Compaq must tap business sales, services for profits
By: Joe Wilcox, CNET News.com
12/13/00 7:34:00 AM
Source: News.com
Compaq Computer's best chance of weathering the high-tech equivalent of the "Perfect Storm" may be its high-end computer and services business, said analysts.
Full story: cnetinvestor.com
Excerpts:
With the Digital buy, Compaq increased focus on high-margin servers, storage devices and services, meaning that it will weather the PC slowdown storm better than rivals, particularly Dell Computer, say analysts.
"Compaq is much better positioned to weather a downturn than, say, a Dell," said Rothdeutsch. "They have transitioned the company over the last couple of years for the enterprise and higher-end system sales. Compaq will be one of the first companies to emerge once PC demand does get better."
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"In retrospect, it's probably a damn good thing Compaq bought Digital," said Terry Shannon, editor of the Shannon Knows Compaq newsletter. "At least they have a high-end story they can tell, and the story's getting better." The best Dell can do are eight Intel-processor servers, "while Compaq can offer much more," he said.
Capellas has effectively harnessed some of Digital's best assets, helping to grow Compaq beyond its core PC business. But "Capellas has been, until now, in fix-it mode," said Lesperance, who added the real challenge facing Capellas "is growing Compaq." |
