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

To: Mike Gordon who wrote (23426)	3/26/1998 8:43:00 AM
From: rudedog	Read Replies (1) \| Respond to of 97611

very good question on alpha. If you believe DEC's Jesse Lipcon (quoted in the press over 'titanic' and elsewhere) alpha will be 'better' than merced (faster, cheaper, better for large systems) for at least the first few years of merced production. But clearly superior performance has not pushed alpha out of its narrow niche even though it has been way ahead of the pack for 5 years in terms of performance. Digital did not have either the volume or stroke in the industry to make alpha a paying proposition but CPQ probably does. IMO alpha needs to have a broader base of support than even CPQ if it is to take off. We see HP moving away from the PA-RISC chips (to merced, which they co-developed with Intel) due to the cost of staying in the chip design, and Sun has made some noises about moving from SPARC to merced. Both Sun and HP use a 'fabless' strategy, they own the design and IP around the chip but don't actually produce the silicon. DEC will move to that same model with Alpha when they sell their fab to Intel, which should actually help with Alpha break even since they move to a model which has been relatively successful for HP and Sun in terms of keeping costs low. The trick for CPQ with Alpha is to manage their Intel relationship if they push Alpha. DEC did not do this too well and were not exactly Intel's best buddies. CPQ has had their share of difficulties with Intel over the years, EP got into a pretty public battle with Intel in 1993. CPQ has been the most independent of the 'wintel' vendors and has funded competing designs from AMD and Cyrex in the past. I have not been able to determine what CPQ really plans to do on this, people I have talked to at both CPQ and DEC are as much in the dark as I am. But this would be the kind of high risk / high reward strategy that CPQ likes, and MSFT has been a strong backer of Alpha. IMO alpha production will have to continue for at least the next several years to support the VAX business, which is more than $3B if you believe IDC, and is totally dependent on Alpha. CPQ has publicly stated that they will support Alpha. I suspect that the Alpha positioning will be defined pretty clearly when CPQ lays out their integration plans for DEC, since it has such big swing potential for a lot of CPQ's key relationships.

To: Mike Gordon who wrote (23426)	3/26/1998 6:19:00 PM
From: John Koligman	Read Replies (1) \| Respond to of 97611

Mike, It looks to have the performance, but I don't know what kinds of volumes this chip can be made in. I suspect it may end up being a place holder for CPQ until Merced really ramps up, and gives CPQ a leg up until it does. Once Merced ramps, I think things get murky for Alpha. Guys on the DEC thread can comment in much greater detail. The fact that Intel is one of the main fabricators for Alpha also tends to lessen CPQ's 'squeeze factor' in regard to this chip. However, I think Samsung has signed up to enhance it in the future, again, don't know what they are capable of volumewise. This chip has been a performance leader for a long time, but DEC has never been able to get it off the ground from a marketing perspective. I was not even aware that you can buy a PC with Alpha until one of the DEC guys pointed it out to me. I do think it gives CPQ an edge until Merced. John