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HP Buys Compaq
MaxVlast was the first to report: "The New York Times is reporting that HP is buying Compaq to form the second-largest computer company (after IBM). Wow."
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Could someone with an account please post the article. I'm a bit shocked. I figured with Carly at the helm, HP wouldn't do anything worth shit. I just can't imagine them having enough money for this....
For Hewlett Compaqard?
Donate background CPU time to fight cancer.
What happens if HP and Microsoft fight ... HP are already on record as saying they would go elsewhere if they could ...
OS/2 - because choice is a terrible thing to waste.
Thought the first: Is bigger always better?
Thought the second: HP and Compaq are both really awesome companies (if you exclude their home computer divisions). This is cool.
I was discussing this with my parents a few days ago:
Gateway is apparently in the hole because they don't offer much "unique" and with computer sales allegedly having a bad forecast, this doesn't leave much room for competition: Dell, IBM, and now "HP/Compaq" are here to stay.
Can we expect to see more mergers, or what's the deal? With computer "builders," we don't really suffer from the lack of standards, interoperability, etc. that we see in harware/software...so are these mergers really helping consumers or just gaging the diersity of merchants?
Hewlett Paqard?
...c'mon, _someone_ was gonna say it...
If I remember correctly, Compaq had eaten up a lot itself. Didn't it do Tandem (high end corporate mainframe like machines) and whoever did the Alpha (Digital, right)? I don't see how those have really grown, but maybe they've got some eye on some of Tandem's technologies for their midrange line. But you'd have to think that Compaq has a bit of indigestion from it.
Now, here comes HP, buying up Compaq? Well, at least Alpha/Tandem seems like a better fit for HP than it ever did for Compaq.
Anyhow, it seems like HP is picking up a LOT of baggage that they're going to end up throwing away. Sounds like an awfully risky business venture.
With this one, I'd have to say that Fiorina has some balls
- Hewlett-Packard to Cut 6,000 Jobs (July 27, 2001)
- Compaq's Revenue and Income Fall (July 26, 2001)
- Hewlett Profit Falls but Beats Expectations (August 17, 2001)
- Compaq to Emphasize Computer Services (July 17, 2001)
- Market Place: Compaq Announces More Layoffs (July 11, 2001)
Big time mergers are usually between successful companies or at least where one of the companies is having a particular successful run, this looks like a merger of companies are both fucked. Also considering the amount of overlap in their products, expect more layoffs.Sad, indeed.
How will they combine PC color schemes? Rose! Pink! Disaster!
spacefem.com
Hewpaq Compardlett
obviously
Screw you all! I'm off to the pub
While Compaq hasn't done much with Alpha since it bought out Digital, there was always that hope that something new would eventually come out. Alpha was a lovely chipset for all of its thermal and pricing issues (which could've been solved by a company with more drive and fewer pitfalls than Digital/Compaq had.)
But now that HP is buying Compaq, any life that could've possibly been breathed back into Alpha is completely dissipated. HP is firmly in bed with Intel on the Itanium line (fronting cash, codevelopment, independent liscensing, etc.) Whereas Compaq hadn't had much incentive to improve Alpha, HP has exactly zero interest, since that would mean directly competing with and undermining the success of Itanium.
The polite course of action would be to release Alpha completely into the public domain, but that's a farcically utopian request. I'm just always saddened when competition is reduced and choices are constrained. Let's just hope Apple and the PPC line don't go bust in the near future, leaving us with absolutely no alternative to Intel's offerings (which are beginning to look more and more like crap as the years pass) and AMD's parallel offerings in the same architecture.
Pending regulatory approval, the new company will hold a 19% share of the global PC market. Dell comes in second at 13%. Also interesting HP-Compaq will hold a 37% share of the market for high-end servers. With such a 500 pound gorilla on the field, it would definitely be nice for them to emphasize Linux support.
The big loser in the deal - Lexmark. Compaq had been one of their largest customers for bundled printers.
- Carpe diem, quam minimum credula postero.
Compaq's been working a while with Intel on transitioning from the excellent Alpha processor line to Intel's unproven Itanic, er, Itanium line for their high-end systems. They even transferred a lot of Alpha engineers to Intel, who are now Intel employees, so they could work on Itanium instead. Personally, I thought all that was really stupid: Alpha is a great architecture, and has a lot of life left if they'd do improvements like moving it to a 0.13 micron process.
HP has its own 64-bit RISC processor architecture, PA-RISC, which they use in their workstations. But they've been talking about phasing this out as well (are they going to Itanium too?).
So what's HP-Compaq's new strategy going to be? Give up on competing in the 64-bit processor space, fire all their engineers, and just buy Itaniums, and become glorified computer integrators? Or will they pool what's left of their resources and concentrate on making one great 64-bit processor to compete against the UltraSPARC and Itanium?
When announced job reductions, of 8,500 jobs at Compaq and 9,000 at Hewlett-Packard, are completed, employment at the companies will be about 62,800 at Compaq and 87,000 at Hewlett-Packard. Further reductions seem likely, as executives said that they expect annual cost savings of $2.5 billion within several years.
In its most recent 12 months, Hewlett-Packard reported revenues of $47 billion, while Compaq had revenues of $40 billion. The combined $87 billion is close to the $90 billion reported by I.B.M., and far above the $33 billion for Dell Computer, which now ranks fourth and would move to third if the merger is completed.
In its most recent financial report, for the nine months through July, Hewlett-Packard said its revenues were down 5 percent from the comparable period a year earlier, to $33.7 billion. But its net income fell 82 percent to $506 million. Compaq, reporting on the six months through June, said revenues fell 13 percent to $14.2 billion. It suffered a net loss of $201 million for the period, compared with a profit of $684 million in the same period of 2000.
I will not ever sit back and haplessly allow my company to abandon the things that make it unique, the individuals that have brought it to where it is, in order to pursue stupid figures such as yearly profit.
Just because there is an 'economic down turn' does not mean that, for the next FIVE YEARS (not three months or one year or next week, as the rapidly changing investors' markets focus on)HP won't be pioneering in quality, reliable computer technology. As someone who actually gives a shit about the future of companies that produce products that I like, I refuse to believe that the stock market's logic can positively affect these companies.
Short term profit goals must be met in a modern investment climate. HP and Compaq merged to save money, but they will wind up cutting the very things that make them unique and separate products in order to save money.
Compaq and HP merging is like Kia and Saab merging. HP computers kick so much ass, and last for such a long time
I have an ancient HP Vectra VL2 downstairs that still carries its own weight in my household. What parts of shitty Compaq will they be using in HPs now?
Parts of hardware? Parts of support?
I don't really care one whit about the existence of Compaq or not, and I can't see any benefit from HP having a larger cashflow, except for to the stupid stock market, which has nothing to do with the basic economic dynamic of a company producing a product to please its customers.
Goat sex free since 2001
And this is after HP laid of 6,000 people in July.
Check the above link to read about this merger...
¦ ©® ±
Welp, with Bruce Perens whispering in Carly's ear, I suspect they will:)
- James
This means HP will inherit the Alpha processor. They already have the PA/RISC and are "co-developing" some of the IA-64 line with Intel. They also inherit cool products like the Itsy and the iPaq.
Linux is the only OS that will run on their entire architecture: Alpha, PA/RISC, IA-64 and x86. They sell machines with all of the above processors.
The makes a "Big 3" of Unix vendors: IBM, Sun, HP/Compaq.
SCO was acquired by Caldera, but they, along with all the other Linux vendors, are wannabes next to that bunch.
Unless I am missing someone, that really only leaves SGI as the remaining "big" Unix vendor. I wonder if they are going to be bought; wither-and-die; or if they can make a go of it alone.
Learning HOW to think is more important than learning WHAT to think.
The most immediate impact I predict is in PC sales. I've always had the impression that Compaq did much better in this market than HP, and ignoring the fact that all Compaq PCs now are HP PCs ;-), there's now one less choice for Joe Average Consumer. I haven't been to a non-online computer reseller in years, but IIRC places like CompUSA had very few brands -- Compaq, HP, Toshiba, and maybe some Macs. Dell and IBM only sell direct, right?
I only hope that HP is nicer to Compaq than Compaq was to DEC. :-0
--
I like to watch.
I'm amazed... wow!
However, I think it's bad that HP is buying Compaq, instead of the other way around... I've never been impressed with HP's products (other than printers, which are the best), particularly their servers or workstations.
I've always preferred Compaq's to theirs. It will be sad to see the end of the Deskpro workstations and ProLiant servers, which were always a pleasure to install, set up, and even repair. I've had to replace several customer's paper-thin motherboards in HP NetServers... Compaq servers are built to Millspec, like most of the IBM servers. HP's are more plastic and flash, much like Dell servers.
