Tandem had to move from a mainframe expense and price model to
a near-commodity price model (among other things), which caused
upheavel. In doing so, the price basis and margins collapsed.
At the same time, they invested heavily in R&D with the
Servernet SAN, which had to be integrated into existing
product lines and is just beginning to roll out. It is
also available for license, and had been licensed by CPQ
for clustering long before the merger, as well as others
(Nec, for instance). They also had to revamp the sales model
from top to bottom and allocate serious resources in NT
development.
I don't have the numbers in front of me, but, for instance,
MG&A has been reduced drastically in the last 3-4 years,
as well as many other expenses (plants, for instance).
No, the products were well received; unit sales set quarter
over quarter records virtually every quarter, often by
large percentages (again I don't have the figures in front
of me), and revenues also set records nearly
every quarter (you have to allow for discontinued operations
to see that in the history), though not as drastically.
Margins collapsed in
revamping to a much lower-priced model. Most of this
was behind by the first of this year, and margins were
expanding rapidly. CPQ didn't buy (technically, merge with)
a basket case. Tandem's revenues AND earnings will contribute
significantly to the CPQ top and bottom lines immediately, as
has already been publicized in the CFO's statements, etc.
Many public statements have been issued about the complementary
nature of CPQ and Tandem offerings and capabilities to which
I have nothing to add. |
