Q&A: Compaq CEO likes healthy competition page 3: Strategic directions
Then there are a number of strategic
directions. First, toward simplicity. Second,
toward "e-life" use of the Internet with all
kinds of devices: computers, television,
entertainment. And third, into wireless use
of the Internet and electronics on the road.
Trends tell us that the Internet is growing
along the edge. In that area I want one
button [that] does everything or at least lets
me choose all options.
U: Your board is in
agreement with these
directions?
C: No question. They
made changes in
management here to
get a fresh vision.
They wanted a
change. Especially in
a $42 billion
organization, with 62,000 employees and
10,000 contractors, you have to drive
change.
U: Ed Zander told me in a recent interview
that Sun is the leading server company,
like their ads say, supporting the Internet?
C: The enterprise-server business is 52
percent of our revenues; we sell more
servers than anyone else in the world. We
sell more Web servers than anyone else in
the world. [Sun has] the revenue share. We
have the unit volume. Let the games begin
[smiles].
I respect them, [but] we definitely have more
architectural flexibility. We're also below
them in pricing. But we're in fault-tolerant
systems, too, and there we'll scale the
ProLiant servers up to meet their
performance. This is going to be healthy
competition. I always respect my
competition; that's not to say that I'm not
competitive.
We have a unique relationship with
Microsoft and Windows that allows us to
lead in Windows and to drive the market.
We have the edge of the Web, volume
market [personal computers]. We have
storage. Our service organization alone is
bigger than Sun.
U: Who are your other competitors?
C: In the consumer side, it's
Hewlett-Packard, Compaq and Gateway
(GTW). In the commercial [PC] market, it's
Dell and Compaq. In the enterprise market,
it's Sun and Compaq.
U: Given your size and the number of
markets you compete in, who is your
nearest single-company competitor?
C: IBM. They're the nearest single
competitor. Ultimately, IBM and HP are
becoming more like each other. But for us, a
combination of Sun, EMC and Gateway
would be another alignment of companies
more like us. The war becomes one of
organizations. Sun vs. our enterprise group.
Our storage group against EMC.
U: How are you going to direct Compaq in
market growth? What are your goals?
C: It would be a big mistake for us to target
some dollar figure. We're going to be the
No. 1 [or] No. 2 company in each of our
competitive spaces. In an area where we are
No. 2, our goal is to get our business back.
In the high end, that is going to be tough.
For servers, we lead all others as a volume
play against others. Look at the Internet
infrastructure. There are big machines
underlying smaller machines at the edge of
the Web.
U: What is your international strategy?
C: We're in over 100 countries. We have
over 20 years' experience. The service
component of our business is really tough,
and that aspect of our work is elevated [in
demands] in global markets. IBM does that
very well. I learned a lot from IBM as a
customer. In the wireless markets, there are
between 800 million and 1 billion people
who will use products like ours in Europe.
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Compaq Computer Corp. at a glance:
Founded: 1982
URL: compaq.com
Number of employees: 62,000
Exchange/symbol: NYSE/CPQ
Shares outstanding: 1.7 billion
Market capitalization: $58.9 billion
Jerry Borrell is editor in chief of UPSIDE
magazine.
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