I just saw on the Dallas Morning News website that Hewlett-Packard was buying Compaq. http://www.dallasnews.com/technology/461892_compaq_24e.html I didn't even realize there was the remotest of possibilities of this happening.
I read that earlier today (on CNet's news site) and was shocked. I don't get it. They're both in financial troubles and they both target the same industries/consumers, right? There are reports circulating that HP is doing it for Compaq's service division. Simply as a result of duplicity-of-effort, I wonder how many jobs this may axe... Compaq, as geeky as it may sound, is a Houston tradition. It's probably the most widely-recognized tech name headquartered in Houston. This will create a PC behemoth 2nd only to IBM in revenues. Wow.
They are still both heavily in the hardware business and not very profitable in the area of screwing parts together. Compaq bought DEC several years ago for the consulting end of the business and gradually shuttered DEC hardware. Neither Compaq or HP are noted for developing/driving the software business, so they still have huge hurdles to overcome even with increased size. NEC bought another computer assembler (Packard Bell?) several years ago to increase size (market share) and become more efficient. That was a bad move for NEC because of the tight margins in the PC hardware business. Mango ps A good thread!
I, for one, hope HP does buy them out. Me being a techie, Compaq just plain sucks. Im sorry, but I have had really bad expierences with them. I even had a few coworkers that used to work at Convergys (Compaq tech support) and they always had complaints. They had some decent computers in the past but are just now puting cheap crap in their machines because they built up the name. I for one, am happy with a custom built comp I got from UBM.
Compaq consumer PCs are about a half step up from Packard Bells . . . But their servers are EXCELLENT. I think this could be a good move for both companies, but I need time to think about it before I make a judgement on it either way.
Vengeance, But will HP + Compaq be able to assemble a desktop for the same cost as Dell? I don't think that they can beat the parts suppliers any lower on the volume prices that they get and two troubled companies does not always make a larger healthy company. Isn't the whole point to offer a turnkey solution (HP/Compaq desktops + HP/Compaq servers + HP/Compaq services) rather than (Dell desktops + HP/Compaq servers + perhaps the services) ? Letting Dell get/keep its nose in the tent on the desktop makes it somewhat harder to capture the services end which is where the profits are. <A HREF="http://news.cnet.com/news/0-1003-200-7046410.html?tag=lh">HP to buy Compaq for $25 billion</A> <A HREF="http://news.cnet.com/news/0-1003-200-7047156.html?tag=lthd">CNet Analysis & Commentary</A> Mango
Yeah, DoD...normally, it's my serious posts that make people puke...Nice to know that I'm back on track! Don't put it past McIngvale to try and get his name plastered all over the new place. He's moved past "local celebrity" status and is now known nationwide, being the "official furniture supplier" of the '96 olympics (whatever the heck that is), and now even delivers furniture all across the country within a week! Hopefully, the Rockets will think about something ELSE besides making a buck, and the new arena will have a decent name...At least "Compaq Center" had some flow to it, unlike most new arena names We can only pray...
Compaq is not know for their PC's. They made a big mistake by limiting the upgrade possibilties, much like Pack O' Crap. They put most of their research into servers, and this was their pride and joy. Personally, I did not care for their servers. They were great matched up with other servers, but not enough to put them over the top. Their desktop market sucked. Every company I knew that bought computers from compaq have switched to dell. I believe their new machines are better, but still suck compared to what you can get. But I can say, Compaq pays very well! I had a good friend intern there and they paid them almost double what other companies would offer. I really considered working for them.
The government is the biggest hypocrit on the planet! They target Microsoft for being a monopoly(and other things). Yet, this merger (so far) has their blessing? And DIGITAL makes great servers. Not Compaq. Compaq practically lucked out with the purchase of Digital. If they didn't have that, Compaq would be the KIA of computers.
What do you mean hypocritical? I only know a couple people with compaq/HP machines. Most others build their own, use a cheaper brand or buy dells. Same thing with servers. You still have a LARGE choice. Most people do not have the knowlege or experince to use anything other than windows. With this power, you can lock a user down to use certain software, heck, they even have the power to make them use certain machines. I had a computer with a IE password lock on it, and nobody knew what the password was. i couldn't even uninstall IE. Microsoft makes ****ty products. I can live with that. What I can't live with is the fact they CAN make better products w/out so many bugs. They do intentionally release crappy products, to squeeze more money out of us. With the popularity of Linux and their antitrust case, they are finally making a somewhat quality product.
<B>They target Microsoft for being a monopoly(and other things). Yet, this merger (so far) has their blessing? </B> I didn't realize Compaq/HP controlled 90% of the market?
This is bad news for the Houston economy. Thousands of additional jobs will soon be cut. I don't understand why HP would want to acquire a top-heavy, mismanaged organization like Compaq. Compaq realizes that they are getting their asses kicked by Dell in everything and will focus more on services rather than PC's. Dell will continue to dominate the PC, server, and laptop business. Because Dell sells direct to the customers they are able to eliminate the middleman, thus undercut competitors. Most of their profits come from servers (#1 in US) and notebooks (#1 WW). Gateway is just about done after posting a $20 million loss in Q2. Compaq sales continue to decline, and their service industry Sales are dropping, and profit margins are VERY thin in the PC line of business. HP will hand over PC operations to struggling Compaq, and IBM is diverse enough to not care about PCs. Dell will continue to "Crush Compaq" and will be the last man standing when all is said and done.
Almu, Compaq had great servers before they bought Digital. Buying Digital just solidified that market for them. That acquisition only happened about 2/3 years ago. Compaq was know for their servers before that ever happened.
According to Gartner's August numbers, Compaq is expected to hold onto a 26.7% market share vs. 18% for Dell. What's interesting is that their numbers predict Dell to catch up much faster. I know in the past that Dell's business model has allowed them to compete better simply because they have no inventory (or maybe it's minimal inventory). What this allows them to do is buy on an "as needed" basis rather than piling up inventory on parts such as RAM and hard drives and watch them depreciate like mad while they sit around awaiting assembly. Is this still true? An interesting thing about Gartner's numbers is the fact that Dell is gaining ground on Compaq and rather quickly. http://serverwatch.internet.com/news/2001_08_02_a.html Space City, I think Baqui99 was referring to US shipments, in which case, yes, Dell has technically passed up Compaq based upon preliminary estimates. However, Dell is still a distant 2nd in worldwide shipments based upon the same estimates. See hyperlink above.
