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HP Buys Compaq 759

Posted by timothy
from the 25-billion-dollars dept.
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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HP Buys Compaq

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  • by CMiYC (6473)
    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....
  • A Hardware monopoly? (Score:3, Interesting)

    by os2fan (254461) on Monday September 03, 2001 @09:42PM (#2249680) Homepage
    Maybe we might end up with a hardware monopoly to rival Microsoft - aka IBM's PS/2 architecture.

    What happens if HP and Microsoft fight ... HP are already on record as saying they would go elsewhere if they could ...

    • I think that the key phrase is "if they could".

      I highly doubt that this merger could force anyone into using something other than Windows.

      Get real.
    • Maybe we might end up with a hardware monopoly to rival Microsoft - aka IBM's PS/2 architecture.

      Ummm...do I *have* to point out that IBM's PS/2 architecture fell flat on its ass in an all out war with Microsoft? :-)

      • 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 ASCIIMan (47627)
    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.
  • Interesting... (Score:3, Interesting)

    by CMcTortoise (246171) on Monday September 03, 2001 @09:44PM (#2249687)
    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?
    • Re:Interesting... (Score:3, Insightful)

      by iso (87585)

      When it comes to marketing a product the main goal is to differentiate your product from your competitors. In the case of PC manufacturers, this is extremely difficult, as there's a lot of competition and everybody uses the same standard parts. Tech support, bundled software and brandname works to differentiate between "mom & pop" assembled computers but between "big-name" manufacturers there really isn't much difference (i.e. as you mentioned, Gateway is pretty much screwed). Interestingly enough this article singled out Apple as the only company that can truly differentiate themselves from the pack.

      As we all know, the PC market is quite saturated. Most people who are going to buy a PC have bought one and PC manufacturers are now almostly completely reliant on upgrades to existing computers to drive sales. In this kind of a market differentiation is going to be important; the question is, how are they going to do it? Since Microsoft really isn't going anywhere it's quite likely that it'll be in the form of proprietary hardware. While a manufacturer can get a better volume discount on generic parts, gross margins on more custom hardware are much higher. witness the 20%+ margins of laptops compared to the razor thin margins of desktop PCs.

      Compaq has already started on this trend with some of thier iPaq line [compaq.com] and I think we'll see more of this in the future. In the current industry climate the small guys (like Gateway) aren't going to last long and it seems that mergers are the key to success. With only a few "big name" PC vendors out there it will be a lot easier to push proprietary hardware than it was in the days of the PS/2.

      As long as "standard" hardware can still be purchases then it won't affect the geeks much, but let's just hope that standard PC hardware is still supported at large. I'd hate to see the latest and greatest hard drives, RAM or video cards only supporting IBM or HP motherboards. Mergers the size of this one bring us a lot closer to the possibility of a much more closed PC market.

      - j

    • by El_Nofx (514455) on Monday September 03, 2001 @11:45PM (#2250145)
      Gateway sucks becuase...

      1. On March 25th 1999 they changed their entire warranty program and it resulted in the vast majority of computers being purchased with a minimal warranty that forced customers to PAY for service after 90 days / a year if they wanted support. There went 20% of the buisness

      2. They went from the company that targeted the enthusiast and gamer, Only placing ads in computer magazines to targeting the first time home user from Stinkwater Alabama. Targeting these people was a mistake in it's self for any computer company. Any computer the first time users buys especially one with windows 98 or Me on it will crash almost hourly and all the problems will not be blamed on faulty ms software and 18 itmes in their startup, it will be blamed on the once good quality computer company. The companies rep's got sick of listening to Joe Bob from Stinkwater yak about his problems and stopped caring. The service went down hill and Gateway lost all it's repeat buisness, which made up about 65% of it's total sales.

      3. They never diversified their products.
      They tried but it never worked, they offered gimics like the ASTRO (imac rip off) and the profile (laptop on a stand), neither of which went anywhere. They got rid of their best line of computers, the Destination, which offered 36 inch moniters and wireless periferals in '96. They tried to sell servers and workstations but noone bought them because they were crap.

      P.s. I just quit working for gateway after 3 1/2 years. best move I ever made

      Hp and Compaq will be successful if they can trim the fat and start competing with Dell and IBM. Or else Dell will own the desktop, IBM the server and MS the software

      Jerry Ford is a nice guy but he played too much football with his helmet off - LBJ
  • by jdbo (35629) on Monday September 03, 2001 @09:44PM (#2249691)
    Hewlett Paqard?

