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

To: rupert1 who wrote (60292)	5/2/1999 6:00:00 AM
From: rupert1	Respond to of 97611

Sorry about the repeated posts. The second one is the final version.

To: rupert1 who wrote (60292)	5/2/1999 9:31:00 AM
From: Elwood P. Dowd	Respond to of 97611

Kenya, Victor, Loki, and all... thanks for the explanation of the "missing .16 cents." El

To: rupert1 who wrote (60292)	5/2/1999 10:52:00 AM
From: E_K_S	Read Replies (2) \| Respond to of 97611

Hi Victor: I think CPQ's transition to a service company may indeed require a higher SG&A ("...Some of this high SGA arises from the nature of the services business...) as you state in your review. Have you looked at what a traditional Service organization's SG&A's run at? Say IBM or EDS? IMO any efficiencies CPQ obtains in their channel sales will be off set by lower margins on product sales, so we can not count on any significant savings in this area. My guess is the real gains will be from increased growth in Service Revenues while managing the specific SG&A overhead by installing more productive internal systems. They could consolidate customer support phone services, utilize their Web site(s) to provide more enterprise customer (specific) support, offer enterprise customers managed network (off-site) services (ie. sub-contract Novell enterprise services) and many other "efficient" service support software. Any labor reductions must be replaced with higher productive technology that deliver better customer support. CPQ should look at what IBM is doing in their Service Area and just do it better! The key to providing excellent cost effective services, will be how eventually CPQ integrates their in-house consultants with their top 1000 service accounts. One efficient solution is to utilize network management systems that can be administered remotely by CPQ's service teams through PDA's and network management software. Sun Microsystems has recently announced an interesting service for large enterprise customers....Sun To Unveil Software For Mobile Workers (https://www.siliconinvestor.com/readmsg.aspx?msgid=9159594). Perhaps CPQ could provide such a service for their top 1000 customers. Here the marginal SG&A costs for such a service would be minimal compared to the total gains CPQ would receive in customer satisfaction and increased Service Revenues. EKS