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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: Ibexx who wrote (15811)	1/31/1998 9:54:00 PM
From: Loki	Read Replies (1) \| Respond to of 97611

Ibexx...Good points. Relative quick time frame is important to establish and grow overseas business, to take advantage of opportunities. DEC does have brand name internationally beyond CPQ. (Foot in door) European businesses are extremely weak in using available computer technology. Upgrades are needed (EEU) - Olivetti? No! Italian reliable support? Although O. has been profitable last couple years. CPQ - DEC can have advantage. Americans are the best marketers and recognized for computer technology. Very welcome in Europe at this very ripe time. (BTO - Europe?) Will USD exchange rate be disadvantage? USD = 1.82 DM Asia is somewhat in slow down from buying US computer products. In general they are more advanced in computer technology than Europe. (I was in our Chengdu office in 1995 when they where networking their computers to the Kunming and HK offices). If US politicians use IMF bailouts, and support, to gain access to the very restrictive markets in Japan and South Korea, US businesses will have a wonderful market in which to sell two years from now. (Forget Indonesia - IMF money down the drain). If American politicians do not continue to shoot American business in the foot, internationally, E. Pfeiffer has certainly positioned CPQ into a global corporation that can take advantage of the globally technology starved markets. The approach last week appears to be (excuse me for using a military reference) a well orchestrated "Blitz" into the market and against competitors. One can hardly believe that the below were coincidences, within the same week. 1. DEC merger (takeover) (It could now be viewed as a panic move if DELL were to try the same immediately. 2. Radio Shack (exclusive CPQ) 3. Canon distribution (It is imerative to have a Japanese partner to penetrate the sub distribution chains, common in Japan) Although CPQ stock may have reached its "law of deminishing returns" I believe it to be more solid now. Obviously a sign of a management team that has proactively adapted to the changing market as opposed to a management that blames a market after dissappointing news. If we apply a P/E ratio of 20 - 25 by end of 1998 we should have stock price $32 - $40. I will take $40/share versus volatilty in 1998. Any thoughts.

To: Ibexx who wrote (15811)	2/1/1998 12:54:00 AM
From: hpeace	Read Replies (1) \| Respond to of 97611

actully from pfief's own words .they wnated dec's service and support 20,000 people first.. the intel chip discounts and the high end enterprise computing is great but pfief pareto-ed the service and support as first. you make 50% margin on that stuff, plus it's needed to land and keep large accts. i have the articles if you want them. service and support org. is the one peice compaq didn't have to be a player of the future

To: Ibexx who wrote (15811)	2/1/1998 11:45:00 PM
From: Harry Landsiedel	Respond to of 97611

Ibexx. Re: CPQ/DEC merger. I think CPQ wanted a couple of other things. 1) They saw HP's growth and that HP was getting PC business 'cause of their "one-stop" shop positioning. Pfeiffer realized that he was caught between HP and Dell and could not achieve his growth plans without a strategy to handle both. BTO took care of Dell and DEC took care of HP. This leveled the playing field again. 2) As Pfeiffer said, he wanted DEC's worldwide customer base. Then he could grow into the higher profit enterprise business. He did it now because he wanted to hit the ground running BEFORE Merced hits. Also, he believes he can grow the service business. IBM's service arm has grown by double digit rates in this decade to a $19 billion business. Re: Pfeiffer's shots at Digital. I think this was done on purpose. I don't disagree that it could have been done better in private, but I think Pfeiffer is in a hurry. He doesn't want anybody to think that the DEC ways can be sustained. Finally, I think Pfeiffer and his team have been working on this for two years. Mason and a couple others are DEC people. They KNOW who the keepers are and what has to be changed. I bet they've have looked at lots of scenarios and financial models and KNOW what MUST happen. This has been well planned IMHO. Now it has to be executed. HL