    ...c'mon, _someone_ was gonna say it...
  • by AtariDatacenter (31657) on Monday September 03, 2001 @09:44PM (#2249693)
    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
    • 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.

      I suspect the baggage they'll throw away is HP's. Compaq is strongest where HP is weakest.

      HP's greatest strength in computer technology is its printers. It's OK in midrange systems, but Sun and IBM are both stronger. HP's midrange systems are all proprietary today; this means their long-term viability is a crapshoot. Maybe they'll endure, maybe not, time will tell. HP's Intel servers are decent, but their strongest market is with companies that have HP midrange systems. Does HP even do desktops any more (and if so, why)?

      Compaq, on the other hand, doesn't do printers. Their "midrange" platform is dead - Alpha fans don't want to accept it, but Compaq has no long-term plans for it. As pointed out elsewhere, both Compaq and HP are looking to Itanium for future midrange gear.

      Compaq has the Intel server market nailed. Someone with market numbers chime in please, but I believe they're way ahead of everyone else. Compaq is credible on the desktop. Their major competitors are Dell and IBM. especially on business desks. Finally, Compaq has PDA offerings that HP lacks, and has a successful storage business that HP would benefit from.

      All in all, this looks like a good move for HP ... if they don't destroy Compaq in the process of assimilating it.

      -- This space for rent.

      • by sg3000 (87992)

        Compaq has the Intel server market nailed. Someone with market numbers chime in please, but I believe they're way ahead of everyone else. Compaq is credible on the desktop. Their major competitors are Dell and IBM. especially on business desks. Finally, Compaq has PDA offerings that HP lacks, and has a successful storage business that HP would benefit from.

        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.

    • I agree that this deal seems really shady for HP. Compaq has a huge product line (VMS, Tru64, Tandem, and PC stuff) and HP has its own huge product line (they still have their proprietary HP9000 stuff, right? plus HPUX and PC stuff).

      In an age where the common strategy is to streamline business lines, obviously HP is taking a different approach. I really have to wonder exactly what they're thinking here. It seems that Compaq's strategy with DEC was to transition customers on the proprietary platforms to Windows NT but that didn't work. HP must have something better up its sleeve.
    • by denshi (173594) <toddg@math.utexas.edu> on Monday September 03, 2001 @10:42PM (#2249945) Homepage Journal
      With this one, I'd have to say that Fiorina is a tool.

      I'm glad someone brought up previous acquisitions. There's a bit of history worth examining here.

      Compaq ate Digital, sold the StrongARM to Intel who buried it b/c it was an order of magnitude faster than Intel's low-power chips. Compaq/Digital then shed all their good engineers b/c their corporate culture sucked. Most of the Alpha guys went to AMD, which explains a great deal about the Athlon. (Incidentally, many of the StrongARM guys went to Cadence. Anyone know anything else?) They partnered the with Samsung, but for whatever reasons, Samsung has not been able or willing to sell Alphas here in the States. In op/sys, Compaq/Digital has tried several times to cancel the Digital Unix line; but hey, they renamed it to True64! Compaq/Digital told all their Unix customers that they were switching them over to NT; you can imagine how receptive their customers were about that. Thus, True64, marginal continued development, but most customers just left and went to Sun/IBM/Linux.

      Final analysis? Fucking waste of money. The only people who benefited from this were the executives and the competition.

      Round about the same time, Compaq bought Tandem. I used to run a Tandem in 96 -- nice boxes. The first thing Compaq did was gut the sales force. Compaq, a PC vendor, assumed that one needs one salesman to sell one machine (or some such). Turns out, you need a small army to sell a mainframe; lots and lots of handholding and a salespeep for each engineer. Tandem would often have several dozen salespeople working on a single client, for a multi-million dollar order. The inevitable response to gutting the salesforce? Yes, they lost all those orders.

      Final analysis? Fucking waste of money. The only people who benefited from this were the executives and the competition.

      Modern corporations are not innately designed to make money. They are innately designed to get bigger, driven by senior executives with Napoleon complexes. It does not help that standard management training teaches managers to seek larger fiefdoms rather than efficiency or productivity. This is not the usual Green-party ranting -- a survey of CEO salaries indicates an explosive growth over the last decade; even biz-school professors and analysts are worried.