Ms. Fiorna has pretty much led HP down to ruin since jumping off Lucent just before THEY went to ruin, so entrusting her to lead this new beast may be a shaky proposition. I don't really see how swallowing Compaq will really gain HP anything new, as the only really interesting technology Compaq had (Alpha) they've pretty much given away. I see this as HP gaining a lot of overhead, a lot of revenue, but little in the way of additional profit, as Compaq has the very same market problems HP did.
Looks to me like the only REAL gain HP makes is getting a MAJOR competitor out odf the way...
=== The price of freedom is eternal vigilance
Compaq snapped up Digital a couple years back. Digital had a ton of industry intellectual property... probably more than anyone other than IBM. Networking, CPU design & fabrication, Relational DB, clustering, DASD, Messaging, etc etc.
...
Compaq couldn't really do much with it, and sold much of it off to Oracle, Intel, Cisco, etc
But not everything was sold to the high bidder. Some of it stayed within the corners of Compaq, waiting for a brighter day.
HP's culture certainly could benefit from much of that technology, and it's far more likely that HP can leverage some of technology to propell itself into IBM's datacenter space.
But the HP deal could weaken Linux a little bit, because HP isn't as much of a Linux advocate as IBM, and is an Intel/Microsoft partner & advocate (unlike Sun).
So, in the end, this deal could help Microsoft and hurt Linux.
I use a HP Workstation at work that uses their 64-bit PA-RISC processors. This workstation also uses a USB keyboard and mouse. While it does seem pretty smart to move right to USB for a Unix workstation, the mouse and keyboard they provide are total crap. The keyboard is a $5 special like most companies provide with their cheapest budget computers at Wal-Mart. This is on a $40,000 workstation.
But what's really funny is how they implemented the USB interface. I had my keyboard replaced, and of course they'd only give me another one exactly like it. When the technician came to swap keyboards, he powered down the machine before removing the keyboard. I asked him why he was doing this (this workstation takes forever to boot), since USB is supposed to be hot-swap. He told me that they'd tried that before, and had destroyed several motherboards! So now that IT department has a policy of powering down workstation before changing any peripherals, even if they are supposed to be hot-swap. Apparently HP forgot to implement the hot-swapping part...
I'm not a businessman, surely someone around here can enlighten me.
I hope they won't rename OSF / Digital Unix / Tru64 again!
It's 11pm, do you know what your deamons are up to?
Very few mergers succeed, even when there does appear to be some legitimate synergy or corporate fit. On paper it made a lot of sense to combine Chrylser and Daimler. In practice, the two cultures were so different that they seem bent on destroying each other rather than making the combined company better.
Now Carly is going to take two companies, each weakened by current economic conditions, and combine them. Where exactly is the synergy? Two manufacturing organizations, neither the lowest cost nor highest quality in their market, and both in thrall to Intel? That's a good combination.
And so on down the line. Synergy is vastly overrated when it EXISTS, and I have a hard time seeing any hear. Doubling the size of the Titanic would only have caused it to sink twice as fast!
sPh
This is huge. I'm a big fan of Compaq servers, but HP's x86 servers have never impressed me. I hope they incorporate a lot of Compaq's management in to their line.
Compaq was already dropping the Alpha in favor of Itanium. Itanium is an Intel/HP joint project (and I read about that in Byte when I was still in high school, probably when the Pentium came out about eight years ago -- something like "Intel is working on the 786 with Hewlett-Packard, and it will be a revolutionary change, so much so that they are also working on a backup design (P-IV, anyone?) in case it doesn't work").
I'd say this removes any doubt about the fate of Alpha, but HP might be hoping to incorporate some of the Alpha technology. This might also raise some anti-trust concerns, since I'd been reading (Here? Ace's Hardware?) that AMD was looking at making a dual x86/Alpha instruction-set chip to compete with Itanium. They've already licensed a couple of things. Oh, well, I suppose they could go with SPARC or PowerPC. If they went with PowerPC, that could allow for a pretty nifty PC-compatible Mac, if Motorola went along...
Well, I know Bruce is a regular here, and will probably have some feedback somewhere :), but I'm wondering if this will provide more corporate level exposure to Linux with the modus operandi of "challenge the executive", IIRC, in the Compaq ranks as well as the HP. The actual merging of two companies of this size is rare and hard to predict, but in the fray sometimes new ideas come up that are entertained that might not otherwise be. I am curious as to how this will affect Bruce Peren's (et al) influence on HP and Compaq, but I don't want to speculate on it.
I don't know what HP servers you're using. The PA/RISC servers are beautiful boxes--bulletproof and elegant. I've never seen a Compaq (and I've seen a lot of Compaqs) that came anywhere near the same quality.
"People who do stupid things with hazardous materials often die." -- Jim Davidson on alt.folklore.urban
HP has a market cap of about $1.5B, CPQ has $24B. HP will have to issue 25x their current float to make the acquistition which leads one to wonder why CPQ isn't the acquirer. It strongly suggests that CPQ is a mess.
The net result should be a collapse of both stocks in the premarket. But then i've never been able to predict these things.
[drumroll]
It's going to be "GNU/Hewlett Paquard"!
[/drumroll]
-- Josh Turiel
"2. Do not eat iPod Shuffle."
Compaq management fucked up with the purchases of Tandem and Digital. Totally wasted billion dollar investments. Very sad.
HP made this investment for Digital and Tandem technology, and Compaq's sales and marketing. HP always had stronger datacenter service than Compaq-proper.
Compaq itself is only an interesting brand name and marketing channel. There's no way that HP keep the existing Compaq PC line going. The only advantage of HP buying Compaq is that HP now has one less competitor.
http://archives.nytimes.com/2001/09/04/business/04 DEAL.html
Yeah, I know, Taco won't change'em so NYT won't bust his chops, but they're gonna bust us all bigtime if we keep swiping their articles straight up... Just right-click, copy link location, paste into new window, make the appropriate edit, and fsck'em. After all, it's not like you were gonna feed'em real marketing data anyway.... right?
--
You need a Linux guru.
Direct link to the article is here.
(due to lameness filter I must insert something here. Stupid lameness filter)
Complett-Packpaq!
Aren't most of these machines and their parts assembled in East Asia anyway? So, what difference does it really make what US label is put on them? What value do Compaq and HP actually add to these products, other than a brand name?
- OpenVMS on PA-RISC (not too scary, but... ewww), now that the Alpha is gone?
- HP-UX on Alpha, just to help Intel rape the last bit of dignity out of the platform?
- A resurgance of NT/MIPS with the new "Kayak Himalaya" workstations (dumb, but this is Compaq and HP we're talking about here)?
- PA-RISC in a new line of "Nonstop Himalaya" server (again, dumb, but is MIPS over Alpha was stupid, too)?
and, the scariest, and most-probable....- An HP-made server, with that <sarcasm>wonderful</sarcasm> HP support, running HP-UX (blech) on IA64 (cringe), using Compaq's horribly nonstandard system components and chassis, with HP's horribly nonstandard (and flaky) RAID system.
I just hope HP sells of the stuff they make that doesn't suck (calculators, printers, and medical/testing equipment) before they make something really stupid and tank. Or, maybe we'll just luck-out and simply continue to make the same crappy PCs--all under one roof. I think I need some liquid recovery now.Pining for the days when The Glorious MEEPT!!! graced SlapDash with his wisdom.
Boy, now there's a winning strategy. Two companies bleeding red ink out their corporate asses decide to merge with stock swaps (no hard assets, no strategy, no intelligence exchanged or used.)
This is a deal to stir up stock prices and bugger all else.
So what'll happen?
Tata Alpha...
Compaq's clients will get irritated by the loss of corporate focus.
HP's clients (who are HP's clients?) will do the same.
The stock market, still reeling from the trillion dollar loss of Y2K will get irritated at the sheer pointless attempt to maniputate stock prices in some direction other than the death spiral they have been in.
Great. Another lose-lose situation.
MSBPodcast.com The opinions expressed here are my own. If you don't like 'em... Think up your own stuff.
Amazing isn't it how one poor decision leads to an avalanche of further massive expenditures, good money following bad? HP decided it didn't want to spend the resources on the next generation of PA-RISC, so it decided to partner with Intel on Itanium. Unfortunately this was in time to concede huge markets to Sun, a company that has chosen to go against Wintel in both hardware and software. So HP missed out on the boom. And now it's trying to make up ground in the downturn. Look near the bottom of this article from Forbes. Since 1994! HP has been caught in a trap where it is perceived that its flagship processor will be phased out. Under those circumstances it is impossible to grow that part of the Unix business. So HP has been caught trying to sell "NT workstations", expanding into selling consumer PCs, anything to generate the slightest bit of revenue.
