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To: MichaelW who wrote (47644)	6/15/1998 11:35:00 AM
From: jim kelley	Read Replies (2) \| Respond to of 176387

MichaelW, I do not see the purchase as a positive for CPQ. They are paying 9.5 B for a company that was basically no growth and marginal earnings. To this cost they need to add the cost of the layoffs and restructuring. I think this comes to another 5.5- 7.0 B dollars. As a result they end up supporting legacy systems based on VMS, UNIX. In addition, they undermine the credibility of their third party support capability. For example, DELL has pulled its support contracts from DEC as a consequence of the CPQ purchase. How many other companies will do the same? THe ALPHA is a questionable asset in that this architecture has long been rejected as not mainstream. The ALPHA is a very fast 64 bit processor with relatively slow I/O. I have worked with them and it was not impressive. The merger also detracts from the BTO/JIT manufacturing effort that CPQ has had so much trouble implementing. The merger reduce CPQ's cash on hand by at least 7 B dollars. This has got to make Earl nervous. Jim Kelley