      Before I finish this, I should turn my cynicism on HP. In, I think, 1996 HP announced a new direction: dump their processors (PA-RISC) and their Unix (HP-UX), in exchange for Intel & NT. Of course, the customers fled to the other Unix vendors; they sold some nice NT boxes before realizing that no one can sustainably sell WinTel boxes on the margins that a big corp demands, since the clone makers can always build the same thing for less. HP fired the CEO who masterminded that FUBAR decision, and got back behind PA-RISC & HP-UX. Lasting fallout: fewer customers, multi-year development agreements with Intel (witness the Itanium & McKinley.). Is this the sort of company that can integrate a company like Compaq?

      Technical acquisitions are perhaps the most complex of any company integration project. When I see an announcement like this, by two companies who have spent the last few years hurting while everyone else enjoyed the boom times, whose product lines overlap and present no clear engineering wins; I think 'golden parachute'. This is a way to manipulate the stock price. I see no clear way or reason for HP/Compaq to become anything more than an also-ran.

      • by VAXman (96870) on Tuesday September 04, 2001 @12:20AM (#2250221)
        Compaq ate Digital, sold the StrongARM to Intel who buried it b/c it was an order of magnitude faster than Intel's low-power chips.

        Huh? The guys upstairs in WCCG doing StrongARM and XScale (StrongARM, renamed) would be very interested in knowing that Intel buried their product. The fact is, StrongARM is generally acknowledged as one of Intel's key acquisitions in the last few years, and has a highly bright future ahead of it (at some point, it is likely to replace DragonBall in the Palm). It's a heck of a lot more successful than when DEC owned it, that's for sure.

        FYI, the entire original StrongARM team walked out as soon as they were acquired by Intel. That's their fault, not Intel's. The Alpha team seems to have been a lot more cooperative (a whole bunch of them were just named Intel Fellows last week).
        • by denshi (173594) <toddg@math.utexas.edu> on Tuesday September 04, 2001 @02:39AM (#2250466) Homepage Journal
          As I heard it, the StrongARM team was based around Digital's New England foundry. Given the often idiosyncratic nature of the weather in the area, winter in particular, you would sometimes not see some engineers for several days. So it seemed that Intel's much less flexible culture might not look kindly on this kind of behavior. Speaking of culture, everyone in the chip biz seems to think of Intel as the place chip designers go to die -- overwork, mistreatment, malfeasance, etc, etc. I don't know, nor do I care that much. That's just the word on the street, and it seemed to be enough for them. OTOH, I'm glad to hear the Alpha team is doing so well.

          I was building boards on StrongARM back in 1998, and when Intel bought them, it just sort of fell off the face of the earth for a while. I think it wasn't until 2000 that I started seeing StrongARM in anything higher than the 233MHz DEC had fabbed on .35 micron. I was really hopeful when Intel bought them; I thought we would see them move it to .22 or .18 as soon as possible. Imagine! 600+ MHz at <1 watt, in 1999! Didn't happen. With other assumptions and evidence in hand, I believe that Intel's short-term business was best protected by sitting on StrongARM until Intel's core chips had caught up. Of course, having the core team quit doesn't help them ramp up quickly either.

          While you're here, could you tell me which ARM core they're building XScale with now? Do they have SMP enabled? (StrongARM (v4 core) had the SMP pin shorted).

      • by Poligraf (146965) on Tuesday September 04, 2001 @02:45AM (#2250473)
        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.
      • With this one, I'd have to say that Fiorina is a tool.

        That's why HP is buying Compaq, not the other way around.

        When Compaq bought DEC they weren't buying them for their Alpha or Strong arm line. They were buying them because of their consulting business. That's where DEC was making their money, not selling hardware. The thing Compaq never seemed to learn was that one of the main thing their consultants were supporting was those Alpha systems running Digital Unix (or whatever it's named now). Some of those systems could be replaced with NT, but NT is often marketed as a server OS for the less technical elite administrator. People who want to run NT are making some trade offs, and those trade offs don't include high priced consultants from Compaq.

        Compaq's handling of Tandem also seems to be an example of management not knowing the market they were in. You don't sell mission critical servers without a large and highly technical sales and support force.

        In, I think, 1996 HP announced a new direction: dump their processors (PA-RISC) and their Unix (HP-UX), in exchange for Intel & NT.

        Did they dump their PA-RISC/HP-UX line, or just move many of their resources on to creating their next line of processors, which is Intel's IA-64. The IA-64 processor development is far behind it's original schedule, and performance has fallen short of what many expected. HP has had to spend more resources updateing the PA-RISC line because they don't yet have a new product to which they can transition their customers.

        ...they sold some nice NT boxes before realizing that no one can sustainably sell WinTel boxes on the margins that a big corp demands, since the clone makers can always build the same thing for less.