Meanwhile Sun and IBM went on developing their next generation 64 bit processors. After the downturn ends, and it will end, who are going to be in a better position, companies who sell their own chips or companies that are fighting to be Intel resellers? What exactly will be the barrier to one's competitors also becoming Intel resellers if that is right?
What no one seems to want to acknowledge is that if Dell continues to hold the lead in efficiency, there really is no reason for any other major player to be in the commodity Intel PC business. It doesn't matter if you're twice, three times, whatever Dell's size. If Dell is more efficient, if Dell can make money and expand even in a downturn, it's only a matter of time. And Dell can use its current strong position to keep moving up into higher revenue markets.
The combined HP/Compaq will not be able to cut a better deal from Intel than Dell can because Dell has always been an Intel-only shop, the most loyal one. Dell's competition in laptops is Sony not from anything HP/Compaq does. The only area HP/Compaq has an edge is in PDAs.
Let's think--who will survive selling PCs in five years and why. Dell wins because they are the most efficient. Sony wins because they can bundle multimedia goodies and sell at a premium, plus if PCs are getting to be more like commodities, Sony has the edge in consumer electronic design. Apple stays alive by staying off Intel and also exploiting its reputation in education and multimedia. (Although in education it is once again Dell that is the main competitor, not HP or Compaq.)
What's especially absurd is that neither HP nor Compaq can exploit what makes Dell so efficient because they can't solve the problem of how to sell directly without alienating the middlemen distributors. This problem is impossible to solve with the companies' present business model.
The prospect of trying to combine a corporation whose roots are in the Bay Area of California with one whose roots are in Texas--how come no one questions these catastrophic mis-marriages of disparate corporate culture? Houston, Texas and Palo Alto, California?! What a joke.
HP has always made good stuff. I can't say the same thing about Compaq although the iPaq is pretty good. This could be good for HP. At least maybe they can work towards a good iPaq replacement! The Jornada's screen sucks! Looks like the new HP handheld will be a good one! Wonder what Bruce Perens thinks of this move!
Gorkman
Watch for their new handheld computer, the HPaq...seems like a step backwards, but it ain't! :)
My journal has hot
I work for Compaq... boy, I bet it's gonna be weird at work tomorrow...
I agree. It seems like HP is going to become the Computer Associates on the hardware side, and just buy up all of these failing companies with proprietary projects, and milk them to the death. Merging two companies of this tremendous size seems a recipe for disaster.
Is this going to replace the current tagline, HP - Invent?
Consider the size of these companies. Buying a competitor is just the first step. Truly merging on an operations level will probably take serveral years. Durring that time, I wouldn't be suprised if the new (merged) company reposts losses over at lease several quarters, although in the long run, I'd say this merger is probably a good thing for investors in both companies.
--CTH
--Got Lists? | Top 95 Star Wars Line
I think the only real interesting 'battle' is Unix. Both PA-RISC and Alpha are already dead (in favor of Itanium), and the others are just boring PC brands.
The other interesting thing is VMS and Tandem. These are going to be ported to Itanium, as was announced a couple of months ago, but how exactly will they fit into HP's overall strategy?
What does HP want from Compaq? In the past few weeks they were talking about exiting the PC business. Will the consolidated company be a PC powerhouse or a server powerhouse, or both?
How 'bout they call it CompaqHP or something stupid like that and let the part of HP that makes test gear (the kind of stuff they started with right after WWII) be Hewlett-Packard again.
I see even classic Slashdot is now pretty much unusable on dial up anymore.
If this goes through watch Dell brag about moving from the number 4 spot to the number 3 spot and give the people at the very top big bonuses.
I see even classic Slashdot is now pretty much unusable on dial up anymore.
While I am sure many of you have only thought about the "technological" ramifications this brings, let me shead some light on what it means to work at one of these companies. After last weeks layoffs, this is really bad news to HP. While I think Compaq does an execellent job with their engineering, their view on treating workers as "resources" may affect "The HP Way." HP "was" known for their treatment of employees, their ability to hedge back times, and for promoting team work instead of individualism. With Compaq being brought in, I think HP's directors and managers could become tainted by Compaq's tendency to layoff workers when profits look bad. HP and compaq have very different mindsets, and this merge(/buyout) only means that this new company will be a compromise of the two. HP used to do everything within its power to keep a "work force reduction" from happening. I was throughly conviced that last weeks layoffs were an adjustment due to changing times, but now bringing compaq in cements the fact that layoffs (or work force reductions as their PR department likes to put it) will become a cyclical thing. Also these different mindset will cause bad decisions to only explode. If they plan on succedding, they will need to adopt a single culture (and not a hybrid of the two.) Otherwise only bickering and redtape will result. Another reason this is a bad idea is the effect it will have on its effect of swiftness. There is burecarcy (sp) all over both. The new company will even be slower. This is not the time to slow down a tech company. I can see how easly its going to be in the future when it comes to implementing new solutions/products And yes there is overhead. Major overhead. Carlies biggest reason for buying compaq would be to add to HP's services group. (Which happened to be the reason why Compaq bought Digital. Honestly, it wasn't for their UNIX business or alpha processors.) There will be several labs in both HP and compaq that will start to sweat over how will stay and how will be re-orged. The next few monthes are not going to be a good time for HP and/or Compaq. I'm hoping things work out. Otherwise Carly could be HP's Rick Bullizo.
Compaq already comprises 2/3 of our LARGE scale support. non-stop Tandem Kernal, PC level, VMS, and now they get into bed with HP.
errr....umm...*whooosh* *whoosh* Is this thing on ?
From the third paragraph of the NY times article:
"the acquisition amounts to a renewed bet on the computer business and particularly a new operating system for computer servers that was developed by Intel and Hewlett-Packard."
Are they really talking about the Itanium CPU or did I miss a big announcment?
Chris
Considering that the iPAQ is the only halfway-decent PocketPC to date, this has major implications for the PDA world. Especially since the iPAQ is also used by the most successful Linux-on-PocketPC distribution to date, MicroWindows....
--GrouchoMarx
Card-carrying member of the EFF, FSF, and ACLU. Are you?
Hmmm.. it seems as if this merger is not only to knock out operational expenses, if not also another competitor in three arenas. HP was losing to Compaq in the PC segment, and also the intel standard servers. Both Compaq and HP have had a hard time getting a real large install base for thier UNIX line. Compaq just licensed out the Alpha processor technology to Intel. So which OS will be the first to drop? HPUX or Tru64 and OpenVMS?
I would place my bet on HPUX. HP has too much 32-bit baggage to carry over into the new Itanium UNIX standard (even though IBM will not be joining that party) and Tru64 has no 32-bit baggage to carry over since it was 64-bit to begin with. Tru64 (or the AlphaServers for that matter) were finally being accepted in the market as powerful and versatile alternative to AIX/HPUX/Solaris. I would personally want to see Tru64 go on, but we'll see.
Cheers,
Justarius
- There are some that call me . . . . . . Tim.
I am the Spirit within The Machine.
If you could marry Taco's brains with Bill Gates' good looks.
Or did I get that backwards?
That UNIX was dead, they wern't going to do much more with HP/UX, and instead go with NT?
The losers: Alpha (duh) and VMS.
Ipaq's are a different form factor than the other HP products, so they may survive beyond the merger.
Who can stop this: The government (I doubt) and the stock market. If the market thinks this is two failing companies combining, hey will drop both stock prices.
Either way, Tue will be interesting tay for tech writers.
If it was said on slashdot, it MUST be true!
When mergers like this occur during the wonderful times of "irrational exuberence", the resulting behemoth has to pay down an asset called "Goodwill". This is what they (over)paid beyond asset value for the company that they euphorically, and often stupidly, bought.
In the case of the huge AOL/Time-Warner merger, note that their balance sheet still has a $126,618,000,000 asset called "Goodwill and other intangible assets" recorded in June, 2001. This asset may look impressive on first scan, but the fact is that AOL has to pay this down over many years according to, I believe, requirements of accounting standards (GAAP).
Many smaller companies have serious "indigestion" from this effect and sometimes have sudden "charges" of billions to pay for previous lapses of good business judgement in the past. And wouldn't it suck if the stock price of the merged, over-stuffed company rapidly plummeted? I know that there are folks reading this who personally know what I am talking about.
In the merger between HP and Compaq, for obvious reasons the resulting "Goodwill" asset will be beneficially minimized. Correct me if I am wrong, but it looks as if the new HP is paying $25.0B for $23.9B of Compaq assets. This is going to create a behemoth all right, but one with out a food coma.
If HP and Compaq really want to get together then the conditions at present are optimal (unless they want a really big-ass number on their balance sheet for ten years).
It fell flat on it's ass for trying to take on the industry. They had an open source prodcut (ISA), saw what they COULD have made had it been close sourced, created something new (MCA) and closed sourced it.
