businessweek.com./premium/06/b3564003.htm
The Might of Compaq and Digital...
Armed with Digital Equipment's products--not to mention its vaunted service and
support staff--Compaq will bring its own low-cost, take-no-prisoners PC economics
into high-end corporate markets that have long been dominated by Hewlett-Packard
and IBM
REVENUES
$37.5 billion
NET INCOME
$1.9 billion
R&D
$1.8 billion
EMPLOYEES
78,000*
SERVICE EMPLOYEES
28,000
REVENUE PER EMPLOYEE
$480,769*
*BUSINESS WEEK estimate
businessweek.com./premium/06/b3564004.htm
...Will Boost Some...
INTEL:
REVENUES
$25.1 billion
EMPLOYEES
64,000
Intel will be able to move further into corporate computing. Today, its chips are used
in 22% of servers costing $50,000 to $100,000. That's projected to grow to 44% by
2000, according to International Data Corp. Its share of the $250,000 to $500,000
server market is expected to quadruple, to 20%, over the same period.
SAP:
REVENUES
$3.4 billion
EMPLOYEES
12,860
The German company sells corporate software to handle such tasks as accounting and
inventory management. With Compaq charging into the corporate market, SAP will
have a champion to grow its NT business, which accounted for some 45% of its sales
in 1997.
MICROSOFT:
REVENUES
$13.1 billion
EMPLOYEES
22,276
A Compaq/Digital combination will help accelerate Microsoft's push into the heart of
corporate computing with its Windows NT and related programs, such as Back Office
and the SQL Server database. NT captured 40% of the server market in 1997, up from
24% the year before-thanks to an 80% increase in unit sales. Both companies are
close Microsoft partners.
businessweek.com./premium/06/b3564005.htm
..And Threaten Others
IBM:
REVENUES
$78.5 billion
REVENUE PER EMPLOYEE
$327,083
IBM must slash costs, particularly in PCs. Its overhead is 27% of revenues compared
with 15% at Compaq. A stronger Compaq will push upstream into the core of IBM's
corporate business. IBM also will face more competition in its $19 billion services
business.
SUN MICROSYSTEMS:
REVENUES
$9.2 billion
REVENUE PER EMPLOYEE
$373,900
Sun's revenue will be less than a quarter the sales of a Compaq/Digital combo. And
with Compaq giving Windows NT a huge boost, Sun will have to convince customers
its Unix-only machines remain performance leaders. Meanwhile, Sun must boost its
service skills.
HEWLETT-PACKARD*:
REVENUES
$42.9 billion
REVENUE PER EMPLOYEE
$346,620
Until now, HP was IBM's only real rival for corporate customers. Now it will face a
leaner competitor with most of the same skills. What's more, Compaq may emerge as a
more powerful Microsoft ally. Compared with HP, Compaq will have a much larger
staff of 1,600 certified NT engineers.
GATEWAY 2000:
REVENUES
$6.3 billion
REVENUE PER EMPLOYEE
$484,615
Gateway is struggling to attract corporate buyers to offset razor-thin margins in the
consumer-PC market. But a combined Compaq/Digital will make that a tougher
market to penetrate. Gateway lacks corporate relationships, and its 40-person field
sales force is a fraction of Compaq/Digital's 1,000-plus field sales team.
EDS:
REVENUES
$15 billion (est.)
REVENUE PER EMPLOYEE
$150,000
The largest independent computer service provider has made its fortune offering
high-tech knowhow, primarily to corporations. Compaq will have a broad array of
services along with a full suite of products to offer corporate clients. Companies may
find it easier to fulfill all their computing needs in one place.
DELL COMPUTER**:
REVENUES
$11 billion
REVENUE PER EMPLOYEE
$738,389
Dell still has a stronghold in the corporate market and lower overhead--11.6% of
sales, compared with Compaq's 15%. But corporate customers could be tempted to use
a supplier with a broader range of products and consulting services.
All revenues are for 1997 except where noted.
*For year ended Oct. 31
**For year ended Nov. 2 |
