Feeds

180-day plan to transform Compaq into services behemoth

Radical simplification

  • alert
  • submit to reddit

Build a business case: developing custom apps

Compaq intends to focus more on software and services in a restructuring plan that involves the sale of its Alpha processor division.

The possible divestiture of Alpha is part of a much wider plan by Compaq to transform its business over the next six months.

According to a memo from chief executive Michael Capellas (obtained by The Inquirer), Compaq will place more emphasis on the sale of industry specific technology and services.

Volume hardware products will remain strategic to the company. But the company needs to 'drive radical simplification' through the way in which it conducts business.

In the last two years Compaq has concentrated on leading the market as an Internet infrastructure provider. but the restructuring will see it place far more emphasis on software and services; this will make the firm more like IBM in its character.

The transformation calls for deeper cost-cutting measures, including inventory cuts, with the aim of saving $200 million per quarter.

Alongside this, Compaq aims to improve software development activities and building its services business, possibly through acquisition (for which it has budgeted $500 million).

Within the next three to four years, "our goal is to increase services from about one-fifth of Compaq's revenue today to one-third," Capellas said in the memo. This means growth rates of 40 per cent per annum, he added.

The company also wants to regain its leadership in the SMB market, the fastest-growing IT sector. ®

Related link

Capellas memo

Related Stories

Compaq wields cost axe
Compaq buys US systems integrator
Compaq AlphaServer wins TPC Bragging Rights
Compaq Alpha box steals 9i benchmark laurels
Compaq top of the SAN tree
Compaq waves white flag in PC price war

Boost IT visibility and business value

More from The Register

next story
Kate Bush: Don't make me HAVE CONTACT with your iPHONE
Can't face sea of wobbling fondle implements. What happened to lighters, eh?
Video of US journalist 'beheading' pulled from social media
Yanked footage featured British-accented attacker and US journo James Foley
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
Ballmer leaves Microsoft board to spend more time with his b-balls
From Clippy to Clippers: Hi, I see you're running an NBA team now ...
Online tat bazaar eBay coughs to YET ANOTHER outage
Web-based flea market struck dumb by size and scale of fail
Amazon takes swipe at PayPal, Square with card reader for mobes
Etailer plans to undercut rivals with low transaction fee offer
Assange™: Hey world, I'M STILL HERE, ignore that Snowden guy
Press conference: ME ME ME ME ME ME ME (cont'd pg 94)
Call of Duty daddy considers launching own movie studio
Activision Blizzard might like quality control of a CoD film
US regulators OK sale of IBM's x86 server biz to Lenovo
Now all that remains is for gov't offices to ban the boxes
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 10 endpoint backup mistakes
Avoid the ten endpoint backup mistakes to ensure that your critical corporate data is protected and end user productivity is improved.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Rethinking backup and recovery in the modern data center
Combining intelligence, operational analytics, and automation to enable efficient, data-driven IT organizations using the HP ABR approach.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.