Hence the formation of EISA and the collapse of MCA. Open Sourcing (so to speek) MCA resulted in PCI (not completely, but a good chunk of the PCI spec is MCA type stuff)
As a rock-in-roll Physicist once said, No matter where you go, there you are.
MS Visual Fortran 4 begets
Digital Visual Fortran 5 begets
Compaq Visual Fortran 6 begets
HP Visual Fortran 7?
"Open the pod by doors, Hal" > "I'm afraid I can't do that, Dave" sudo "Open the pod bay doors, Hal" > alright
I'm stunned. I'll admit, I was betting HP or Gateway would fold out of the business some time this year due to plunging market share. Out of the Business = stop making Intel based computers.
I did not expect HP to go out and buy Compaq.
But is this a good thing? HP has never been a player in the corporate desktop world to the extent of the other vendors. So I see the desktop line dropping away. Being in the Intel server business I can safely say that at least in the KS/MO areas HP is not a competitor either. So there goes the Intel Server line from HP.
But, HP is a R&D company. HP has big pockets from other divisions. HP has a service arm that can execute better than Compaq's (even after aquring Digital, I'd say Compaq Destroyed Digital in their blundering of that purchase) and hasn't had a decent service arm (at least in KS/MO/OK/AR region) ever (for Intel Servers).
Should be interesting. A merger of this size should take a good 12 - 18 months, so the fallout will be a while. Wonder what the heck they're going to do. Dell is still destroying the market into a commodity driven vs. quality driven, especially in the server market.
Please ad grains of salt to the last one, I don't like Dell. I'm sure many people do, I don't.
As a rock-in-roll Physicist once said, No matter where you go, there you are.
look at the official press release
But wait, if there is going to be connectivity everywhere, why the heck bother paying a continuing lease to store ones personal data on someone else's server, when it can simply be stored on one's own?
.net. If it's true that consumers will want somebody to manage their desktop software for them (and I'm not convinced that they will, but it's plausible that at least some will) then those consumers will probably want someone to run the application server for them so that they don't have to maintain it.
.net if and when it ships. But for those consumers who choose to use .net, I would think they'd be willing to shell out significant money to have someone else run the application servers. This isn't stupidity on their part-- it's just that most consumers have neither the time, nor the expertise, nor the interest to run their own servers.
Um, backups? Uptime and reliability? Economies of scale? Security? Lack of technical expertise on the part of consumers?
Look, in theory anyone with a DSL connection can run his own web server, mail server, etc. Yet, most don't. Why? Because that's what we pay ISP's to do--maintain fast, reliable, secure, servers that give us the services we want without us having to do the work of changing backup tapes, patching the OS when security holes are found, wearing a pager 24/7 to ensure good uptime, etc. Running a stable, secure, reliable server is a lot of work, and it makes sense to pay someone else to do it.
So it is with
I personally like having my software locally, and I don't want Microsoft or anyone else changing it without telling me. But then, I'm typing this on a Mac, so I don't have to deal with MS crap as it is. I have no plans to use
I seem to recall that Tandem did bail Compaq out with a loan though. Flash forward several years to an ousting of the founding CEO, and Tandem being prepped for sale by the new one. Bought by Compaq, who totally destroyed the sales organization (and strangely enough most of Tandem's sale too). Soon after that, they bought DEC, and destroyed it's sales organization in almost the exact same way (takes talent!).
As a Tandem employee at the time of the merger, I found Compaq to not really be a "new wave" company. They talked the talk of employee empowerment, but were more like GE or a telco (aside: Scott Adams of Dilbert fame worked for Pacific Bell), than a typical Silicon Valley company following the true "HP" way. The Compaq CEO and bureaucracy were not used to having a middle class (engineers and professionals); and tried to treat all it's employees as a factory worker or an executive. We were not treated as executives, except for international travel!
The new insider Compaq CEO, after the destroying CEO was ousted, provided some peace in the lands that were formerly Tandem, sounding similar to a manager that valued it's employees. Alas there was still much turmoil, and I parted company to the relative stability of a start-up. I wish my former comrades well. I envision their times might be easier, for I judge HP way is more powerful than the Compaq way; if there is any way left!
New , EV-PARisc technology from HPaq!
The scariest thing about this merger is the totally inept Carly F. gets to run the joint. She has never typed ps -elaf or ps -auxww in her life yet she runs the 2nd larget computer company?
Scary.
FYI, Carly majored in Medieval history at Stanford. At least Gates and Allen can brag about actually having known something about computers at some point, albeit Altairs. Not that being the only non-Unix vendor left is a good isea.
- Z
Legalize the constitution. Think for yourself question authority.
If the merger happened in a bull market, you might have seen a rally. However, I think the Wall street might punish this deal. If you intend on getting into HP/Compaq bigtime, you are probably better off waiting a bit. Just my $.02.
-- Another senseless waste of fine bytes.
Consider the size of these companies. Buying a competitor is just the first step. Truly merging on an operations level will probably take serveral years.
Yay. ANOTHER big corporate merger.
Call me paranoid, but IMO this is just getting ridiculous. I lost all faith in the government's enforcement of the concept of anti-trust when they let AOL and Time Warner merge. Of course, (HP + Compaq) < (AOL + TW), but come on...
How many huge corporate mergers are we going to have? Soon we're just going to have one giant corporation controlling everything. My video card's boot message ("3Dfx Interactive Inc.* \ A subsidiary of the AOL-Time Warner-Microsoft-Intel-ABC-NBC-CBS Corporation") will be true one of these days, at the rate we're going.
Notice the words "buying a competitor" in hillct's post. On a smaller scale, such as at the local-local level, this isn't such a big deal. But when you take two large corps that are competing against one another (plus only a couple others) for business nationwide, and let one buy the other, that's one less choice for the consumer. It's also one (much) larger corp that, due to its size, has to spend that much less time worrying about its competition. In the end, the consumer loses.
* Now owned by nVidia. Granted, 3Dfx was having tough times financially, but still...
I pledge allegiance to the flag...
of the Corporate States of America...
Compaq for $25B? Actually, the purchase of Atari for $2M makes a whole lot more sense if you think about it. Hopefully it'll make SegFault soon. ;)
There's lots of reasons this could be REALLY bad, but there is a snowballs chance in hell that it could work.
On the higer-end (PC-servers and up), this may bode quite well...
HP has always had great technology, but has generally lacked the capability to take the tech they came up with and get it into a good product (certain printer lines being an exception).
Compaq, OTOH, has never been much of a technology developer, preferring to buy other companies that have already done the lions share of the R&D. Compaq has been able to take that tech and turn it into (generally) good products.
On the desktop end, it doesn't really matter that much, though hopefully the Proliant's stick around instead of the HP line for the higher end desktops. The low-end consumer stuff is screwed no matter which way they cut it.
As for the rest of it, there is a huge amount of overlap in the product lines. That's obviously bad for Alpha, which kinda sucks, but kinda doesn't. The overlap is also going to mean some killer layoffs at some point down the road. Hopefully the *nix pieces get combined in some manner, instead of just cutting one side of it. On second thought, maybe they can finally take the opportunity to put HP-UX out of it's (and our) misery. I'd like to see their Linux efforts continue for sure. I'm not at all familiar with Tru-64.
Who knows, it's possible that this will be good for the tech industry. It certainly could be, and I, for one, hope it will be.
Was thinking about the ramifications of this merger, and thought I'd look for some server market share statistics ( http://serverwatch.internet.com/news/2001_08_02_a. html ).
You have Compaq, Dell, IBM, HP, Sun, and the "Others" category.
Now we shall have Dell, IBM, HP, Sun, and "Others".
This stat is entitled "Preliminary Worldwide Server Unit Shipment Estimates for 2Q01", and both HP and Compaq lost market share. Looking at market share off of this chart, HP would then have 37.3% of Server Units shipped (estimate). That alone makes HP all of the sudden the #1 company with servers shipped for Q'2 2001. Impressive...
Also note that the stats I am referring to are for the worldwide market.
Of course, I'll stick with my commodity Dell servers, and (if need be) Sun/IBM Unix servers.
The woman is damned smart. Personally, I would have to rank her as the most intelligent, dedicated, and insightful executive in Silicon Valley. A merger of this size will take many long nights, over many years, to fully become a reality. And I think Carly Fiorina has the dedication, knowledge, and experience to do it.
Think about it. She did wonders at Lucent.
I think what is most important, what differentiates her from the other executives in the industry, is what she knows about this industry.
"Virtually all meaningful advancements in business, society, and life are not achieved through the boldy acts of a few, but the everyday acts of many."
Cut through the marketing fluff of that quote she made last year. And you see that she really does have a clue of what runs a company. What runs the whole industry. Truly, what has, and always will run this world.
