To: Nadine Carroll who wrote (45791 ) 2/5/1999 10:49:00 AM From: Knighty Tin Read Replies (1) | Respond to
Nadine, There is nothing wrong with services. The problem is that they are a very easy area to fudge revenues and eps. IBM has made this an art. Note that the service area grew at rates that are much higher than any other part of Compaq's business and way beyond any growth rates DEC and Tandem have been able to achieve. Is CPQ mgt. just that much better six months later? Or are they pulling the IBM trick of taking down service contracts aggressively and recognizing multi-year revenues very early in the life of the contract? I suspect it is a combo of these two factors that account for the growth. And, since CPQ has always been known as a customer service disaster in its traditional businesses, I suspect that the bigger portion of the growth pie is aggressive accounting.
