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To: Don Martini who wrote (82678)	11/28/1998 10:17:00 PM
From: TechMkt	Read Replies (1) \| Respond to of 176387

WINDOWS MAGAZINE December 01, 1998, Issue: 912 Section: Windows News -------------------------------------------------------------------- Operating Systems -- PC Vendors Jump On NT5 Bandwagon Jim Forbes For computer hardware vendors, Windows NT 5.0 is like Christmas to a small child-it just can't get here fast enough. After all, in a marketplace sorely lacking a killer app to inspire users to upgrade to more powerful 450MHz systems, Microsoft's newest OS is viewed as a hot ticket that could stir up sales, particularly at the high end of the spectrum where fatter profit margins reside. That's why some PC vendors aren't waiting for Santa to come to them this time: A few are getting a jump on NT5 before it even hits the market by building systems and implementing programs that support the OS while it's still in beta form. One of the most aggressive on this front has been Micron Electronics. In September, the company implemented a program called AdvanceDeploy, which gave customers the opportunity to purchase its Millennia and ClientPro desktops or Trek II and GoBook II notebooks already configured with Beta 2 of NT5. The program also included extensive technical support for Beta 2 users. Micron officials said that demand for AdvanceDeploy systems has exceeded the company's expectations. Compaq has also gotten in on the action by setting up a dedicated support site on the Web for users of its DeskPro EN and EP series of desktop computers running NT5 Beta 2 (unlike Micron it does not sell systems already equipped with the beta). The site contains frequently asked questions on how to set up and maintain the new operating system in the corporate enterprise, as well as the necessary drivers, utilities, ROM BIOS upgrades and supporting text files. Number-one PC maker Dell Computer is also considering climbing aboard the NT5 predeployment bandwagon. According to Michael Stich, software product manager for Dell's Optiplex line of desktop computers, the company is thinking about selling and supporting systems that could be purchased with an NT5 beta already installed. However, he notes that the company would wait until Microsoft releases Beta 3 of the operating system (expected in early 1999, according to Microsoft sources) before making such a move. Why the sudden compulsion to get in early with NT5? "We think it's important for a [PC maker] to participate in these [predeployment] programs. Unless you do this, you run the risk of not understanding what customers will do with (your hardware)," argued Dell's Stich. Micron officials have made similar assertions, saying that its AdvanceDeploy program was created to help customers better integrate NT5 when the final release of the OS arrives sometime next year.

To: Don Martini who wrote (82678)	11/28/1998 10:22:00 PM
From: TechMkt	Read Replies (1) \| Respond to of 176387

All's not well with CPQ's DirectPlus!!! Fez ___________________________ November 30, 1998, Issue: 819 Section: Channels ----------------------------------------------------------- Reading The Tea Leaves From Compaq's Shift In Models Marty Wolf Houston, we have a problem. Compaq recently announced that it is going to emphasize direct selling-the focus for now being small and midsize businesses-and that it is creating a whole new line, the ProSignia, to compete with the Dell Dimension line. If they had not protested so much about their channel cooperative and inclusive plans, I might not feel this way. It was not that long ago that Compaq Chief Executive Eckhard Pfeiffer had all the channel senior executives in Houston for a meeting immediately after the Digital acquisition and allayed their growing concerns. That was then. I do think VARs, large and small, can and should plan their investments and strategies around this announcement from Houston and the ones to follow. Many will use this to change their models and enhance profitability. Others will get hammered and see their product margins decline further. However, since it doesn't do any good to second-guess them, and since they did not solicit my input, the issue at hand is: What does it mean? First, some of the largest accounts that already have been moved to direct purchasing have complained, and some have even given an indication of their desire for the old way. If it is not seamless for large customers on orders and rollouts, what makes anyone think the onesy-twosy market will be any easier? I'm a onesy-twosy customer myself, but just because we don't order by the pound doesn't mean we have low expectations. As you know, there is no shortage of options to purchase technology. Expect to lower your Compaq, then PC, margin and have more unhappy customers. Second, the largest integrators, such as EDS, CompuCom and GE, will not be the most affected. Their business models already have been impacted and are in various stages of transformation. The big losers are the people who have been throwing 7's and 11's for years-the national distributors. The top four sell approximately $4 billion of Compaq product-much of it into this newly contested market space. Expect them to put up a good fight, but lose a lot of that volume as superior price and availability trump good customer service and inconsistent availability. Third, distributors can't take anywhere near the cost out to support the potential lost business, so look for them to replace it with-in this order-Hewlett-Packard or white boxes. A few weeks ago, Tom Tarasoff, general manager of Hewlett-Packard's Computer Products Organization, stopped in our headquarters for an informal channel review. While HP has its own challenges, they still have the best chance-through price, brand, logistics, U.S. management and commitment-to service the channel. Tom represents that commitment. Should HP seize the opportunity, it has a chance to considerably gain on Dell and Compaq. It may even rival Compaq's 386 introduction. Clearly, the white-box opportunity will gain in importance. Witness the quiet announcements out of Tech Data and Ingram Micro over the past quarter. Further, when Ingram Micro takes one of its proven stars, Doug Antone, and says, "Let's build us some white boxes," the lines have been drawn. Forewarned is forearmed. Sell services and control your customer. MARTY WOLF is president of Martin Wolf Associates, a San Ramon, Calif.-based investment banking firm. MWA is a leading provider of professional merger and acquisition advisory services, and information and events for midmarket technology products and services companies. Its next M & A Forum is Feb. 24-26 in Washington, D.C. He can be reached via E-mail at mwolf@mwainc.com.