To: kemble s. matter who wrote (123643 ) 5/11/1999 6:15:00 PM From: Bandit19 Read Replies (1) | Respond to of 176387
Kemble, This is music to my ears, " Expect DELL to exploit Compaq's woes and take the PC lead this year." Tuesday May 11 2:32 PM ET Compaq Services VP Resigns, 4th Key Exec To Depart Full Coverage Compaq Shake-Up By Eric Auchard NEW YORK (Reuters) - Compaq Computer Corp. (NYSE:CPQ - news) Tuesday said the head of its key computer services business planned to resign after a replacement is named, the latest in an exodus of top executives from the struggling computer maker. The Houston-based company said John Rando, senior vice president and general manager of Compaq services, will resign from the company effective July 1. He is leaving to pursue unspecified personal interests, a spokesman said. Rando's departure comes on the heels of last month's forced resignation of Chairman and Chief Executive Eckhard Pfeiffer after the stunning revelation that Compaq's first-quarter profits would be half of Wall Street's expectations. He was joined by Chief Financial Officer Earl Mason, who resigned to take a job as chief executive of Alliant Foodservice Inc., an Illinois food distributor. Further fallout came as Compaq disbanded its worldwide sales organization, eliminating the job of Michael Heil, the company's sales chief, who left for a job at CommcoTec Corp., a Stamford, Conn. telecommunications start-up. ''This is part of a changing of the guard at Compaq,'' said industry analyst Carl Howe of technology research firm Forrester Research Inc. (Nasdaq:FORR - news) ''There is a power struggle going on,'' he said, as an interim management team seeks fresh leadership. Managers of Compaq's geographic and marketing regions now report to an office of the chief executive, composed of three Compaq board members, including Ben Rosen, Compaq's chairman and co-founder, who holds the title of acting chief executive. In addition, Compaq marketing chief Enrico Pesatori was reassigned to the newly created position of senior vice president and general manager, global regions, in charge of emerging markets in Asia-Pacific and Latin-America. ''Pfeiffer's forced ouster has condemned Compaq to a year of reorganization,'' Howe said of the executive searches, strategy development and execution of changes that must occur to develop a new executive team to replace the depleted top ranks. Spokesman Alan Hodel said Compaq's computer services business has a strong management team serving under Rando. However, the company plans to consider both internal and external candidates to replace Rando, he said. Rando joined Compaq as part of its $8.4 billion acquisition of Digital Equipment Corp. last June. At that time, Rando pledged to double the size of Compaq's services business by 2002. Rando headed Digital's 9,000-employee computer services unit -- a prized piece of Digital's business Compaq cited as a key objective of the merger. The services business accounted for $1.6 billion, or 17 percent of the company's total first-quarter revenues, putting it on track for revenues above $6 billion for 1999, out of projected total Compaq revenues of about $38 billion. Compaq's computer services unit is considered a linchpin of its strategy to extend beyond its No. 1 market share position in personal computers to move more aggressively into the market for powerful computers used to run key business operations. Computer consulting and technical services are crucial in serving the high-end corporate computer market, by providing the customer hand-holding required to maintain computers handling up to millions of simultaneous customer transactions. Compaq's combined services staff now numbers 27,000 employees, or more than one-third of the company's 69,000-member workforce. Rosen, long the power behind the throne at Compaq, has said the management shake-up has been necessary to instill new leadership ready to manage the increasing complexity of Compaq's organization and clarify its marketing messages. He has argued that the company's fundamental strategies remain sound, but that management execution must improve. Meanwhile, fast-growing Dell Computer Corp. (Nasdaq:DELL - news), the world's second-largest personal computer maker may be able to capitalize on the distractions and eclipse Compaq's as the No. 1 computer vendor, Howe said. 'Expect Dell to exploit Compaq's woes and take the PC lead this year, '' he said. ---------------------------------------------------------------------- Go DELL!! Steve