Hewlett-Packard positions Voodoo as the PC division's Formula 1 team

10:40 - Monday 2 October 2006 by THG Reporting Team
Source: Tom's Hardware – Keywords: voodoo, hp, analysis

Hewlett-Packard positions Voodoo as the PC division's Formula 1 team

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A first indication about the thoughts behind the merger agreement can be found in the blog of VoodooPC co-founder Rahul Sood. He spends a great deal on explaining that it was a very rational idea to "plug into" a company that would allow VoodooPC to grow on the very high-end of PCs. But its may not be too obvious how a mainstream company such as HP can help VoodooPC on the high end.

In a conversation with HP and VoodooPC representatives, HP's chief technology officer of the personal systems group and future general manager of HP's gaming business unit Phil McKinney explained that HP isn't so new to PC gaming. "HP is already in the gaming space. We are the number one workstation provider in the developer space and we are the number one infrastructure provider in online gaming," said McKinney.

Of course, HP never really had a presence in the client area, if we leave a very limited edition higher-end system that HP offered under the Compaq brand back in 2004 out of consideration. But interestingly, the company claims to sit a huge pile of somewhat secret technologies and innovation, which it can't bring to the market with its current lineup of generic PCs. To take advantage of this innovation, the firm needed access to a brand and customers who are willing to pay for the privilege to get their hands on new tech first.

To connect with enthusiasts and create an opportunity to bring true "content enjoyment" systems, to the market, HP realized that it "needed a different DNA" than what it has available today. "We needed someone who could take that innovation, get it into the value chain and had customers who appreciate and understand that technology. And that was Voodoo," McKinney said.

Interestingly, Voodoo is not expected to change its face and become a mass-market player. HP's idea is to use Voodoo more like a Formula 1 team: Traditionally, such teams are maintained by large automobile makers such as Toyota or Mercedes-Benz not only for prestige or the fun of racing but to develop new technologies that will make it into their mainstream products over time as well as to leverage racing success for some advertising value.

A very similar approach could emerge from the HP-VoodooPC alignment. "If you look at the high-end extreme gaming space," McKinney said, "the technology what you see today will find its way into the mainstream a couple of years from now." He pointed to HP Labs' $3.5 billion R&D budget and 750 scientists and said that the company was looking for a solution "to accelerate the way to bring those extreme technologies to the market."

Looking to the Formula 1, which brought us technologies such as shifter paddles on the steering wheel, VoodooPC could become a vehicle that introduces new and proprietary technologies developed by HP in the hope that some of those new features will trickle down into the mainstream over time. Considering the fact that many of those technologies are and will be patented by HP, it isn't hard to imagine that even one successful innovation could pay for Voodoo's purchase multiple times without the need to sell large quantities of enthusiast systems.

It is also interesting that it was not HP that approached VoodooPC, but rather the other way around. Ravi Sood, co-founder of VoodooPC explained that the company was looking for a way to grow without the need to drop its prices and move more into the mainstream. "For the last one and a half years we have been thinking about how to innovate beyond our current means," he said. "You can imagine all the gamers at Voodoo who think bigger and beyond of what we currently can do. We needed access to serious innovation, serious engineers and serious scientists without having to compromise our quality and brand. We found that the only way we could do that is to plug into an R&D center like HP Labs. These guys are sitting on a ton of technology gamers have to get their hands on."

Brother Rahul expands on these thoughts in his blog: "HP is hungry for new innovations, and if you can imagine what plugging our corporate DNA into their labs would do - well, you get the picture. We are now in the position to create absolutely fantastic products in all categories. Voodoo and HP are complimentary opposites. This deadly combination of Voodoo's gaming/luxury PC expertise and our brand DNA and influence, with HP's innovations, scale, and leverage is going to lead to some of the most compelling machines money can buy."

HP as well as the VoodooPC founders expect that there will be no change how VoodooPCs will be developed, created and sold - the computers will be kept out of retail and sold exclusively through Voodoo's website. However, Ravi Sood mentioned that the company plans to expand into other markets such as "Germany and other parts of Europe."


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