        If this is true, then why has Dell done so well?

        There are some reasons that this merger might work well. HP has always had a diverse product line. They understand much better than Compaq that you don't sell and support oscilloscopes the same way you handle printers or servers. Compaq never seemed to get this and has paid the price.
        Most of their product lines are complementary. Although HP does currently sell PCs, they are not making money at it. Compaq's PC business might be a good match for them. HP's printers, scanners, and other periphrials also fit well with Compaq's offerings. There is some overlap in the server area. Both companies have some midrange servers, though Compaq likely has a better business running NT. Maybe HP can combine it's PA-RISC people with the people who are left from DEC and Tandem to revitalize their high end server business.

        In any case, this industry is in a slump, and is likely in for some rough times ahead. By merging HP and Compaq might be able to better survive the slump. Though, I think HP with it's diverse product line would have survived just fine. Compaq had a diverse product line, but consistently killed off any part that was too far from what they considered their core business. It seems to me that Compaq was heading for a fall, and HP decided for some reason that Compaq's resources are worth $25 Billion. I hope HP is smart enough to not let the managers from Compaq continue to make the same mistakes under HP's name.
  • by Carnage4Life (106069) on Monday September 03, 2001 @09:45PM (#2249695) Homepage Journal
    I just checked out the article [nytimes.com] and was struck by how negative the articles in the Related News link were:
    • 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.
    • by madburn (35976) on Monday September 03, 2001 @10:08PM (#2249802)
      ...this looks like a merger of companies [that] are both fucked. Also considering the amount of overlap in their products, expect more layoffs.
      This smells a lot like the "mating dinosaurs" of the 70s-80s, such as when Sperry Univac and Burroughs merged into Unisys. Interestingly enough Unisys survives primarily via perpetual government contracts, and a big part of Compaq's business comes from selling their mediocre and expensive hardware to governments.
    • by Anonymous Coward
      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 Billly Gates (198444) on Monday September 03, 2001 @11:42PM (#2250136) Journal
      Keep in mind that HP may hold the patent on nano-technology in the next 10-15 years. HP invented the first nano-logic gate or at least funded the research. They have filed a patent application already on this and are working on others related to this. Also HP worked with intel to help invent the IA-64 so they will have profit comming in soon when these babies sell. A third sign of good news is that with the purchase now HP has access to some of alpha's bus technology(comapq/intel both own it I believe). HP may be the next IBM or even intel. If intel needs a nano chip they must pay HP. The good news is that IBM may hold the patent on circuits so HP won't have a total monopoly of future computers.

      The stock right now is real cheap(before the announcment grr) and for a few months I considered buying it while the investors fleed from it. (Why didn't I buy 3 months ago darn it.) I also read in fortune magazine that HP is investigating possible super conducting nano-carbon circuits and also certain nano organic strucutres like the cernigents in sea shells for future fiber optic wires that could transmit data alot further and be cheaper to produce. HP has huge R&D staff ivnestigating this and other nano/micro related research. Alo Michael Dell predicted by 2005 there will be only 3 or 4 major pc comapnies and thats it. Mainly do to support and since large OEM's build large stocks of computers at a time, they are cheaper to produce and have a cheaper selling price. He was right. Anyone remember quantum computers, midwest micro, micron, etc ? Compaq makes some nice servers (desktops its debatable :-) ), and they have digitals support and consulting staff so they will be a consulting powerhouse like IBM. Sure HP will have some more problems with profits this quater and the buyout will not help in the short term. But damn I am buying now for the long term!

      I believe the stock price will soar to record levels in long term projects. The only problem is I lost my job a year ago and have a new one now but I have little money to invest. But believe me, HP is doing the right thing and investing in research like this while all but IBM have just been investing in existing technologies chip technologies which may become obsolete real soon. HP nows what the hell they are doing. Also compaq is gaining support from more and more bussinesses in pc's bought so its now or never to buy before compaq would eventually overtake HP.

      My prediction is in 2010, slashdot will be full of anti HP slogans just as it is from anti intel and microsoft ones. I will link this post 10 years from now while my karma goes up for +funny or +informative.

      • by Phexro (9814) on Tuesday September 04, 2001 @03:57AM (#2250605)
        "My prediction is in 2010, slashdot will be full of anti HP slogans"

        my predictions for slashdot in 2010.