Her degree is, if I remember correctly, not in information technology or business... But actually in medieval studies. What do we learn by studying history? The mistakes people have made, and hopefully we learn to not make them again.
She's a smart business person. She sees the mistakes Compaq has made with Digital and Tandem. She knows to not make those same mistakes again. And she knows that her job depends on not making any mistakes. The hp Board is patient, but they're not going to sit around for a decade, while she's pushing her sixties still trying to get hp back on track. Carly has a year at the most to prove that she can head this megaconglomerate. She knows how to streamline (see latest quarterly report).
If she can pull this off, I would have to credit her as the most successful executive in history. If not, she can move on over to Nevada and take up stripping.
Which do you think she's planning on, and working towards?
jrbd
http://news.cnet.com/news/0-1003-201-4500953-0.htm l
Analyst predicts PC vendors must consolidate or die
By Larry Barrett
Staff Writer, CNET News.com
January 16, 2001, 6:10 p.m. PT
Bear Stearns PC analyst Andrew Neff after the bell Tuesday fired off what he called a "manifesto," recommending massive and immediate consolidation of the major U.S. PC vendors. Some of his contemporaries strongly disagreed.
After watching profit warning after profit warning from major PC makers in recent weeks, Neff said the industry is at a "critical stage." The PC sector will unravel because of overcapacity, a problem that has plagued other industries. PC stocks will continue to erode unless companies take "concrete steps towards consolidation."
Among Neff's suggestions:
Compaq should sell out to HP.
Hey, this is great. Maybe HP will take a meaningless drop tomorrow. You can buy it, and then cash out when it rises back to its normal level after all the idiots realize it's not HWP. HP, unlike HWP, is not a bad stock to own. P/E 10. Crappy dividend though.
For all intensive purposes, "whom" is no longer a word. That begs the question, "who cares"?
This is probably the only logical merger if any in this industry.
As for Agilent, it would probably not look too good for them if they've put in the time to get people to associate them with HP test gear, only to throw all that away and go back to being HP. Besides, in the general public's mind, HP is probably associated more with computers, printers, and related items than with test equipment. (What are the odds that Joe Schmuck AOLer, whose VCR still blinks 12:00, would even know what an oscilloscope is?)
20 January 2017: the End of an Error.
The only thing better about the current iPaq vs. the current Jornada is the CPU-- the SA 206mhz vs. the jornada's SH3 133mhz. But, the new Jornada series (the 560 i think) uses the same SA cpu as the iPaq, has the game/touch/round/whatever pad thing that the iPaq has, and has a much better screen. I haven't heard much on the upcoming iPaqs, but I would bet they are discontinued at some point. The Jornada has a much better corporate appeal to it (more refined, more business-oriented), so maybe the iPaq will stay around as something geared at the consumer market. But with the Jornada's performance on par or ahead of the iPaq, I wouldn't be surprised to see the iPaq get canned altogether.
Perl - $Just @when->$you ${thought} s/yn/tax/ &couldn\'t %get $worse;
The current lines, you're right. The current iPaq has a faster CPU and a slightly better screen than the Jornada. But the Jornada is much more refined and much more business-oriented. And beyond that, the new Jornada 560 series coming out this year has the same CPU and a better screen than the iPaq, as well as the navigation pad thing that the iPaq has. I'd bet that if either is canned altogether, its the iPaq.
Perl - $Just @when->$you ${thought} s/yn/tax/ &couldn\'t %get $worse;
-- The short version Compaq + HP + Intel + Linux = Good for them, bad for AMD, Microsoft, Dell, and Sun.
Here we have the "merger" of two huge UNIX vendors whose UNIX stuff had begun floundering over the last few years. On one hand we have Compaq. Compaq has flirted with Linux here and there, but has never jumped onto the Linux bandwagon for fear of reprisals from Microsoft, which could do a good deal of damage to Compaq's desktop lines, once the highest sellers in the industry.
On the other hand we have HP. HP has been jumping all over Linux in the past two years, openly working with intel and SuSE on IA-64 Linux. HP has not been relevant in the desktop world for some time, and their NT based servers went nowhere. Faced with a company working on multiple system architectures with two aging UNIXes, both of which are losing market share to NT/2K/Solaris at an alarming rate. On top of that HP's RISC processors are also losing steam, and Compaq's failed takeover of Digital makes it unlikely that anyone will be picking up on Alpha any time soon, especially given that the good Alpha engineers are now at AMD. What is HP to do? Seems to me that HP is likely to jump in on the Intel/IBM/SuSE dealings (If HP is not already a player in that arena, which aI suspect it is.) and move the new company to Linux on IA-64 in the datacenter, and Pentium IV powered desktops running XP. It would also not surprise me to see HP and Compaq shed their worst desktop engineers that led them down the losing path, and have the remaining good ones build high-end LInux powered workstations for the Linux loving folks in Hollywood, a market currently owned by SGI, and one that Dell managed to fail in.
The downside to all this is that the new HP will likely shed AMD, which Compaq has been pushing for a while. By moving to IA-64 HP will have a fighting chance against the powerful Dell/Intel/Microsoft combo that is pushing its way into any market it can. If IA-64 on Linux can start scaling well withing the next two years, HP will also have a chance to start gunning for Sun, who is perceived by many as behind in the processor market due to their "slow" megahertz speeds, not to mention unhappiness with Sun's high prices.
Of course, given that HP's CEO is a former Lucent exec (They grabbed her in 1999.), I think there is just as much of a chance that this whole thing will turn into a huge fucking mess, with money thrown at all the wrong things. It really would not surprise me if HP is reduced to producing garbage desktops that make Compaq machines look good, and even more crappy $100 inkjet printers that drain $30 ink cartridges every few pages.
Hmm, I wonder what is going to happen for development between the Jornada and the iPAQ? Maybe the could force Compaq to get the damn device to have more than one input at a time!
This is like a Beowulf cluster of companies...
Sit back and relax as Windows 98 installs on your computer.
Corporate consolidation almost always accompanies industrywide slowdown. That behavior is as predictable as the rising and setting of the sun. Look at it this way - most of the brass will get to keep their jobs; some will get promoted, some demoted, but very few fired. Workers, on the other hand, are gonna get pink slipped because suddenly their services are "duplicated." The market just can't accomodate as many tech-behemoths as it could 2 years ago, so the logical thing to do is merge.
I think there is a world market for maybe five personal web logs.
check out Compaqs Release http://www.compaq.com/newsroom/pr/2001/pr200109040 2.html
h tm
and HP's http://www.hp.com/hpinfo/newsroom/press/04sep01a.
Pretty Tired but i think they are the same article... they already are merging hmmm.
Another note one the main HP page there is a big pic of Tux and a Sentance HP Linux Evangalists... something or another
"All I can tell the "lesser of two evils" folks is that if they keep voting for evil, they'll keep getting evil."-Lp.org
Yes, she is smart. But every HP product I've installed recently has given me error messages. Some of the problems have been so bad that even HP tech support could not solve them. For example, an HP network printer assumed that a network had a server, instead of being peer-to-peer. The problem was unsolvable.
I see no evidence that Carly is better than Lew Platt. Maybe there is such evidence, but I don't see it.
There is always a lot of hype around executives of large companies. The truth is often very different.
Bush's education improvements were
For how long?
On Aug. 22, Standard & Poor's cut its rating on Gateway Inc...
Gateway will close all of its company-owned operations in Malaysia, Singapore, Japan, Australia and New Zealand...
The company said it will unveil its final decision on its possible withdrawal from the European market in the next 30 days.
It is closing its Salt Lake City manufacturing plant and consolidating its domestic call centers, shuttering call centers in Hampton, Va.; Vermillion, S.D.; Salt Lake City; and Lake Forest, Calif.
Their stock hit an 5-year low a couple of days ago. Their credit rating is "junk bond" BBB-.
In mid-August the closed about 10 of their "Gateway Country Stores" and put on hold plans for expansion.
Other news articles entitled "Gateway makes plans to leave Britain/Ireland" and the like abound.
Their sales were in the toilet last quarter.
(They should have never bought Amiga. That curse is worse than any Pharoah's!)
Learning HOW to think is more important than learning WHAT to think.
Hmm. Last I knew Compaq has increased production on the iPaq quite a bit, and the shortages still exist in the retail chains. Why? So many businesses are buying thousands of iPaqs.
Personally I believe the iPaq will stick around as the PDA from the new company, while the Jornada stays around as the clamshell palmtop computer.
Now Carly is going to take two companies, each weakened by current economic conditions, and combine them. Where exactly is the synergy?
