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Secret CompaQ memo shows depth of Unix commitment

Company to plough money into Alpha and Linux too

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Any doubts that CompaQ is revising its Unix-Alpha strategy have been dispelled by a memo issued by the triumvirate running the firm. But CompaQ is revisiting it. On Thursday, the office of Ben&Frank&Ted issued an internal memo to staff showing how committed CompaQ is not only to Tru64 Unix but to the Alpha chip. The memo, forwarded to us by an insider at the company, shows that CompaQ will invest more money in Tru64 and Alpha. At the same time, our insider said, it will push the proliferation of Alpha-Linux servers. Here is the memo in full:- "From: Office of the CEO Sent: Thursday, July 01, 1999 11:15 AM Subject: Amended: UNIX Leadership Strategy "To: Compaq Worldwide Team From: Office of the Chief Executive Subject: UNIX leadership strategy "One of our most important tasks during the past few weeks has been to review areas where Compaq needs to invest for growth. In some cases, we need to expand our skills and capabilities. In others, we have opportunities to improve our market position and better support our business strategies. In each case, we are focused on incremental investments that will make Compaq even more competitive. "We want to let you know about one critical decision in particular. After an intensive evaluation of the competitive environment and the strength of our own solutions, we are expanding our commitment to Compaq Tru64 UNIX running on AlphaServers. This includes an additional $100 million investment in software partnerships, marketing and field programs. Our goals are very simple: to significantly increase our UNIX market share and to support our NonStop eBusiness strategy. "Tru64 UNIX on Alpha is not only strategic to Compaq; it is also highly valued by our customers. A recent customer satisfaction survey by Datapro, a market research company, ranked Tru64 UNIX Alpha systems number one in overall satisfaction, system reliability, performance, lowest initial purchase price and lowest maintenance cost. And customer demand for UNIX continues to grow as companies move more of their business operations to the Internet. That is why Tru64 UNIX on Alpha is a cornerstone of our NonStop eBusiness solutions. "Today, Compaq is behind Sun, HP and IBM in overall UNIX market share. But we see an opportunity to become one of the top UNIX companies by driving for leading positions in selected markets, including business intelligence, Internet and communications, high-performance technical computing and business applications. "To achieve these goals, we are taking several actions. "First, we are communicating our Tru64 UNIX on Alpha strategy and investment decisions throughout the company to make sure that everyone understands the significance of our commitment. Many of you will play a role in communicating our direction to customers, partners, analysts and the press. Our objective is to build market confidence in our Tru64 UNIX on Alpha strategy and solutions. "Second, we are increasing our marketing investments for Tru64 UNIX on Alpha at the local level. We will double the number of Tru64 UNIX and Alpha field specialists. And we are committing additional dollars for Tru64 UNIX on Alpha product advertising. "Third, we will develop enhanced relationships with key independent software vendors to expand the market for our combined product offerings. This is particularly important since the first decision most customers make is which application to use, followed by the best platform on which to run it. We will increase our joint marketing funds with our software partners by 400%. "Fourth, we will ensure that there is strong, end-to-end alignment across our sales and marketing teams. This includes goal alignment, aggressive sales training, competitive selling programs and the support of senior executives in the field. It also means making sure that our product, solution and service strategies are fully aligned. The Enterprise Solutions and Services Group and Sales and Marketing are working closely together to drive this alignment. "Like our enterprise competitors, Compaq will continue to support customers with a variety of solutions. Our UNIX strategy includes an aggressive program to make sure Compaq platforms are the best for running Linux, and continued support for SCO UNIX. We will leverage our leadership position with Windows NT, including the best interoperability with UNIX. "What is most important is our ability to deliver a broad range of NonStop eBusiness solutions. With our increased commitment to Tru64 UNIX on AlphaServers, we are sending a message to our enterprise customers that Compaq will invest in solutions that meet their needs. Your support is crucial to make this strategy work. "Ben Frank Ted" ®

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