up. Again, it's marketing for us to make sure we get the word out and let people know that there's a place to go. When you say try before you buy, do you have annual dues, or how does it work?
We actually have two levels of membership. We have a free one, an associate member, which has a limited set of services, and then we have a full member, which is someone that actually has skin in the game, as we call it, and those are the kind of members we want. We want the people that are going to pay, not because of the fee -- we don't necessarily make any financial profit off that -- we give them a shirt … that type of stuff. I'd rather have 10,000 members that are active versus 20,000 members that don't have any skin in the game. How much is the membership fee?
It's $99. There might be a discount going on for $79 right now. I'm not sure if we raised it back up or not. Again, we're not in it for the money; that's not where our profits come from. It is a break-even effort. What is the difference between a free and pay membership?
More of the online services are available. We also offer discounts to conferences; basically the discounts to the conferences will pay for your membership. We've got more e-learning type of capabilities that are going to be coming along in terms of online bulletin boards. Another organization that we've embraced is the HP certified professionals; we gave a big discount to those folks when we were at the HP technology forum in Orlando. We had several hundred people sign up for that as well. Could you talk more about the e-learning opportunities?
We're looking at doing more certification type things. In terms of working with CPs, the Certified Professionals, in terms of being able to augment whatever services they offer in terms of professional certifications and us being able to help with that training peak. We talk to them about their pain points. There are a lot of pain points that they have in terms of being able to communicate as an organization because of the HP brand. They can't have an online bulletin board where they can communicate because of the branding issues. That's at least what I was told. HP has a huge brand police, I hear [chuckles].
That's one of the things, to be able to provide that mechanism for people to communicate, outside of just doing a news group, doing it within a controlled forum. We also have Webcasts that we do on a monthly basis. Usually we get a vendor to sponsor the Webcast, and then we either go internal to HP or we go to even our vendors and have them present; we've been talking to AMD about doing more of a discussion in terms of the Opteron processor. That's a huge business sale for HP, and a lot of the customer base is moving to that, or Itanium. What do you think attracts them to Opteron?
The AMD 64-bit processors run legacy x86 code natively. The AMD processors are among the fastest on the market today. Customers are seeing increases in the performance of applications running on a dual core Opteron. Opteron-based systems provide a higher performance at a lower cost versus other 64-bit processors on the market. Looking forward, what are your hopes for HP in 2006?
Well, gee, we hope they're highly successful. We're pretty happy with what we're hearing from their new CEO -- actually we're very happy. They really seem to have their focus in the right places. He's a results kind of guy. And he's getting the results. As long as they're profitable, we'll be profitable. They are our partner.
One of our major goals over the next couple of years is to foster increased involvement from HP and its business partner community, which requires expanding visibility within HP and the engineering community within HP. One of our charters is to provide an advocacy channel to the user group -- to the customer base -- to provide that bi-directional communication. It's critical for them to know what their customers are thinking just like it's critical for us to know, up front, what they're thinking. For us, as long as they're doing well, we're going to do well. And of course, we hope for the best. Would you say that's one of the differences between Encompass and other user groups?
Yeah, I would. There are user groups out there that I think almost have an adversarial relationship with the vendor; they're there to kind of pick on 'em. We've always taken the high road in that regard. We look at it as a business relationship, as a partnership, an extension of their marketing arm, another way for them to reach their customer base; we want to breed customer loyalty. That's what a user group is for. I think probably some other user groups, that's not quite their MO.
We've always been looking at it as a partnership.