When two company's with the same product combine, they often can make more money than if they were seperate. A combined HP/Compaq can cut the sales dept, IT overhead and many other redundant corporate systems but maintain the same volume of sales. Instead of competing with each other for a sale, they now are partners. Now that the x86 market is saturated, it is obvious that there are "too many fish in the pond" and it makes sense for PC makers to want to merge. When a product has small profit margins, a company has to copensate the margin with selling in higher volume.
I miss the Karma Whores.
Despite not being as overwhelmingly monopolistic as they were in the 1980s, this shows just how huge IBM still is - the number 2 computer company, HP, buys the number 3 computer company, and becomes...still number 2. Still can't pass IBM, even combined.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
In a stunning move, stunning because of the lack of a sense of history, HP simply repeats the same blunder it made when it purchased Apollo to temporarily become the "Number One Seller of Workstations". Only this is on a larger scale.
Absolutely. I used to work for HP back in 1989 when they made said aquisition. Within the hallowed halls, there was much rejoicing. Everyone was told, hey, now HP will make better workstations using Apollo technology! Didn't happen. Instead, all the Apollo techs left in disgust, and Apollos were killed dead. (I'm not entirely sure of the order in which that happened, though!) (-8
Prediction: Massive layoffs at Compaq, destruction of Compaq computers, little assimilation of technology, little merging of the workforce. They may actually delude themselves that they will make use of Compaq resources, but company mergers never work. One company always swallows the other, corporate politics and survival-of-the-fittest reign.
From what some people have been saying, HP's corporate culture is still better than Compaq's, so that's one hopeful thing -- if HP is the winner in the silent battle.
Unfortunately, when one's job is on the line, nobody is going to be objective in evaluating whether Project A or Project B is the better one -- even if Project B is obviously miles better than Project A, if some middle manager loses power if things go with Project B, they are going to push Project A for all its worth(less). Human nature.
Now imagine that happening multiplied by thousands, for the thousands of employees who are going to be laid off by this merger. Don't expect sensible decisions.
In case you're wondering how I left HP... our section was "downsized" because Head Office wanted to get out of Applications Software... But it was a nice place to work while I was there, and they tested things to death. Quality control, you betcha.
So, despite all my doom and gloom, I don't think HP will die. Just don't expect anything wonderful out of this merger.
-=- Say it with flowers. Send a Triffid. -=-
Kindly do a Google search on terms such as "Itanium PA-RISC binary compatibility" and/or "HP-UX". The entire point from HP's perspective of working with Intel was/is to guarantee that the Itanium would have binary compatibility with PA-RISC and HP-UX. Any hint of incompatibility, any hint of the alliance breaking, and HP would cease to exist in five years. The company could not survive if it could not guarantee an indefinite upgrade path for its existing customer base. Itanium has been part of that promised path for over five years now.
I have similar doubts about HP being able to keep many of its major customers if it tried to sell them on converting the entire product line over to Linux regardless of how many capabilities Linux acquires. Mandating switching to Linux from HP-UX to "save costs" would be of benefit only to HP not to the customers. Alienating major customers for reasons internal to one's company seems to me one of the fastest ways to run one's company into the ground.
When Compaq swallowed Digital, I felt weird. You see, I started my career on Vaxen in the 1980s, Having a PC company buy the former #2 computer maker seemed strange. For me, it was as strong an indication of how the world had changed as anything that happened in the 1990's. I know it's irrational, but having HP take over somehow seems more fitting. After all, DEC and HP battled it out with Sun and IBM for the Unix market. DEC lost that battle big time, which was a big contributer to its eventual demise. It's funny, I haven't used VMS in over ten years. I'm completely coverted to Unix and Windows. but I still hold on to these ideas I formed at the beginning of my career. Neither Compaq or HP are the same companies they were in the late 80's.
Enough rambling. I wish them luck.
"Even if you are on the right track, you'll get run over if you just sit there" - Will Rogers
About two weeks before the closure was announced, they were flogging 21" monitors for $899 AUD (that's 450 USD). Wish I had have got in at the fire sale price :)
Any sufficiently advanced technology is indistinguishable from a rigged demo
--Andy Finkel (J. Klass?)
Today software, media, entertainment giant Micro-TimeWarner-AOL-Soft came to an agreement with the US justice department regarding a controversial licensing practice that they and their partner, pharmaceutical and computer hardare juggernaut, Pfizer-Hewlett Compaqard Dell had been requiring users to agree to. AOL Windows 2050 will now be available to customers who wish to pay cash money instead of exchanging whole organs, human embryos or brain tissue to obtain a license.
Bill Gates has been quoted as saying "It was unfortunate that we were forced by the government to stop innovating new ways to increase our power, er,,, our product's quality. This measure is temporary, when the our current crop of congressmen are knocking on death's door, I'm sure that our stem cell research will provide us with a few bargaining chips to get laws passed that we agree with."
"Hi. This is my friend, Jack Shit, and you don't know him." - Lord Kano
From the corporate press release:
The transaction is expected to be substantially accretive to HP's pro forma earnings per share in the first full year of combined operations based on achieving planned cost synergies. Cost synergies of approximately $2.0 billion are expected in fiscal 2003, the first full year of combined operations. Fully realized synergies are expected to reach a run rate of aproximately $2.5 billion by mid-fiscal 2004.
Translation:
We're going to start, even before we merge, by getting rid of redundant departments. Expect marketing, legal, human resources, and the usual suspects to be significantly reduced before the merger on one side of the house (can you guess which side is most likely?), and then to be completely shut down afterwards. Reducing the headcount is going to save us a lot of money.
Oh! Did I forget about the Compaq executives who won't play ball that we'll shove out the airlock? Getting rid of those troublemakers will save us some money in the process, thank goodness.
As well, we're going to squeeze some of our vendors just a little bit more to get some deeper discounts off of list price. "We'll give you more volume for a bigger discount. Otherwise, we'll drop you like a rock" is what we'll tell them. That'll give us a bit more money.
And we'll be comparing similar manufacturing plants, engineering departments, etc within the combined company. We'll be pretty fair about this and not just pick everything on the HP side. The most expensive producers will be eliminated. The best cost performers will be rewarded.
We're going to lose some customers and some revenue in the process. Our level of support is going to drop as we lose disenfranchised employees and shift the responsibilities of some of our groups with little or no training. Training really costs too much to invest in. And we're going to have a slight dip in revenue when we dump our unprofitable products. But that is to be expected. We're really riding on the cost savings to make up for it.
It really is too bad we don't have a great deal of time to sort this all out. We're going to be really busy for some time sorting this all out and trying to find the new HP. Hopefully, we won't lose site of ourselves, the market, and the customer (oops! consumer!) and let things slip.
There are a number of things we really haven't thought through, like what we're going to do with our midrange products. Hopefully a middle manager somewhere will come up with a good idea. But we'll probably have to depend on the usual sources -- those industry pundants in the trade rags. After all, they're the ones that gave us the idea of the merger in the first place! They really have their finger on the pulse of our company.
Wow. This is going to be all figured out by the end of 2004. That's not a lot of time! I wonder how things are going to turn out?
I spent a year there (my contract at HP expires in three days), and I've seen the environment.
I'm kind of optimistic about the deal from the companies' point of view. First of all, who is going to suffer:
1) Competing printer makers. For now Compaq was rebranding Lexmark printers, so they are screwed.
2) OpenVMS and HP3000 users. HP is trying to get rid of all old platforms (like HP3000). OpenVMS will probably be put on life support (it was doomed after Compaq could not produce Alphas anyway).
3) Digital UNIX users. I think HP will try to move them to much more widespread HP-UX (many of the vendor packages are released for Solaris and Linux first, HP-UX second, and AIX third. TRU64X and Irix are distant fourth, and many don't even port there). I'd guess that they might even release an emulator of the system calls to just recompile programs on HP-UX scaling down Alpha products.
4) Stratus Computers (www.stratus.com). This competitor of Tandem uses HP processors and OS now, and they are going to get a competition from HP.
5) Employees.
Do you know that these corporate behemoths do not build their stuff? I've recently seen an inside auction where the last HP inkjet made in the US by HP was auctioned. All of the printers and PCs are now built by subcontractors (such as OMNI, Solectron, et al). Consolidation of the products will allow to reduce the design, development and testing staff. Also reduced will be support (eventually, after consolidating the products).
OTOH, the deal will help HP get through the hard time of the market slowdown by sharply increasing their inkjet's market share (using Compaq's strength in retail). Expect Lexmark's shares to fall.
Second, it will give them the reliable computing in Tandem. I don't know if Tandem computers were shifted from MIPS to Alpha, but the next generation of them will definitely use McKinley processors because their customers value reliability over speed and cost, and any processor will suffice.
Third, integration will give them GOOD REASON to discontinue older product lines at both Compaq and HP. These are decisions that usually involve a lot of power struggle, but the merger puts a "force major" mode on.
