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To: Mohan Marette who wrote (86502)	12/21/1998 9:06:00 PM
From: Voltaire	Read Replies (1) \| Respond to of 176387

GE DELL IBM AOL MSFT CSCO WMT HD What separates the companies above from the company below? CPQ MANAGEMENT! Enough said. Voltaire

To: Mohan Marette who wrote (86502)	12/21/1998 9:33:00 PM
From: rudedog	Read Replies (1) \| Respond to of 176387

mohan - I think this is a well thought out article which addresses the deepest problem that CPQ has, and also correctly points out that it was a problem which both CPQ and DEC had before the merger, so the combination is unlikely to change things, in and of itself. I am a technologist and tend to focus on technology strengths and weaknesses, and on that score CPQ has done extraordinarily well with its acquisitions, especially given where they want to go. They are in a position to develop a leadership position in mainstream technology that even Intel will not be able to challenge. IBM has a broader technical base but nowhere near the focus. But in field operations, especially in North America, CPQ has been a mess for a long time. Ross Cooley maintained a crumbling channels empire years after it should have been scrapped, and CPQ paid the price this year as they began to wean themselves away from the channels model. In reality, they had been paying a huge tax on this strategy since at least '93. This model resulted in virtually no account control - CPQ didn't even know what customers were using their hardware, in many cases. When they started to address this in 1994, they had more fights internally with all the folks on the 'channel drug' than with the channels themselves. It is too early to say how well the reorganization of the field is really going, although I see some progress being made. At least CPQ has committed to make the shift, and is devoting a lot of top talent to solving the problems. They have a good model in Europe which seems to be working. They now have a lot of resources in North America, and a very talented sales and marketing VP in Peter Blackmore, who came over from the European organization. It's an area I will be watching closely in 1999. Thanks for an interesting article.

To: Mohan Marette who wrote (86502)	12/21/1998 10:44:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 176387

Mohan, an interesting article, but it side steps the major issue: cause. First, these are really mergers, not acquisitions despite the fact that Compaq is the dominant and emergent company. Why? Because this was a "friendly" merger. That implies that entrenched management remains entrenched, and there is generally very little incentive to change the way business is done in the acquired company. The result is a general drag in achieving those "synergies" which every company's CEO talks about, but few can effect. The only company I can think of that routinely engages in friendly take-overs that actually work is Tyco Int'l (TYC). So for now I expect CPQ to execute like a cobbled-together company. Smooth integration of operations is probably beyond the grasp of the existing management team because there is no impetus for changing the way things are done. TTFN, CTC