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

To: David E. Taylor who wrote (39625)	12/11/1998 5:50:00 PM
From: Night Writer	Read Replies (1) \| Respond to of 97611

Computer Reseller News Research Shows 'White Boxes' to Challenge Branded PCs in the Enterprise Market MANHASSET, N.Y.--(BUSINESS WIRE)--Dec. 11, 1998-- Follows Trend Among Small Businesses New research conducted by CMP Media's Computer Reseller News shows that unbranded personal computers (PCs), so-called "white boxes," will challenge name-brand PCs in the large corporate or enterprise market. The trend is being fueled by the decision of two leading IT-products distributors to offer white-box configurations for sale by resellers. Traditionally, unbranded desktops PCs have been built by smaller resellers and sold to their small-business clients. In this market, white boxes are best sellers, often beating out the top four major vendors combined. A December spot poll conducted among 250 resellers and reported in the technology newspaper's December 14 edition, found that 68 percent feel that units built by distribution giants Tech Data Corp. (Nasdaq: TECD) and Ingram Micro Inc. (NYSE: IM) will give the category sorely needed credibility among corporate MIS directors. John Roberts, Ph.D., CRN's director of editorial research explained: "These resellers perceive a major new opportunity to sell white boxes to large corporations, allowing them to expand their business operations and directly challenge major vendors like Compaq and Hewlett-Packard, which have held sway in this market." Fully half of the resellers responding to the CRN survey said they would start buying white-box PCs configured to their customers' specifications from distributors within the next six months, and sell them to their clients. Most of these resellers have been building these units themselves in the past, and at least initially will continue to do so, but this could change in the future depending on how well the distributors meet the resellers' needs. Resellers are not the only ones that see white boxes penetrating the enterprise market. Additional CRN survey data show that MIS executives at large companies (defined as those with annual sales of at least $500 million) are becoming more open to the idea of using white box desktops in the workplace. A separate CRN survey of 200 MIS executives in October showed that 22 percent are planning to buy white box desktops in the next 12 months, up from 17 percent a year ago. Among midsize companies the figures are even higher; 40 percent of 200 midsize company MIS executives CRN surveyed in November said they were planning to buy white box desktops in the next 12 months, up from 35 percent a year earlier. Midsize companies are defined as those with annual sales between $20 million and $500 million, and at least 100 employees. Published by CMP Media Inc., Computer Reseller News has a circulation of more than 115,000 and reaches readers with the product trends and industry news needed to sell comprehensive technology solutions. The publication's news coverage is also available via e-mail through CRN Direct. This free, customizable daily newsletter--available in both text and full-HTML formats--allows users to choose up to 20 companies, products and trends to track. Registration for CRN Direct is available through CRN Online (http://www.crn.com). CMP Media Inc. (Nasdaq: CMPX) is the leading high-tech media company providing essential information and marketing services to the entire technology spectrum--the builders, sellers and users of technology worldwide. With its portfolio of newspapers, magazines, custom publishing, Internet products, research, consulting and conferences, CMP is uniquely positioned to offer marketers comprehensive, integrated solutions tailored to meet their individual needs. Online editions of the company's print publications, along with products and services created exclusively for the Internet, can be found on CMPnet at cmpnet.com. NSTL, the company's independent testing lab and consulting organization, serves government, corporate and technology vendor clients around the world. CONTACT: Barry J. Zusman (516) 562-7040 bzusman@cmp.com or Steve Rubel (516) 562-7434 srubel@cmp.com

To: David E. Taylor who wrote (39625)	12/11/1998 7:35:00 PM
From: Harry Landsiedel	Respond to of 97611

David. Re: "Your last point is an often-overlooked one." I agree and it's one of the reasons I've made such a large commitment to CPQ. Because it's hard to quantify this potential, I think the market is not figuring this factor into earnings growth/PE going forward. This is one reason CPQ may have more potential than Intel IMHO because there's more potential share to gain. The inventory problem and DEC merger obscured this factor this year, but I feel those are behind us now and the new direct initiative for small business will accelerate CPQ's growth in this space at the expense of HWP and IBM IMHO. HL