        1. archived on a set of dvd-rw discs, buried in cmdrtacos basement, because va linux went bankrupt
        2. merged with freshmeat to create "slashmeat", only has poorly-spelled software announcements.
        3. 18,742nd "yro" article posted, which is witty, intelligent, and insightful. goes unnoticed since everyone has been filtering katz' stuff since 2005.
        4. dastardly scheme uncovered in which it is revealed that hemos, jamie, john katz, and 58% of the slashdot readers don't really exist - they're all cmdrtaco.
        5. slashdot staff worth $80,000,000 in va linux stock - but it doesn't matter, because that's almost enough for the mcdonalds two-for-one special on tuesdays.
        6. cmdrtaco married; took a decade to find someone uglier than hemos' wife.
        7. 4,251,974th "first post" that isn't the first post posted.
        8. cowboyneal's body mass [cowboyneal.org] becomes so dense, he collapses into a singularity. readers bitch about slashboxes never being fixed.
        9. cmro taco is quoted as saying "*bsd suckz!! linux rulez!!" (by the wipo troll). ignites a holy crusade, in which the geek compound is burnt to the ground by a mob of disgruntled *bsd developers who are sick of playing second fiddle.
        10. 14,622nd "cowboyneal" survey option still not funny.
  • oh no... (Score:5, Funny)

    by spacefem (443435) on Monday September 03, 2001 @09:47PM (#2249703) Homepage
    How will they combine PC color schemes? Rose! Pink! Disaster!
  • by alewando (854) on Monday September 03, 2001 @09:51PM (#2249717)
    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.
    • Let's not forget SPARC:)
      • There's potential for MIPS too: there are lots of vendors bring out some very impressive 64-bit MIPS processors. PMC-Sierra has their new RM9000x2 [pmc-sierra.com], SiByte has something similar [sibyte.com] and NEC has some 64-bit offerings [nec.co.jp] as well. Granted all of these chips are targeted at the telecom/datacom market but the technology could be adapted for use in servers if necessary. Still, it is sad to see the Alpha go.

        - j

    • 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.

    • It would take more then Apple drowning in a bucket before PPC goes away. Apple has been selling it up, even in the bad economy.

      cisco Systems is also using PowerPC chips in their new routers, plus Nintendo in their GameCubes. So that isn't going to happen.

      Pat

    • Actually, this transaction completely explains the fate of Alpha: HP did not want to buy a company which had a directly competing product (Alpha vs. Itanium), and which did not even use its (HP's) parts in their products. So, HP convinces Compaq to give up Alpha to Intel, and switch to using HP processors.

      Although there was a lot of confusion about Compaq's decision to drop Alpha initially, it is now crystal clear.
    • 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.
      Alpha is no longer solely owned or designed by Compaq. They formed a joint venture with Samsung in 1996. Intel also has a stake in Alpha now. Unfortunately, none of the above has done a particlularly stellar job of marketing Alpha, so it'll probably stay relegated to high performance scientific computing.

      In a similar venture, PPC is jointly developed by Apple, Motorola, & IBM. The PPCs in Apples are nothing more than glorified embedded CPUs, where Motorola's are almost all for embedded use. IBM has developed their own variations of the PPC, most recently the Power 4 CPU, which has on-chip multi-processing.
  • More details (Score:4, Insightful)

    by byrd77 (171150) on Monday September 03, 2001 @09:53PM (#2249727) Homepage
    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.
  • 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?
    • yeah but DEC Alphas were way ahead of their time. Sort of reminds me of The Tucker.

      Everyone is going to stick w/what they feel comfortable w/(Windows/Intel).

      I really don't see the advantage for HP in buying out Compaq. They already laid of what 6,000 employees, had pretty poor outlooks for the future (as is every tech stock, but still)

      I feel that both HP and Compaq make poor computers for regular people (I have no experience w/their professional series -- but knowing what Compaq did w/their newly aquired Alpha line I could only make some assumptions that it isn't good).

      I say boo to this. Should have kept the fucking employees rather than wanting to save money to spend $25 billion on this.
  • 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.

    • What parts of shitty Compaq will they be using in HPs now?

      Damned straight. I sure as hell don't want those Compaq torx screws and nonstandard drive rails stuck into my next oscilliscope or scientific calculator.

      Looks like I'm buying Tektronix and TI from here on out.

      (Wait... did HP already sell off their hardware geek equipment division and name it something silly - I don't remeber for sure.)

  • by Animats (122034) on Monday September 03, 2001 @09:55PM (#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.

