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HP Buys Compaq

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  • by Animats (122034) on Monday September 03, 2001 @10:55PM (#2249736) Homepage
    HP and Compaq both have extensive operations in Silicon Valley. The Compaq operations are mostly left over from DEC's west coast research labs. There's considerable duplication; for example, both Compaq and HP have their own CPU design groups, and their own flavors of UNIX.


    And this is after HP laid of 6,000 people in July.

  • by frleong (241095) on Monday September 03, 2001 @10:55PM (#2249738)
    Hewlett-Packard to Buy Rival Compaq -NYT [yahoo.com]

    Check the above link to read about this merger...

  • by The_Messenger (110966) on Monday September 03, 2001 @11:00PM (#2249754) Homepage Journal
    Holy fucking shit this is big news. It would have been bigger news if Alpha was still viable, but... wow. Two of the top five desktop PC/x86 server manufacturers are now one. Both have (or once had) established positions in the RISC market, both sell UNIX, and both support GNU/Linux.

    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

  • by Jeffrey Baker (6191) on Monday September 03, 2001 @11:01PM (#2249758)
    Intel purchased non-exclusive intellectual property rights to the Alpha CPU, and Compaq said previously they were killing the product line after EV7, due soon but my guess is we'll never see it. EV8 was supposed to be a realyy killer technology, but we'll definitely never see that except as bits and pieces tuen up in future Intel CPUs.

    Mergers of this magnitude take a long time to gestate, so I think it is safe to say that Compaq jettisoned Alpha as a condition of the merger.

  • by warpeightbot (19472) on Monday September 03, 2001 @11:12PM (#2249826) Homepage
    Jeez, people, how hard is it to replace "www" with "archives"?

    http://archives.nytimes.com/2001/09/04/business/04 DEAL.html [nytimes.com]

    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. [speakeasy.net]

  • by Anonymous Coward on Monday September 03, 2001 @11:15PM (#2249839)
    this looks like a merger of companies are both fucked.

    Yup, it's consolidation in a stagnant market, although it doesn't nessararily look horrible.

    HP gets:
    1) Strong x86 server presence.
    2) Very large PC customer list (although I doubt there's much money there)
    3) Digital's consulting group
    4) VMS, which will probably avoid death for another 10 years

    Which fills the gaps HP is missing as 2nd tier x86 provider (behind IBM and Dell) without much of a NT consulting division to speak of. When Itanium gets up to speed, they'll be in position to offer almost complete end-to-end services, which is complete crucial because corporations tend to ousource like crazy during a recession.

    The only question is which UNIX gets a bullet in the head. My guess is Tru64.
  • by Jonathan C. Patschke (8016) on Monday September 03, 2001 @11:29PM (#2249891) Homepage
    Compaq doesn't just make PCs, and HP doesn't just make PCs. They both make "high-end" (read as: expensive and unreliable) servers and workstations. What if they merge the "high-end" divisions? Can we look forward to:
    • 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.
  • by hillct (230132) on Monday September 03, 2001 @11:47PM (#2249962) Homepage Journal
    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
  • by jayslambast (519228) <slambast@y[ ]o.com ['aho' in gap]> on Monday September 03, 2001 @11:58PM (#2249995)
    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.
  • by Anonymous Coward on Tuesday September 04, 2001 @12:11AM (#2250046)
    September 4, 2001

    Hewlett-Packard to Acquire Compaq in $25 Billion Deal

    By ANDREW ROSS SORKIN and FLOYD NORRIS

    Hewlett-Packard will announce today that it is acquiring Compaq Computer for $25 billion in stock in a bold move to grow as the computer business struggles with shrinking sales, executives close to the negotiations said last night.

    The merger, if completed, would produce a company with total revenue only slightly less than those of I.B.M., the largest computer company. But both Hewlett-Packard and Compaq have recently seen revenues slide and profits plunge because of a computer industry slowdown, and both have announced job cuts.

    For Carleton S. Fiorina, who became chief executive of Hewlett- Packard in 1999 when she was hired away from Lucent Technologies, 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. Compaq is the other large company that has announced it plans to use that technology, which will compete with technologies developed by Sun Microsystems and I.B.M.

