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

To: rudedog who wrote (23588)	3/30/1998 12:51:00 AM
From: FR1	Respond to of 97611

>Compaq has a lot of senior execs (Rose, Pesatori, Nist, and a bunch of others) who came from digital and will be harder for the current digital management to fool...< It is also interesting to hear the shorts talk about how this merger is going to be like so many other mergers of two large computer businesses: Burroughs & Sperry AT&T & NCR Honeywell & Groupe Bull Which failed to not work out. What they fail to note is that most of these mergers were between two slow moving dinosaurs. CPQ is not in this category. It is not likely CPQ will sit around and choke to death on a bloated middle management. The fact that CPQ is a major market mover and has management that knows DEC inside gives real meaning to this merger. They know who to cut and will do it. Another argument from the critics is that DEC does not offer CPQ anything significant. We can already see a major use of DEC in the low-price war: CPQ leans on stores to provide repair service. Now I read a lot about how stores are getting nasty about giving service for CPQ machines not bought at their store. The low-price low-margin war game is putting a squeeze on stores because the stores used to justify repairs (reluctantly) with higher priced computers. Now that prices are going nowhere but down, they can't afford it. The solution? - DEC owns one of the largest service organizations available. I can see CPQ keeping customer loyalty by backing up low cost computers with dependable DEC service. This will allow CPQ to go very low and know service is still given - because they own and control it. Incidentally - Michael Dell, in the April issue of "Upside", mentions that DEC's service business for DELL computers has dropped off "precipitously" since the merger announcement.