Thread: COMPAQ and NETWORKING and possible ACQUISITIONS. This lifted from the Cabletron thread:
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From: Gino Constantini Tuesday, Jun 30 1998 11:30AM ET
Reply # of 4241
Compaq networking feels a Digital influence
By Scott Berinato, PC Week Online
June 26, 1998 9:19 AM PT
Compaq Computer Corp.'s efforts to penetrate the networking market took a sudden turn earlier this month when Alan Lutz, head of the Houston company's Communication Products Group, left to become president and CIO of Newbridge Networks Inc.
Taking Lutz's place is Digital Equipment Corp. veteran William "B.J." Johnson. One of Johnson's first moves as vice president, after Compaq's merger with Digital was finalized earlier this month, was to change the name of CPG to the Network and Access Communications Division, which now falls under Compaq's Enterprise Systems and Solutions Group. The enterprise group is steered by John Rose, senior vice president, another Digital alumnus.
Johnson spoke this week with PC Week Online about the changes and about progress toward CEO Eckhard Pfeiffer's goal of placing Compaq among the top three networking vendors.
PC Week Online: Give me a lay of the land in terms of Compaq's networking plans.
Johnson: Essentially, there were three acquisitions. The most recent was Microcom Inc., which is handling all of our access activity in Norwood, [Mass.]. Then there is the Thomas-Conrad acquisition, in Austin, [Texas], where much of the NIC work is going on. Then there is the Networth group, which was doing hubs. They are moving to Austin and will do low-end switching. We also have a group in Houston doing modems, switches and some of the Universal ADSL work.
There is also a group in Littleton, [Mass.], which is part of the old Digital. They will be associated with overall networking systems and solutions that Compaq offers. They will also provide an interface to Cabletron [Systems Inc.].
Our strategies over this transition have stayed pretty much the same, with the exception that we'll be embracing the Digital networking customer base and looking to augment their products with ours.
PC Week Online: What is the relationship between Compaq and Cabletron?
Johnson: When Digital sold its networking business to Cabletron, we agreed to buy products back over a three-and-a-half-year period. Compaq will fulfill that. We've tried to look where Cabletron products and Digital-branded products fit overall, and now we have a product road map that includes Compaq-, Cabletron- and Digital-branded products. Specifically, we'll target installed Digital accounts with the Digital and Cabletron products.
PC Week Online: Would Compaq buy Cabletron? Are any other networking acquisitions in the works?
Johnson: Obviously, acquisitions are something we look at. But in my view, it will be two to three quarters before we look at any kind of acquisition like that. I'm always looking, but I wouldn't say anything like [an acquisition of Cabletron] would occur.
PC Week Online: Will Digital services play a role in networking for Compaq?
Johnson: Absolutely. There's a group within the services organization called NSIS, or Network Solutions Integration Services. They will go to a customer and do network design, installation, configuration and even outsourcing of the network. That's a real advantage for us overall.
PC Week Online: Will you remain focused on the enterprise for access or will you target carriers and Internet service providers as well?
Johnson: We're already selling remote access into ISPs-not the really big ones but the smaller ones, and they like our story. With NT-based systems, they can build applications right into the box instead of adding another box to the network.
We're trying to get the message out on NT-based communications. Users can build on NT servers and low-end switches. Our experience with NT servers will help us in networking.
PC Week Online: There have been rumors that Eckhard Pfeiffer has given the networking group a set time frame in which he wants it to become profitable. How long has he given you?
Johnson: I've heard of no time frame. He wants us to be profitable and to be the No. 3 networking company in the industry, which means we have to grow pretty quickly. But the whole issue is to meet your plan. My basic model is one of revenue, market share and profitability. Anyone can grow if you don't have to make money. But there's no kind of gun to our head.
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