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

To: Captain Jack who wrote (61519)	5/18/1999 1:17:00 AM
From: beachbum	Read Replies (1) \| Respond to of 97611

thread more on cpq potential in storage mkt.......... off tmf board <<1. The storage market is growing 30%; I follow EMC and market reports and believe that this is a safe estimate for five year growth. This growth rate far exceeds the current rate for PC's, which is in fact declining. 2. I have always felt that the power of the DEC/Tandem/CPQ marriage was the opportunity to develop and sell high end, low cost IT solutions by integrating the low cost CPQ/PC culture (driven by volume and declining cost), with the high tech offerings of DEC/Tandem. 3. An Alpha/RAID/Linux solution to terabyte storage, priced in the PC arena is a low cost solution to an emerging problem, that is being driven by, among other important areas, data warehousing and ecommerce. There is no product on the market that can even begin to get at the cost structure of this approach. 4. High tech companies that develop leading edge solutions often price their products, let's say very high; not driven by cost. Examples, EMC, IBM, HP. Their solutions are proprietary; CPQ is using standard solutions and they have licensed Alpha. 5. The supplier with the storage solution gets the "box" sale. 6. Dell has no competting products, like a 64 bit CPU, to offer and won't until MERCED is available next year. 7. IBM and HP have a problem in that their proprietary platforms would have to take a big price hit to get into this price segment. 8. Linux works and continues to evolve into an increasingly competitive solution in terms of both performance and cost. Keep in mind that all the work that CPQ has done on the kernel becomes part of the standard Linux platform. This is also true for anyone else who adds to kernel capability. For large systems that have 1000's of work stations this is a big deal. Short of giving their software away there's little Bill can do. Even if Bill gives his OS away that will only make his product equal in price. 9. Compaq can have high margins and compete on price. 10. A low cost solution will increase the growth of the storage segment. Conclusion, Compaq is uniquely positioned to combine its solutions into a market leading position in the storage segment with growth greater than 50% over the next several years. We have a starting number for CPQ's current sales of storage products of $9 billion. If the rest of the business has zero growth CPQ should still see EPS growth in excess of 20% because of improving margins in this segment.>> future looks good to me....... thanks ed