The server market was a little less than receptive to the joint HP-Compaq entity, but analysts say the company is well on its way to recovery.

The merger meant a loss of some ground in the server space for HP, said IDC infrastructure hardware

research manager Alan Freedman. He said that in the first quarter of 2002, HP held 12 per cent of the server market and Compaq had 21 per cent of the space. In the following quarter, the joint HP-Compaq presence fell to 27 per cent, though it climbed up to 28 per cent by the fourth quarter.

The company’s total market share for 2002 was almost 30 per cent — not bad considering all major mergers come with an expectation of at least temporary performance upheaval, Freedman said. As product lines consolidated there was some confusion among customers and dealers. The companies handled the merger relatively well, he said, but there were some hitches along the way.

“”Some of our research shows that they could have done a better job communicating with and keeping in contact with some of their (channel) partners,”” Freedman said.

A year after the merger, the dust is starting to settle. Data suggests that HP is on its way to larger market share, he said.

“”As product lines solidify and confidence among partners and customers grows, we predict that they will be a major player going forward,”” Freeman said.

Customer Close-Up: Hugh Couchman, a professor in the department of physics and astronomy at McMaster University in Hamilton, had his first disappointment before the merger was completed.

A user of Compaq’s AlphaServer, Couchman discovered that the line was being discontinued in favour of Itanium in 2001, although Compaq promised that support for the product would continue. The announcement of the merger added to the stress of the department and other AlphaServer customers, who feared that the situation would worsen. However, according to Couchman, this hasn’t been the case.

“”It’s a bit surprising, but as far as the merger went, it was seamless — it was transparent to us,”” he said. “”In fact, all of the people we dealt with at Compaq, we’re still dealing with, but from within HP. They really understand academic researchers, and that continuity through Compaq and HP makes us feel comfortable.””

The department is applying for a budget for a complete technology refresh in the next year, and Couchman said that the timing is good. Because its relationship with Compaq has been so smoothly transferred over to HP, Couchman said the department is confident it will find what it needs.

“”There are strong technical parts of HP that seem to be making valuable contributions to the Compaq offerings, and as we’re at a changeover stage with the Alpha, we’re taking a good look at what they’ve got,”” he said.

Tsaparis says: “”Almost to a person, people said the merger was completely transparent,”” he said. “”You feel quite proud of your team when your customers are telling you that, because that means that they’re continuing to be served in the way they wanted to be served.””

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