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Technology Stocks : Compaq

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To: hlpinout who wrote (46406)2/16/2000 6:45:00 AM
From: hlpinout  Read Replies (1) of 97611
 
Compaq looks to spread its server vision
By: Stephen Shankland, CNET News.com
2/15/00 8:35:00 PM
Source: News.com

SAN FRANCISCO--By 2001, Compaq Computer will spread its
Windows-based computers into every niche of computing, chief executive
Michael Capellas said today.

The end result will be "breakthrough enterprise economics" in 2001, in
which big business will be able to use comparatively cheap Intel-based
computers instead of the proprietary hardware and software used today to
run demanding jobs such as extremely busy e-commerce databases.

The effort will include a 32-processor
Unisys server that Compaq will sell under
its own name. That product line will use
current Intel chips when it debuts midway
through this year but will be available with
Intel's new Itanium chip later this year,
Capellas said at a keynote address here
during the three-day conference for the
unveiling of Microsoft's new Windows
2000 software.

The vision to push Intel to ever-greater
heights isn't surprising, given Compaq's
affinity for what it calls the
"industry-standard" computing philosophy,
with numerous competitors selling very
similar computers, invariably using Intel
CPUs and usually the Microsoft Windows
operating system.

But what is surprising is how little the vision depends on its own
old-school hardware designs Compaq acquired in the late 1990s when it
was in a stronger financial position. Compaq bought Tandem Computer in
1997 and Digital Equipment Corp. in 1998.

Compaq hasn't always been successful in its long-running push to spread
industry-standard computers into more demanding markets. Its
partnership with Microsoft to boost Windows NT on computers with
Compaq's Alpha chip crumbled last year, and Compaq's financial
struggles also led it to cancel its plans to bring its own version of Unix to
Intel's Itanium chip.

In addition, most analysts agree that a 32-processor Intel server doesn't
really deserve the "industry-standard" appellation, because such systems
require a very specialized design. Standard designs for Intel servers top
out at eight processors, where many companies ship computers built
around Intel's Profusion chipset.

But Compaq has done well with the eight-processor machines, Capellas
said. The company has 90 percent market share for the servers. The
company shipped more eight-ways than some projected the entire
market to be, he added.

Going into the future, Compaq will rely on clusters of multiprocessor
servers connected over a high-speed connection, Capellas said. Compaq,
IBM, Hewlett-Packard, Intel, Sun Microsystems and others are working
away on creating the "Infiniband" technology that will make this
interconnection possible.

Also at the keynote, Capellas said the company had high hopes for its
iPaq, a PC that discards older connection technology and is intended to
be easier for corporations to manage than today's comparatively complex
desktops. The company expects to sell $1 million worth of iPaqs by
year's end, a company representative said.

Capellas also disagreed with a Gartner Group projection last week that
about a quarter of companies would experience some problem upgrading
to Windows 2000.

"I do believe the rollout will be a lot smoother than Gartner Group
indicated," he said.

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