Compaq Strengthens Position In Server Segment
May. 21, 1999 (Computer Reseller News - CMP via COMTEX) -- New York - Despite its well-publicized trials
and tribulations, which included ousting its chief executive and reworking its channel structure, Compaq
Computer Corp. remains a powerful force in the small- and midsize-company hardware market.
The percentage of smaller VARs citing Compaq desktops, notebooks and servers as their best-selling units
rebounded strongly last month, according to the April CRN reseller hardware poll.
Over the first four months of 1999, the data shows Houston-based Compaq strengthened its position in the
small- and midsize-company server market, compared with the same period in 1998. Trends in the desktop
and notebook markets were less favorable, but the vendor still ranks at or near the top in each of the
categories.
In April, for example, 31 percent of smaller resellers said Compaq servers were their overall best sellers. This
was up from 26 percent in March and was one of the highest percentages recorded for the vendor since CRN
started surveying this category in June 1996.
Moreover, the percentage of resellers citing Compaq was higher than the percentage citing white-box
servers. This is the first time a branded system has beat out white boxes in this segment of the server
market.
"Compaq really enjoys strong success at the high end [of the market]," said Lawrence Holzenthaler, vice
president of Total Tec Systems Inc., an Edison, N.J.-based distributor and integrator of Compaq products.
"That market looks like it's starting to pick up," he said.
Data for April shows 31 percent of resellers said Compaq servers were their best sellers, up from 17 percent
one year ago. The data indicates this gain has come at the expense of white boxes, as well as vendors
such as Hewlett-Packard Co., Palo Alto, Calif.
Looking at the small- and midsize-company desktop market, 18 percent of resellers said Compaq units were
their overall best sellers in April, up from 15 percent in March and 11 percent in February.
But the percentage of resellers citing Compaq desktops as best-selling barely budged over the first four
months of 1999, compared with the same period in 1998, evidence of the stiff competition Compaq continues
to face from white boxes and vendors such as Dell Computer Co., Round Rock, Texas.
"We're not using Compaq anymore because we moved to Dell," said Karl Van Nestle, software systems
architect for The College Board, a Reston, Va.-based organization which develops online test-preparation
programs. "It is just more simple to do business with Dell, and we've had a lot more success with them," he
said.
The small- and midsize-company notebook market also presents mixed results for Compaq. In April, 19
percent of resellers said Compaq notebooks were their overall best sellers. This figure was the highest
percentage recorded by CRN since October and good enough for second place on the best-selling list,
ahead of IBM Personal Systems Group, Somers, N.Y., and behind Toshiba America Information Systems
Inc., Irvine, Calif.
Over the first four months of this year, however, an average of 14.2 percent of resellers cited Compaq
notebooks as their best sellers, down from 15.7 percent in the same period last year.
Last month, CRN began surveying VARs that build their own desktops more closely on the price differences
between these units and branded systems.
A majority of resellers that build their own desktops said they sell these systems at a lower price than
branded units. In most cases, the price differential ranged between 10 percent and 19 percent less, but
nearly one in 10 of these resellers said the delta was at least 20 percent.
Still, another 23 percent of respondents said they actually sell their white-box units at a higher price than
branded systems.
"It really depends on the place selling the white box," said Mark Antonucci, a hardware design engineer at
Image Technology Corp., a Boston-based VAR. "If the company is trusted and the customer is going to get
more features out of the unbranded system, they are not going to be reluctant to choose one over a branded
unit," he said.
David Jastrow contributed to this story.
New York - Certification and application development are key to Linux gaining general acceptance in the corporate market,
according to resellers responding to the April CRN/Ruzinsky Research reseller software poll.
In light of the intense interest Linux is generating, CRN has expanded its survey coverage of the technology in the monthly reseller
software poll. The April survey presents the first set of new results.
Forty percent of respondents to last month's survey said certification was "very important" to Linux's rise in the enterprise workspace, as
well as in the small- and midsize-company markets. Another 44 percent said certification was "somewhat" important. Only 16 percent
believed certification was either "not very important" or "not at all important."
Channel players have been lamenting the lack of progress in developing Linux certification training programs for some time. One
VAR said until the process is hashed out, he does not see enterprise companies taking a chance on Linux (CRN, March 8).
There is some hope among resellers that Linux will do what no Unix platform has managed: offer a single, compatible version of the
operating system. In the past, several manufacturers all worked on their own Unix system, none of which was compatible.
"The Unix guys could never get it together," said Julia Grant, principle of Autodraft Inc., a Rochester, N.Y.-based VAR.
Despite resellers' overwhelming belief that certification is a key to Linux's growth in the corporate marketplace, only 15 percent of
respondents said they planned to become Linux-certified within the next six months. Another 32 percent said they were not sure,
while 53 percent said they would not become certified during this period.
In all, 145 resellers responded to the April survey.
Resellers also make it clear that database and office productivity applications are two areas crucial to keeping Linux on its meteoric
growth path.
To become mainstream, Linux must "get to a state where you don't have to stare at a command prompt so much," said Jon Walsh,
programmer at Comspace.com, a Houston VAR.
CRN asked resellers which applications are most important to Linux gaining acceptance in corporations. Some 73 percent of
respondents cited databases, while 65 percent said office productivity applications (multiple responses are possible).
One-third of respondents said Web applications were crucial to Linux acceptance. Antivirus software and groupware were cited by 17
percent and 12 percent, respectively.
In light of these results, it is not surprising resellers are hedging bets on whether Linux will become a viable alternative to Windows
within the next 12 months.
Forty-four percent of respondents said that in the small/midsize company market, Linux would become a viable Windows alternative
within that period. Another 36 percent said it would not. The remaining 20 percent were unsure.
The wind blows the other way in the enterprise market. Thirty-one percent of respondents said that Linux would be a viable
alternative to Windows within the next 12 months, but 43 percent said it would not. The other 26 percent were unsure.
Compared with the results of a CRN reseller spot survey last December, resellers have become less optimistic about the time frame for
Linux mounting a credible challenge to Windows. Slow progress in the areas of certifications and applications development are no
doubt two big reasons for this result, and show Linux-backers need to feel a greater sense of urgency in addressing these concerns,
analysts said.
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