All Canadian enterprises are asking for from the combined Hewlett-Packard Co. and Compaq Computer Corp. is a high level of support for their existing IT investments.
Organizations
around the world are preparing themselves for a transition to merged product lines and in some cases a new relationship with their key technology supplier following the completion of HP’s US$18 billion merger with Compaq Tuesday. The new HP held a series of employee, customer and media briefings throughout the day where it answered many of the product roadmap and organizational questions that have plagued the two firms since announcing their plans nine months ago.
While HP will become the main brand for its entire lineup, many of the Compaq sub-brands will remain for specific devices and segments. HP has reorganized itself under four main business areas — enterprise systems, imaging and printing, services and personal systems. Compaq workstations were the primary casualty of the enterprise space, where they will be replaced by HP workstations running Intel and PA-RISC processors. In high-end servers, on the other hand, Compaq ProLiant servers will continue to be sold, as will the NonStop brand of servers, the Tru64 Unix and Open VMS operating systems. In high-end supercomputing, HP will standardize on Intel’s 64-bit Itanium platform and will support Windows and Linux in addition to Unix.
For the desktop and notebook segment, HP’s ePCs and Vectras will give way to Compaq products, and the company will retain Compaq’s Evo branding strategy.
As was widely expected among resellers and industry analysts, HP’s Jornada will be replaced by Compaq’s IPaq, which will be renamed the HP IPaq Pocket PC. In the consumer segment, the company seemed hesitant to make a decision: desktops and notebooks will be offered under both existing HP and Compaq brands, though an executive said the merger would allow bundling of a Compaq consumer notebook, for example, with an HP printer.
HP chairman Carly Fiorina called the merged firm the largest consumer technology company in the world and “”one of the largest”” enterprise companies. While she emphasized her satisfaction at the completion of the deal, which narrowly met with shareholder approval last week, she said HP’s reinvention was a necessary reaction to what she saw as the ongoing decline in the industry overall.
“”This industry will never return to the days of 20 and 30 and 40 per cent growth. It is an industry that will be characterized by slower growth,”” she said. “”It is an industry that will consolidate, and HP is leading that consolidation.””
While Fiorina and other HP executives have said the two companies have been in constant contact with customers as the deal faced legal and regulatory challenges, some Canadian users admit to being left in the dark over key details.
“”From a user perspective, really it’s been a wait-and-see approach for the last six months,”” said Joseph Iuso, who is a member of the Canadian Compaq Users Association. “”The users are pretty happy with the service they’re getting, the quality of the Compaq people and what they’re delivering.””
Iuso, who is also past president of the Canadian Tandem Users group, said users were more concerned with support than individual product lines. “”(The combination of both companies) offers more muscle behind the fault-tolerant services,”” he said. “”(Tandem users) been through this twice now. Their emotions are very low this time around. They’re not up in arms or anything like that. It’s just more a question of whether HP will keep the same level of service and quality.””
Some Compaq users have already had to cope with its decision to phase out its Alpha line in favour of Intel’s Itanium-based machines. Hugh Couchman, for example, is a professor at the University of Toronto where what may be one of the last Alpha supercomputer installations was completed about a year ago.
“”People here are asking me what’s going to happen, and I just don’t know,”” he said. “”The bottom line, of course, is we’re in a field which changes so rapidly anyway. Some of us were disappointed about the Alpha, for example, but it’s not as though this kind of thing has never happened before. There’s some expectation that we have to be prepared for these sorts of changes.””
At the University of Montreal, where HP last year forged a $3 million deal to supply 75 per cent of its 1,300 faculty with desktops and notebooks, associate vice-president of IT Pierre Bordeleau sounded more confident about the future.
“”We already have many HP servers in our computer rooms, and we’re very satisfied with it,”” he said. “”We have a couple of small Compaq machines, but that’s all.””
Many resellers sell both Compaq and HP but some, like St. John’s-based Triware Technologies, are primarily Compaq shops. Triware president Art Stanley said he hoped HP would keep in mind customer loyalty to both brands and that users would not feel alienated by the combined organization.
“”The more product selection you have out there, the better service is. As you eliminate competition, sometimes service suffers. We hope that doesn’t take place,”” he said. “”I would hope that they’re doing this for efficiencies more than anything else.””
HP did not announce layoffs Tuesday but confirmed that they would likely number around 15,000 over the next six to nine months. Some of these, Fiorina said, would include voluntary buyouts, adding that the growth of various business units means that the company would still be hiring over the next year.
HP’s combined Canadian organization will continue to be led by Paul Tsaparis, while former Compaq Canada president David Booth has moved over to vice-president role within its Americas telecom business unit. Other members of the Canadian management team include John Trisic, who will lead the imaging and printing group; Lloyd Bryant in the personal systems group, former Compaq services vice-president Reg Schade will lead the services group while Tsaparis will handle the enterprise group himself.
HP Tuesday said its redesigned Web site was prepared to take orders or refer customers to resellers. The site features technology that will allow users to search within the two company’s legacy sites.
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