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

To: Elwood P. Dowd who wrote (28068)	6/24/1998 2:30:00 AM
From: E.H.F.	Respond to of 97611

Don't know if this was posted yet: June 22, 1998, TechWeb News Channel Assembly Twist -- CompuCom Bets Big On Compaq By Robert L. Scheier Dallas-Compaq Computer Corp. wants to work as one with its key resellers to deliver the best, lowest-cost products and services. CompuCom Systems Inc. president and chief executive Ed Anderson has made a multimillion dollar bet Compaq is right. Earlier this month, CompuCom opened a 170,000-square-foot facility at Compaq's headquarters where it will do final configuration and software loads on PCs coming off Compaq assembly lines. Such collocation deals aren't new: Tech Data Corp. has set up shop at both Compaq and IBM Corp., but the distributor simply ships standard PCs coming off the assembly line, rather than the more complex work CompuCom hopes to do. Anderson's investment-"a couple of million bucks" in capital spending alone is a risk, he admits. In the short run, it will save Compaq more money than it saves CompuCom, because the vendor won't have to provide CompuCom with price protection. The payoff, he hopes, will come if he and Compaq can match or beat prices offered by Dell Computer Corp. Anderson can then give customers Compaq computers at Dell prices, along with services such as systems integration. Anderson outlined his plan at PC Expo, hosted by VARBusiness and Computer Reseller News. Anderson says CompuCom needs to double in size to take advantage of the economies of scale in the new, low-inventory model. "I'm thinking and acting like we're a $4 billion company," says Anderson. Incremental improvements don't "narrow the gap enough with Dell," he says. "We need a bold leap and bold leaps have risks." E.H.F. Copyright r 1998 CMP Media Inc.

To: Elwood P. Dowd who wrote (28068)	6/24/1998 2:36:00 AM
From: E.H.F.	Read Replies (1) \| Respond to of 97611

Here's one more...also a day old, but I don't remember seeing it posted here: June 22, 1998, TechWeb News Direct Sales strategies -- Compaq Defines Channel Moves By Robert L. Scheier New York-Compaq Computer Corp. had good news and bad news for resellers last week as it finalized its $8.4 billion acquisition of Digital Equipment Corp., Maynard, Mass. The good news is that Compaq resellers will be able to resell high-end Digital technologies such as the Alpha chip and Digital Unix, both of which Compaq hopes to turn into mainstream 64-bit standards, which could compete with Intel's Pentium processors and Microsoft's Windows NT. Digital resellers will work with a vendor who values the channel more than Digital, which sold 45 percent of its products direct. Both channels will be able to resell services provided by the new combined company and, in some cases, get pulled in for subcontracts at big accounts that would have been inaccessible before. The bad news is that Compaq will sell direct if the customer demands it, and even, at times, when the customer does not, guaranteeing that, in some cases, "we will have conflict," says Pearse Flynn, Compaq's newly appointed worldwide vice president of channel development. For example, Compaq is designating roughly 300 customers as "named" accounts to whom it intends to sell services direct, giving the largest enterprise or global customers the assurance that a $38 billion Compaq-not a reseller-stands behind mission-critical applications, such as mail and messaging, or enterprise-resource planning (ERP) software, such as SAP R/3. Compaq is also expanding its DirectPlus program, which allows SMB customers to buy through a toll-free number. When a reseller who serves a corporate account leads with, say, IBM or HP products instead of Compaq, the Houston-based vendor won't hesitate to counterbid with itself or with another reseller. Compaq has already deposed the "incumbent" reseller for a $75 million to $100 million contract with a major account, says vice president of North American sales Mike Pocock. In most cases, though, Compaq will still move products to customers through resellers and subcontract service work to them. If Compaq reaches its goal of becoming a $15 billion IT services provider by 2002, Flynn estimates that will generate $5 billion in additional services work for the channel. To get a crack at the best accounts, however, both Compaq and Digital resellers will need to meet stringent new training and skills requirements. Compaq executives have spent months working with channel executives to develop extensive "rules of engagement" (see chart) to minimize channel conflict. While not every channel partner will like every rule, "There is a clear strategy" to which both sides can refer, says Doug Antone, senior vice president of Ingram Micro Inc., a Santa Ana, Calif., distributor. Working with Compaq will be no different than working with IBM Corp., Hewlett-Packard Co. or the former Digital, says William Tauscher, chief executive of systems integrator Vanstar Corp., because he has long resold products from those vendors while competing with them for service business. --- COMPAQ'S RULES OF ENGAGEMENT Customer And Service Level - 300+ "named" accounts implementing mission-critical or mission-sensitive applications such as SAP. - Same 300 "named" accounts requiring less complex warranty or systems integration work. - Small and midsize businesses needing warranty or systems integration work. - Medium to large customers served by "incumbent" reseller. Who Does The Work - Compaq sells direct and is prime contact with customer; does most service itself. - Compaq sells services direct but subcontracts work to channel partners who meet standards. - Compaq takes first call from customer, refers them to local channel partner. - Compaq works with incumbent on best mix of direct, indirect sales. NOTE: This is a sample, not a definitive list, of the rules of engagement. Source: Compaq Computer Corp. Copyright r 1998 CMP Media Inc. E.H.F.