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

To: Elwood P. Dowd who wrote (27612)	6/12/1998 12:25:00 PM
From: robbie	Respond to of 97611

El....I agree that it will happen, but think early 1999 might be a little too soon. I do see it happening in the next 18-24 months though. Was I seeing things when GTW announced they were comfortable with estimates of 44c this quarter? The stock is 50 and called overvalued by many. Dell made ~44c and everybody was screaming for 100. Don't want to start a fight with them because I am long a few hundred shares, but I did buy puts in the 90s and sold June 85 calls yesterday. Looking for CPQ and Dell to bust through 100 at about the same time. Robbie

To: Elwood P. Dowd who wrote (27612)	6/12/1998 12:25:00 PM
From: William Hunt	Read Replies (1) \| Respond to of 97611

ELWOOD ---THIS is basically the same direction that CSCO went two years ago ---one stop shopping for a company for their network needs ---I have to say it has been a big success for CSCO ---Hopefully CPQ will follow the same path Digital hits Compaq recycle bin By Randy Weston Staff Writer, CNET NEWS.COM June 12, 1998, 8:50 a.m. PT special coverage NEW YORK--Compaq Computer will use Digital Equipment to make 64-bit computing an industry standard and push further into the services industry, company executives said here this morning. ÿ ÿLIVE stock quote ÿ ÿ Delayed 20 minutes ÿ ÿ Compaq Computer Corp. ÿ ÿ CPQ 28.1875 +0.45% ÿ ÿ Digital Equipment Corporation ÿ ÿ DEC 56.6875 -0.55% ÿ ÿ For more details, go to NEWS.COM Investor. ÿ On the day after completing its purchase of Digital Equipment, Compaq CEO Eckhard Pfeiffer laid out here today the details of his company's plans for the once-beleaguered Digital. "I've met with a lot of Digital customers the past few months and I have made a commitment that Compaq will continue to support the Alpha server," Pfeiffer said. Houston-based Compaq, in January, made its bid for the Maynard, Massachusetts-based enterprise computing and services giant. The almost $9 billion deal cleared its final hurdle yesterday with more than two-thirds of Digital stockholders' approval. Compaq, the nation's largest PC manufacturer, said it was grabbing Digital so that it could compete more effectively for the corporate server market and the lucrative services business. Although considered one of the leaders in Unix computing systems and processor technology, Digital had been in a sales and earnings slump during the past few years, especially relative to its competitors. Compaq will pay about $4.5 billion in cash and issue 141 million shares of stock to cover the transaction. Digital shareholders will receive $30 in cash and 0.945 shares of Compaq stock for each share of Digital stock. At the press conference on Wall Street here today, Pfeiffer said Digital's Alpha servers will be a pivotal piece of Compaq's strategy to gain market leadership in the 64-bit computing environment. Currently, 64-bit computing is relegated to the Unix world but it is also the platform Microsoft is using to develop a 64-bit version of its operating system Windows NT. Compaq is hoping to sell the Alpha servers to companies running "power hungry" applications such as data warehousing, technical computing, and the burgeoning Internet commerce market. Compaq is also putting Digital's extensive services network to greater use, not only supporting Alpha servers, but also taking on the lucrative packaged applications implementation and support market. Pfeiffer said the plan is for Compaq to become a leading services company for the packaged application industry, implementing and supporting much of the infrastructure and operations management surrounding such large business process automation systems as SAP, Oracle, PeopleSoft, and Baan. "This is an area where we have the opportunity to change the landscape,'' Pfeiffer said. "We can lead in the planning, designing, and deploying of enterprise [systems] through our global services and support. Customers want a single source of accountability. They will get it with Compaq global services and extensive partnerships." Compaq is launching in the next few months an online advisory site for packaged applications. Called ActiveAnswers, it's to be an online library of tools and methods for implementing packaged applications. "The importance of service is represented that by year 2002, $1 out of every $10 spent on information technology will be spent on services," said John Rando, vice president of Compaq's services. "We want to grow to be a $15 billion, Tier 1 service provider by 2002. There is huge potential for growth in the market." Rando said the services division will concentrate on three areas: network and system integration, operations management, and support services. Compaq is also shuffling its upper management to align its internal operations around the new businesses it is gaining with the Digital purchase. Not included in the lineup will be Digital CEO Robert Palmer who is retiring once the merger is completed. BEST WISHES BILL