    Late last year, Hewlett-Packard had tried to move in a different direction that emphasized services by acquiring the consulting operations of PricewaterhouseCoopers, the large accounting firm. But that plan fell apart as Hewlett's stock price declined.

    Compaq, which is based in Houston, began in 1982 as a maker of personal computers. It became a phenomenal success in its first 15 years but has stumbled more recently amid severe price wars in personal computers. Its 1998 acquisition of Digital Equipment, itself once the second-largest computer maker, has not been viewed as a great success.

    Investors in both Compaq and Hewlett-Packard have suffered in the current decline in technology stocks, although Compaq's woes have taken a greater toll. That stock is down 76 percent from its peak, reached in early 1999, while Hewlett- Packard is off 66 percent from its peak, reached last summer.

    While the executives involved in the talks said that an agreement had been reached that provided for Hewlett-Packard to acquire Compaq, exact terms of the offer were not disclosed. They said, however, that a premium is being offered for Compaq's stock, which closed Friday at $12.35, down 34 cents, while Hewlett- Packard shares fell 19 cents to $23.21.

    The executives said that Ms. Fiorina would become chairman and chief executive of the combined company, which will be based in Hewlett- Packard's home town of Palo Alto, Calif., while Michael D. Capellas, Compaq's chairman and chief executive, will become president.

    Spokesmen for both companies declined to comment last night.

    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.

    Compaq had hoped that Digital Equipment technology would provide it with a competitive edge in new generations of computer servers. But it recently chose to not use that technology and instead go with the technology developed by Hewlett-Packard and Intel.

    Both Hewlett-Packard and Compaq have been hurt by price wars in personal computers, where it has been difficult for makers to differentiate themselves when all except Apple Computer are offering operating systems from Microsoft.

    Many in the industry hope that the trend toward decentralized computing, in which great computing power migrated to desktops in homes and offices, will reverse itself as a new Internet-based system uses racks and racks of powerful computers known as servers whose computing power will be called on by computers and cellular phones around the world. If that vision is realized, then a major battle looms over which maker of servers is able to gain a dominant position.
  • by OS24Ever (245667) <trekkie@nomorestars.com> on Tuesday September 04, 2001 @12:24AM (#2250080) Homepage Journal
    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)
  • by bal (112317) on Tuesday September 04, 2001 @12:31AM (#2250099)
    (Wait... did HP already sell off their hardware geek equipment division and name it something silly - I don't remeber for sure.)

    Yes, HP's Test and Measurement division was one of the groups spun-off to Agilent [agilent.com] back in November '99.

    --bal

  • by Anonymous Coward on Tuesday September 04, 2001 @12:36AM (#2250117)
  • 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.
  • by Anonymous Coward on Tuesday September 04, 2001 @01:32AM (#2250245)
    Hmm.... I've always been told that PCI was based mainly on Zorro (which is why Commodore was a hot buy for someone, due to the patents for Zorro that applied to PCI).
  • by Anonymous Coward on Tuesday September 04, 2001 @01:42AM (#2250263)
    Compaq had their chance - they were one of the few companies to seriously look into supporting BeOS in a dual-boot configuration with every PC they shipped. Remember - BeOS would have been *free* to any OEM who did this. But they backed off under pressure from M$. Just reduces the number of people Microsoft needs to lean on now.
  • by Anonymous Coward on Tuesday September 04, 2001 @02:14AM (#2250315)
    FYI, the ISA bus was patented by IBM (as with other standard components such as the VGA controller), but was available under favorable licencing terms, unlike MCA. It wasn't "open", just cheap.
  • Other Press Releases (Score:2, Informative)

    by KingKire64 (321470) on Tuesday September 04, 2001 @02:29AM (#2250345) Homepage Journal
    check out Compaqs Release http://www.compaq.com/newsroom/pr/2001/pr200109040 2.html

    and HP's http://www.hp.com/hpinfo/newsroom/press/04sep01a.h tm

    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
  • also covered in cnet (Score:2, Informative)

    by hama (515936) on Tuesday September 04, 2001 @06:27AM (#2250741)
    the story is also covered by cnet http://cnet.com/news/0-1003-201-7046992-0.html?tag =tp_pr [cnet.com]

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