Conclusion: HP is buying itself a market share and sales channel for its PCs, PC servers and printers plus economics of scales. Also it buys itself a chance to do a full scale reorganization.
Finally, HP did not fire CEO. The fucker's name is Rick Beluzzo (doesn't it sound familiar?), and CEO's name was Lew Platt who peacefully retired. Beluzzo was the one pushing M$ into all holes. Later he went to head SGI (hence THEIR NT boxen), and now works where he belongs - in BillG's brothel.
Tigers respect lions, elephants and hippos. Maggots respect no one. (C) S. Dovlatov
It doesn't sound like Linux ... or it is ???
Ciao
----
FB
Not that I really care, I think Lexmarks are crap compared to my HP anyways, but it is a potential point for minor fallout between IBM and HP.
Want to read a great comment about Compaq and HP? See the comment by denshi below.
This comment makes sense to me. It fits with my understanding. HP and Compaq are confused.
Didn't Carly Fiorino leave Lucent in a bad state? Maybe buying Compaq is just an expression of a need for domination, and not something that is good for the company.
Bush's education improvements were
This turbulence in the computer market is making it very difficult to know what companies you can trust, what companies you can't trust, and what kind of computer you really need. Custom-building is an option that becomes more and more attractive with each passing day: by buying the components you really need and skipping the ones you don't, you can get a faster, more reliable computer for mess less than you'd pay for a pre-build PC, and you'll learn something doing it.
Although PC building has previously been the sole domain of propellerhead geeks, the controversial news and discussion site Adequacy.Org has recently posted an article demystifying the process and explaining the art of PC building in simple, easy-to-understand terms. It'll explain to you the full process of building your very own PC that you can truly call "your own" without drowning you in technical details. I found it very useful when custom-building my PC.
And you'll get something better. Compaq and HP are in direct competition to each other. They both sell quite a lot of desktops and laptops and servers. Rather than looking at synergy, you should look at bottom line.
They can fire a bunch of (now) extraneous people, pushing more units per employee. I mean, imagine the entire organizations - service centers, sales representatives, researchers, it staff. They can probably cut quite a few jobs, thus cutting costs.
They could also retrain some of these extra people, and use them elsewhere they might need them.
Basically, I think this could be a good thing for the companies (one less competitor to care about), but possibly a bad thing for us customers (less choice), and definitely a bad thing for quite a few employees (pink slips).
Stop the brainwash
Even if the iPaq vanishes, something else will take its place. The Pocket PC thing has incresing momentum. The Toshiba "Genio" looked better than an iPaq to me anyway... CF slot built in. It's not out quite yet though, we'll see what the reviews say.
Linux? "developed by Intel and Hewlett-Packard"?
I'm still confused
The IA-64 port of Linux was mostly developed by.... Intel and HP, not too surprising given that Intel and HP are the people behind the IA-64 and Linux support is crucial for new architectures these days, especially in the server market that IA-64 is targetting.
Of course, they could have been talking about HP-UX on IA-64, but be honest, I don't see HP-UX going anywhere but gradually downhill.
I was researching Carly Fiorina and came across an InformationWeek.com interview with the 'boss', dated Friday, July 20th, 2001. It seems to provide some insight into why HP is buying Compaq. Here is the quote from the article:
Carly:
You made the comment that Compaq is becoming a services company. Look, all Compaq has done so far is follow our strategy by nine months to the letter. Including on [June 25], saying, "You know that IA-64 idea that HP has been on for seven years and co-developed the chip? We think maybe that's a good idea, we're going there."
So, what I see Compaq doing actually is following us and I do not think they have the systems-class capability that we do, nor do they have the experience around rich content, which our planning and imaging business gives us. And more and more of the applications are moving to rich-content kinds of applications.
Well, she's obviously a very intelligent woman coming from the rest of the article(and her COUPLE of BS and MS's), and this seems to explain a few things about her reasoning. So what Compaq is lacking HP will be filling in, to create this giant service-over-network beast which will be the Next Big Thing for the Internet.
"I'll just chip in a bit for RedHat: I actually have that installed on my university machine." - Linus, '95
instead, they're issuing ~50% more HP shares.
If HP management assimilates Compaq well, all is well for the stockholders. If they destroy Compaq and the acquisition ends up worthless, the stockholders will have paper worth 1/3 less than it was before the merger.
the story is also covered by cnet http://cnet.com/news/0-1003-201-7046992-0.html?tag =tp_pr
Do some research man - HP already supports linux like crazy - right on www.hp.com there is mention of Linux right now. Our HP reseller sent me e-mail a month ago about the HP A class and one other low end server where you have a choice of HPUX or Linux.
among which are:
1) Co-opt an Intel desktop/server competitor, and buy their marketshare and salesforce in the process; acquire their customers and revenue stream.
2) Buy some intellectual capital, i.e., patents and such, cheap. Compaq was always a high-volume business-market PC vendor (lots of PC desktops and Intel servers). But they bought Digital and Tandem, then didn't know what to do with them. HP might still find some useful IP laying around at Compaq - and know how to use it. Hell, maybe HP's realized that hanging their hat on Itanium/McKinley was um,... unwise and shortsighted, and they're looking to develop the Alpha hardware architecture as a hedge against Intel's fumbling in the 64-bit space. PA-Risc is long in the tooth now.
3) Economies of scale. I put this third because I think it will have the least long-term impact. But it will be the one immediate benefit touted by HP and the market. It'll mean big layoffs and charges though, so I won't be rushing to buy HP shares this morning. Shorting HP might not be a bad idea, today.
For those of you who were not around for it: HP bought Apollo in the early 90s. Apollo had what I stand firm in calling the coolest OS in history (totally network-aware, UNIX-like environment, odd-but-compelling GUI with X support, stable network filesystem, etc). They also marketed the world's first networked workstation (followed quickly by Sun).
When HP bought them, they 86'd all of Apollo's technology (except for the critical RISC tech they wanted in the first place) and as soon as they were allowed to by the terms of the "merger", fired most of the Apollo staff. They even had the gall to go to all of the Apollo customers (who were running an OS that you simply could not beat at the time) and tell them that their "upgrade path" was to transition over to HP/UX (one of the world's most brain-damaged versions of UNIX).
Please, don't assume that HP is going to do anything more sane in buying Compaq. The iPaq will probably suffer and/or be removed. I expect to see the final death-blow to the alpha. All of DEC's old technology will likely be scrapped. HP may have changed, and if they have, more power to them. But, I'll reserve judgement....
but likely not good news for either HP or Compaq.
The Register has no less three stories about it: one with the basic announcement, the second explaining why it's a bad move ("Carly Kisses The Ugly Frog"), the third printing Mikey C's mealy-mouthed, cliche-laden worldwide memo to Compaq staff (and oh-by-the-way, 15,000 of you will lose your jobs). See http://www.theregister.co.uk for all the Register stories (and yes, I'm too lazy to code the HTML links - it's late). Go there and look.
It'll be interesting to see what IBM has to say about this merger internally. That won't be up for a couple of hours, though (first, decide what to say...).
Search slashdot archive - Sony has already demo'd a machine with 64 Emotion chips for rendering tasks..
Hetz (Heunique)
Hmm, this is going to be VERY interesting...
Few people I talked to who are working on McKinly processor - says that they can barely make it work at around 1Ghz...
Now - it would be interesting to see Intel's rep talking to PHB, where the PHB sees P4 running at 2Ghz currently vs. McKinly running at 1Ghz...
Would Intel join AMD campaign that "Mhz numbers doesn't matter anymore"? we'll see...
Hetz (Heunique)
I wonder if I'll finally be taken off the Compaq spam-mail lists, or just added to all the HP ones...
" took nearly two MONTHS. Why the delay? Because H-P wouldn't honor the warranty unless/until it was submitted by an engineer who was certified on *that particular server*. Compaq never played that kind of shenanigans. "
Yep. I'm a holder of several HP repair certifications, for several lines of NetServers and their Vectra workstations. To get a replacement part for something, someone on our staff would have to pass a test (taken online). They didn't even require that you have the A+ to take their tests either...
I've probably forefited all my HP certs now that I work at IBM (even as a contractor).
Compaq has a cert called ACT that certifies you as a tech on most of their stuff.
IBM is simpler, they require you to have an A+, then take their tests to familiarize you with their servers, workstations, and warranty procedures, and you are in.
At one time, I had certs for all three companies.
=== The price of freedom is eternal vigilance
For years we were trying to tell management DECs were good servers. (the bastards kept getting HPs) ... FINALLY :)
:P
DEC was purchased by CompaQ
CompaQ was purchased by HP
We <LI>are in bed with</LI> have a strategic alliance with HP.
