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Compaq gets PC boost from Gartner

Manages to square Tandem, DEC acquisitions

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A note from the Gartner Group to its customers has claimed that Compaq had solved many of its difficulties with its acquisitions of Tandem and DEC (Digital), as well as channel problems, and should be a "strong short list" candidate when corporate buyers are putting PC acquisitions out to tender. The report, called Compaq's PC Business: going forward or going nowhere, says that despite adverse financial conditions and market share indications, the company's strategy in both the notebook, PC and server markets shows steady progress. According to Gartner, many of its customers were concerned that "inner turmoil" at The Big Q could affect the company's position in the PC market. But Gartner tells them that Compaq's offerings and strategy are technically sound and also feature competitive. Although Compaq, like HP and Big Blue, are in the midst of a big sea change as they move to direct models, the firm is now able to deliver results, the report says, although it is likely to be between one and two years before it reaps the full benefit of these changes. Further, Gartner adds, Q still dominates the market for servers in both Europe and the US, and its "loyal" customer base has been aided by SAN (storage area network) and management offerings. According to the report, prices of Q servers can be as much as 30 per cent over equivalent pricing from Big Blue, Dell and HP, but will drop this pricing if faced with stiff competition from the other vendors. Delays in delivering innovations are often viewed by corporate customers as in their favour, rather than to their detriment. Q desktop PCs, like other offerings, are difficult to differentiate in a market which is rapidly becoming a commodity market, but Gartner says that Compaq's so-called "beyond the box" approach, which includes service and support, will aid the firm as it competes. Further, Gartner claims that boxes such as the iPaq are "precisely the type of offering" Compaq needs. Gartner thinks the iPaq will cannibalise Deskpro sales by the end of the second half of next year. Notebooks from Compaq have also now made steps after turbulence as it sought to consolidate the DEC (Digital) line of notebooks. ®

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