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Technology Stocks : The New QLogic (ANCR) -- Ignore unavailable to you. Want to Upgrade?

To: KJ. Moy who wrote (24993)	11/30/1999 8:17:00 PM
From: trendmastr	Read Replies (1) \| Respond to of 29386

Palo Alto, California, Nov. 30 (Bloomberg) -- Hewlett- Packard Co., the world's No. 2 computer maker, said top online retailer Amazon.com Inc. bought Hewlett computers for the first time, choosing them over machines from Sun Microsystems Inc. Amazon.com said it installed Hewlett's V-Class servers to handle the expected holiday surge in shoppers on its Web site. It will buy a total of 20 of the machines, which cost about a million dollars each before discounts. As part of the agreement, Amazon.com will offer more of Hewlett's printers, scanners, digital cameras and other consumer products on its site. Winning Amazon.com's business is a coup for Hewlett, whose growth in server sales has been trailing that of rival Sun Micro. Sun's sales of the powerful machines that run computer networks have been rising faster because many of its clients are ``dot-com' companies that are adding lots of servers. ``This could be a major account for H-P going forward,' said Phil Rueppel, a Deutsche Banc Alex Brown analyst who rates Hewlett a ``buy.' Sun salespeople suspect that Hewlett cut prices drastically to win the sale to Amazon.com, said Doug van Aman, a Sun spokesman. ``The systems were essentially free from H-P,' van Aman said. ``That's not a sustainable business model.' Hewlett executives said they didn't slash prices just to win a fast-growing Internet customer. ``We didn't give away the store,' said Ann Livermore, president of Hewlett's enterprise and commercial business. Catching Up Hewlett Chief Executive Carly Fiorina, who joined the company in July, is trying to catch up with Sun with a new ``e-services' strategy. Palo Alto, California-based Hewlett is giving servers to young Internet companies in exchange for a percentage of their sales or an equity stake, or both. Earlier this month, Fiorina said she was calling on employees to boost sales and earnings 12 percent to 15 percent in the fiscal year that began Nov. 1. She made the statement on a call with analysts where she discussed earnings for the fourth quarter ended Oct. 31. Hewlett today said server sales in North America, which had been weak, are starting to improve, thanks to new products and more aggressive marketing. ``Things are already starting to look up for us in North America,' Livermore said. Hewlett has moved 250 ``non-productive' salespeople off of the North American server team, Livermore said. She declined to say whether they'd been fired. Fiorina said in October that she would weed out salespeople who weren't meeting performance guidelines. Big Customers Seattle-based Amazon.com, which has about 13 million customers, already sells some models of Hewlett printers, scanners, digital cameras, calculators and other products. The retailer said it received 2.5 times as many orders this Thanksgiving weekend as it did a year earlier. ``We've had a relationship with H-P in the past,' said Richard Chin, Amazon.com's group product manager for consumer electronics. ``This is a major shift toward a closer partnership with them and a commitment to using a much deeper set of their technology.' Amazon.com now will receive Hewlett's consumer merchandise directly, instead of via distributor. That means that ``as new H-P products come out, they will be very rapidly available on our Web site,' Chin said. In addition to Amazon.com, Hewlett said Wal-Mart Stores Inc., UAL Corp.'s United Airlines, Cisco Systems Inc. and Home Depot Inc. all have bought new equipment from Hewlett recently. The company said America Online Inc., the No. 1 online service, continues to buy its computers, even though it signed an agreement to buy $500 million worth of products from Sun Microsystems. No Hewlett systems have been displaced by Sun, Livermore said. Hewlett Chief Financial Officer Bob Wayman said the company will cut costs by $1 billion over the next three years. Much of that savings will be reinvested in new initiatives.