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Technology Stocks : Compaq

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To: Gerald Drews who wrote (25967)5/10/1998 12:21:00 PM
From: rudedog  Read Replies (1) of 97611
 
Gerald -
This was one of MSFT's more foolish moves - they offered a discount to vendors but only on condition that the vendor installed the SW on every box in a given product line. MSFT claimed that this 'simplified accounting' since they only needed to see how many of a given serial number were shipped to know how much MSFT license fee to charge.
CPQ already had the best discount in the business due to the 'front line partnership' agreement - they told MSFT to stuff it, they would ship what they wanted, MSFT huffed and puffed, then said OK.
IMO much of the abuse that MSFT has pushed on the industry has been because the vendors just roll over when MSFT asks for one of these ridiculous arrangements. CPQ has been a leader in telling both MSFT and Intel to take a hike on these kinds of provisions. Dell has been a leader in taking whatever direction the big boys gave. There are no Dell products not based on Intel, there are none that don't pay the MSFT toll.
CPQ will probably go even farther in that direction now that they own a lot of software (between Tandem and Digital they have more than 70% of all clustering patents for example)and also a better processor than anything in the Intel pipeline (Alpha).
Only CPQ or IBM could challenge the dominance of the 'Wintel' monopoly and IBM has been too distracted by their mainframe and AS400 business to mount a credible alternative. CPQ is also the biggest customer of both Intel and MSFT, so those guys can't get too nasty without hurting their business. Should be interesting over the next few years. CPQ is the only 'wintel' company who can be a true partner and not just a customer.
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