Now we can FINALLY get DEC servers
Some things to think about before making a comparison:
-Automobile manufacturing is hugely capital, labor and material intensive compared to computers, so it is a far from nimble company to make changes in. The auto product is expensive to manufacture - but the difference between low and high end is rather narrow ($15K to $60K) compared to computers ($500 to $1G). Both are highly reliant on engineering, but autos use it more for design concept and execution - the basic premise and technology (i.e. the internal combustion engine) is virtually unchanged. Compare that to computers, which seem to have major changes under the hood almost yearly, not to mention software.
-As for Chrysler, they were already screwed, to pursue your analogy. They have always been overly reliant on inventory, since they never had the manufacturing capacity of either Ford or GM (or Toyota or Honda for that matter). Thus downturns would be ruinous - a circumstance that nearly led them to bankruptcy. Additionally, they never established a global presence - their efforts to establish themselves in European or Asian markets have failed miserably. Chrysler tried to compensate for these shortcomings by hoarding cash, which only made them a takeover target for Kirk Kerkorian and other shareholders; and by designing new products that were flashy and interesting (e.g the PT cruiser - nice look, lousy car).
-As for who got who consider this - Daimler's egomaniacal CEO, Juergen Schrempp saw an opportunity to be king of the mountain - he saw a company that on the surface had some interesting products and was number three in the U.S. The Chrysler team knew that without a global presence and having spent the cash to fend off Kirkorian and company, the company would atrophy over time, and so when Mr. Schrempp strutted into the boardroom, they knew they had a big one on the hook. They got the best terms they could, grabbed their golden parachutes and jumped out of the plane. Twelve months later, as the company bled red ink over Highland Park, Schrempp and a top lieutenant have stepped in, since it's now his ass on the line.
True, the end result may be that Chrysler maybe Daimler's "bitch," but they have been well compensated for the privilege, and not without giving Daimler a nice dose of the clap!!!
...both sell UNIX, and both support GNU/Linux.
;-(
I'm still waiting for decent support for my HP PhotoSmart S20 scanner. Even the Windows scanner program isn't good, although the driver itself works. Linux drivers? I don't think so...
"When two company's with the same product combine, they often can make more money than if they were seperate"
Yes, that's the synergy theory of mergers. Events since 1970 or so have shown that it rarely happens. Usually, all the best people in the acquired organization leave immediately under their own power, the customers get confused during the transition and stop buying, no one can figure out which staff is 'needed' and which is 'duplicate', arbitrary, unpleasant, and ineffective decisions get made, profitability falls, more layoffs and cuts follow, morale heads south of the Antarctic, and the whole organization sputters and chokes for 3-5 years. If it survives.
sPh
John
John
Both Compaq and HP have lost ground in the enterprise service space to IBM and Dell (I believe Compaq saw a 26% drop this year in market share in the enterprise market; not sure about HP). So I'm not sure I'd say Compaq has the Intel server market nailed.
Additionally, the PDA market has been generally stagnant. PDAs were a lot like health club memberships for average people. They would buy them to "get organized", but it would generally be nothing but a glorified address book. I think that's why Palm (who has 70% of the market) has been successful in the past (it was a fad to get a PDA because it made you "hip"), but is also having a hard time this year (no one sees a reason to upgrade). Case in point, in my office-- mostly people 32-50 in a large telecom company-- there are plenty of 2 year old Palm V's, but I've only seen one new model (a entry level 105, I think).
So I still don't know what big advantages Compaq is going to bring to HP.
Insert simplistic political, ideological, or personal proselytization here.
For the record, I like HP desktop PCs...when you're in too much of a rush to build one yourself, you can go down to Office Depot and snag a reasonably working HP PC in under 20 minutes.
I hate "out-of-the-box" Compaq desktops, because they have way too much pre-loaded software, and just don't seem solid.
Well, first of all, note that the government did take an intense interest in the AOL/TW merger, and did in fact force them to make some (limited) concessions for the sake of preserving competition.
And this is the key point: the feds don't (or shouldn't) get involved in mergers like this unless they threaten competition in certain markets. It would be very tough to come down hard on HP/Compaq in this regard because the only market where their merger could have virtually *any* negative impact on competition is the most competitive market on the planet: commodity PC hardware. Indeed, there was some chance that, absent a merger, both companies would have been out of consumer PCs The merger might actually help save a competitor. Seriously, I think the only PC firm that could really draw fire for a merger these days is Dell itself, and they quite frankly do not need to merge with anybody. Coming from the other direction, the only companies HP would have significant anti-trust issues with would be in printing and imaging, and I don't think we're likely to see much of that.
All that being said, I'm not sure that this merger will really end up achieving much. Combined PC sales for the two firms are not likely to be any higher than for the two separate companies, and while they could layoff some more people, I can't see them becoming Dell or anything. It could even hurt some. Barron's a couple of weeks ago pointed out that HP's printer business (especially ink and toner) was the company's cash cow, but one that could potentially bring in even more money if HP *didn't* compete in the PC market (they currently lose a lot of printer sales on bundling deals they don't get because they're a direct competitor in the commodity PC market). HPaq will not be getting out of PCs, so unless they keep or grow their market share, the printer bundling argument starts to become more potent.
Babar
What are you smoking? HP's greatest strength is computer technology are those kickass calculators! The HP-48 is the sole reason I passed some of my physics courses! After those, then come the printers.
(Okay, okay, mostly kidding... I agree with you that HP makes better printers and plotters than anybody else out there. My friends and I were just talking the other day how there hasn't been a new calculator from HP lately.)
You cannot apply a technological solution to a sociological problem. (Edwards' Law)
Nah, not yet. Just makes it that much easier for Microsoft to buy 'em later.
Give me my freedom, and I'll take care of my own security, thank you.
It's the alpha going to HP that has me intrigued. Intel's new design is heavily of HP origin, and now HP has a competitve processor--with out the albatross of latter-day Digital's marketing . . .
hawk
We've had this conversation before.
(Not speaking for my employer, or anyone else, of course)
As one of the HP employees who will not be made redundant, I'm glad that the company is going to try to be profitable to save the jobs of the employees that will be left after all of this is over.
Screw your trolling, or your misguided idealism, whatever it may be. Don't think that it's OK to trash the life of the living to spare the dignity of the dead.
"HP buys Compaq" is premature.
HP has put a proposal on the table to buy Compaq. To carry it through, the US and EU antitrust authorities must approve it. This will probably happen in the end, but the authorities may require some divisions to be sold off, and may require other concessions that make the deal less attractive. The stockholders have to approve the final deal as well, though only the large institutional investors have enough stock to have a say.
Do you see HP making great strides in the IT world? Do you see them giving away their OS for free (like SUN), or contributing large portions of it to open-source-free-software projects (like IBM and SGI)?
No, the best thing that HP could come up with was hiring Bruce Perens. Close, but no cigar.
To me, it seems like HP is acquiring Compaq to ensure that it maintains a reasonable amount of control over the Itanium architecture, as Alpha technology began rolling in. After all, they've "bet the company" on Itanium, and Intel/Compaq began to assure customers that Alpha and Itanium are one and the same (implying not just SMT integration but support for the Alpha ISA?).
If Carly wants to impress me with her business acumen, she must:
HP and Compaq have no idea how to survive in this marketplace. It will take a great deal more than a smoke-and-mirrors merger to prove otherwise.
Wow. It wasn't long ago that HP split off a peice of itself into Agilent.
___
The way to see by faith is to shut the eye of reason. --Ben Franklin
"Hompaq".
Or "Humpback", phonetically.
What you are missing here is that a Unix server vendor's processors' primary market is that vendor's operating system. Ultra Sparc for Solaris, Power4 for AIX, MIPS for IRIX, and Alpha for Digital Unix. Much as you might think the mass market desktop OSes are the only way to sustainability, each of these chips has/had done very well even before other OSes appeared on them (Linux, mostly). What Digital & Compaq/Digital did was cancel further Digital Unix development, ensuring a swift and painless death to the processors it depended on.
I couldn't give a shit about RedHat. How is RedHat supposed to be representative of all of us, let alone representative of my small niche of hardcore hardware geeks raised on big iron? You might not have noticed, but from almost the moment Linus wrote the Alpha port, we have been clamoring for desktop Alphas, small workgroup servers, anything. Never happened; Digital never made consumer motherboards. There was some hope Samsung would have done so, but for whatever legal & business reasons, they did not either. And then Compaq bought Digital and started chopping it up for parts.
Sufficient software forces were salivating at the prospect of working on the Alpha. What eventually crushed it was Digital's total incompetence at marketing and delivering to consumers, and Compaq's inability to sell to markets other than the WinTel field they were raised on, not Billy G deciding to take his ball and go home.