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

To: jim kelley who wrote (41353)	12/27/1998 9:06:00 PM
From: rudedog	Read Replies (1) \| Respond to of 97611

Jim - CPQ has acquired a powerful patent portfolio through DEC and Tandem. In clustering technology especially, Tandem and DEC between them had almost every patent worth having. Underpinning cluster technology are storage and data routing methods which are also covered under those patents. They even have a strong silicon portfolio - Tandem has superscalar patents which Intel has to license, and the results of DEC's suit of Intel for patent infringement are well known. Now all they have to do is execute. I don't think technical execution is the problem - CPQ has always been able to do that well, and I expect a lot better use of the Tandem and DEC technology base under CPQ. The area where CPQ has the most work to do is in field execution, primarily in North America. They will have a difficult balancing act in '99 as they transition away from the channel model, and they are also shifting into a different major account strategy. That's the area I am watching most closely. The more I look at DELL, the more respect I have for their field execution. I think that most people have given insufficient recognition to the huge role that DELL's North American field has played in their enterprise success, or how well thought out the strategy was. This was not just an exploitation of weakness on the part of CPQ and others - it was a different and better way to effectively use a small resource base, in its way as innovative as DELL's manufacturing model. That is the kind of thinking CPQ will need to do if they are to really take off. Obviously, that's an area where there is little value in taking pointers from the DELL playbook - CPQ's business is too different. But they could certainly take heed of the focus and drive that DELL has shown.