
More questions than answers...
Published: 4 September 2001 09:55 GMT
Michael Capellas promised he'd turn around struggling Compaq in 180 days. Now we know that after just 84 he has taken one big shortcut.
After a slow summer, news of the HP-Compaq merger has come like a bolt out of the blue. Nobody predicted this proposed deal in the same vein as, say, Compaq's purchase of Digital in January 1998. And we can be sure the stories accompanying this landscape-changing deal will run and run.
The boards of Compaq and HP have approved the merger, but how about the companies' shareholders? Both are huge players, but there is a lot of overlap and duplication. To fulfil the $2.5bn in predicted cost savings, which product lines will go the same way as so many employees?
Take their PC and server businesses. It is anyone's guess as to which lines, which models, and which choices of software will emerge as the new company's preferred options. And while we speak about a new company, will there be a new name, or will Compaq disappear?
In certain areas Compaq will undoubtedly have the upper hand. In the PDA market the success of the iPaq handheld may well mean the end of the HP Jornada. And we know that after HP failed to deliver the PwC deal, getting hold of all those Compaq services personnel - many of whom came from Digital - must be central to the deal.
And yet this still says nothing about the future of both companies' dogged storage businesses, a subject we'll be bringing you more on.
Finally, if we began this 'first impression' by mentioning Compaq CEO Capellas - who is taking what can only be described as the backseat role of president - there must be a doffing of the cap to HP boss Carly Fiorina.
She began her reign around the same time Capellas was given the nod at Compaq, but after some difficult quarters, this will be seen as her defining moment. She will remain CEO and chairman, but now of a company that will have sales to rival the biggest of the lot, IBM.
We repeat, this is not a done deal, not yet. But the industry looks very different this morning.
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