HP-Compaq merger – readers speak their minds

'Sheesh! How completely wrong can you be?'

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HP to buy Compaq for Battle of the Bulge

The HP-Compaq merger is the story of the week, and employees from all parties affected by it have something to say about our coverage.

First the ones we can't use. DEC stalwarts have employed gallows humour to deal with life for the past decade - so nothing new there. We got a couple from Nokia staff admonishing us for even daring to suggest that some clueless American behemoth may make an acquisition bid, to which we say: remember you're NASDAQ listed, and keep praying.

But in the interests of fairness, here's one from [name withheld] HP employee, who thinks we're nasty, British and cynical. As if that's a crime, and not a basic survival mechanism. Anyhow, ...

A little feedback on your article. Firstly, yes I'm an HP employee but this isn't an official communication, just and individual view from the inside.

Compaq has a robust and long standing NT presence which far outstrips HP's Intel based capabilities. They also have a growing services arm compatible with HP Consulting's stated target of becoming number one in IT consulting by 2005. Compaq has many customers who also by HP Unix equipment and storage equipment. All of these point toward a merger which makes sense. That's before you consider the R&D economies of scale (which are huge when you consider HP has to research Unix, NT, Linux, Storage, Printing and Imaging etc and so does Compaq. R&D last year accounted for 2/3 of HP's revenues) or the dominance in US domestic PC business, world wide imaging and printing, that HP and Compaq would enjoy once merged.

Based on the above I am surprised and confused that you seem so down on the whole process. You say that HP and Compaq will have trouble culturally, which is completely rubbished by the considerable number of ex-Compaq employees who now work for HP. You ask if this is corporate vanity, saying that it would be cheaper for HP to launch from scratch. I contest that, primarily due to Compaq's presence in many different accounts and their clear ability to produce world class products and services making them ideal for HP to buy both to remove a competitor from the market place and to realise economies of scale in their customers. The fact that you go on to claim that enterprise business has been abandoned just proves you know next to nothing about the way HP operates. You go on about storage where HP is by far the larger firm by saying that it is expensive and implying we run it at a loss. I don't know where you get your numbers but this is absolutely incorrect, not just is storage growing by 100% year on year but it is an ideal area for us to realise yet more economies of scale both from R&D, contractual, Sales and Manufacturing perspectives.

Sheesh! How completely wrong can you be?

You then go on to suggest we buy Nokia!!! Do you know what HP & Compaq do? Have you looked at telephone infrastructure market recently? (Erricson for example) Or Nortel! We have (both) strategic partnerships with them, why buy them? And what would Cisco think if we did? You close by saying this was a step backward. I say this is a step forward, together we can take on and beat IBM, Sun etc. and do it on our terms in markets we already dominate and whilst Dell, Sun, IBM, et al. struggle to get their houses in order HP and Compaq can take what we currently have and build something big, better, faster and more responsive out of our respective firms. There will be pain, there will be layoffs and plant closures and undoubtedly some customer confusion but let's give it 12 months and I assure you, you'll be eating your words and buying HP / Compaq stock as though it was going out of fashion

Reader Tom Welsh is treading in the footsteps of Eric Cantona (or Jean Louis Gassee) with his gnomic take on the world's first SirCam merger:-

Now taking over a company like [DEC] is like eating lots of fish that contain dangerous levels of mercury. The bird will soon suffer brain damage and fall from the sky, a scrabbling bunch of feathers. To be eaten by some tuna which in turn will suffer the consequences of its poisoned meal...

Personally, $25 billion doesn't seem too pricey for Compaq. I would think HP mainly wanted the customer base, but if they are careful there is a huge amount of good technical IP that they can use to strengthen
their existing product line.

Yup, customers. Where did they go...?

Finally, many thanks to punning Donald Burt, who suggested a list of hopeless puns for the merged outfit, climaxing with the suggestion:-


Which puts it in a nutshell. Many thanks, y'all. ®

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