    • Yea, but since both have completely decided to get out of CPU design (Both companies have said Intel will be thier suppliers), they can just layoff everyone. It would be easier that way. Besides, since Intel can't design (for reference see the 7 years they spent on the P4), we're all screwed. The IA-64 was an HP design, Intel was brought in to do the fabbing, but took over. The chip everyone is waiting for to prove IA-64, the McKinely is mainly designed by HP. [slashdot.org] Kinda of sad isn't.
  • Hewlett-Packard to Buy Rival Compaq -NYT [yahoo.com]

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

  • 64-bit architecture (Score:5, Interesting)

    by chill (34294) on Monday September 03, 2001 @09:58PM (#2249746) Journal
    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.
  • by The_Messenger (110966) on Monday September 03, 2001 @10:00PM (#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

  • Shocking (Score:5, Insightful)

    by mikethegeek (257172) <[MAPSmoc.mfimcwON] [ta] [rialb]> on Monday September 03, 2001 @10:01PM (#2249756) Homepage
    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...
    • I've always preferred Compaq's to theirs.

      Eh? Compaq, harbingers of butchered hardware vs. HP, who generally uses "normal" parts. Compaq going bye-bye? Good riddance.

    • I've never been impressed with HP's products (other than printers, which are the best), particularly their servers or workstations.

      That's too bad. HP's PA-RISC line has always been absolutely top of the line and has always held its own against Alpha. For whatever reason, HP has never been viewed as the 'hip' comany that DEC was, and seemed more stodgy and conservative (almost IBMish).
  • 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.
  • After my initial reaction, namely being shocked by imagining how huge this company will be, I started to think about it. We have two struggling computer companies spending a whole buttload of cash to become one BIG struggling company. How does this help profits at all?

    I'm not a businessman, surely someone around here can enlighten me.

  • TruHP Unix (Score:2, Funny)

    by andkaha (79865)

    I hope they won't rename OSF / Digital Unix / Tru64 again!

  • by sphealey (2855) on Monday September 03, 2001 @10:06PM (#2249789)
    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
    • 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.
  • by NetJunkie (56134)
    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.

  • by debrain (29228) on Monday September 03, 2001 @10:08PM (#2249803) Journal
    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.
    • Could go either way. HP could have too much on its plate to even being worrying about Linux, or it might see it as a perfect integration tool.

      I don't think it is too hard to say that Digital UNIX should be thrown away in the merger. It doesn't have a future.
    • by Bruce Perens (3872) <bruce@perens.com> on Tuesday September 04, 2001 @01:38PM (#2252342) Homepage Journal
      Bruce's Opinion Follows, not the HP Official Line: Obviously both companies have a Linux thrust. I doubt the merger would turn that off, instead I expect that together the two companies are a Linux powerhouse. Although Compaq is somewhat late to accept Linux, they claim to move more Linux systems than any other company. HP has some very good Linux efforts in place, has its pioneering role with the ia-64 architecture, and of course has yours truly.


      Of course we now have to figure out how to fit the two companies together, and that will take a while. I live in exciting times :-)

      Thanks

      Bruce

  • by shagoth (100818)
    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.
  • by standards (461431) on Monday September 03, 2001 @10:12PM (#2249825)
    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.
    • Hear, hear! The parent post hath wisdom.

      I wouldn't want to be working for Compaq now. The acquiring firm takes control, and most management (and lots of staff) will be shown the door.
      If this merger happens, you can kiss your job at Compaq goodbye. HP will keep the customers and axe the staff. If HP doesn't screw it up, that is...

      OTOH, this shows how desperate HP executives are to _do something_ about the fact they don't have revenue growth. Maybe Carly's last blunder.

  • No Need to Login (Score:2, Redundant)

    by jsse (254124)
    Direct link to the article is here [nytimes.com].

    (due to lameness filter I must insert something here. Stupid lameness filter)
  • 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?
  • 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 crovira (10242) on Monday September 03, 2001 @10:30PM (#2249898) Homepage
    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.
  • by joneshenry (9497) on Monday September 03, 2001 @10:36PM (#2249918)
    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.

    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 [forbes.com]. 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.

    • by KerrAvonsen (518107) on Tuesday September 04, 2001 @02:20AM (#2250438) Homepage
      ...are doomed to repeat it.

      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.

  • 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!
  • eep... (Score:2, Funny)

    by CrazyBrett (233858)
    I work for Compaq... boy, I bet it's gonna be weird at work tomorrow...
  • HP - Aquire (Score:2, Funny)

    by steevo.com (312621)
    Is this going to replace the current tagline, HP - Invent?
  • by jayslambast (519228) <(moc.oohay) (ta) (tsabmals)> on Monday September 03, 2001 @10:58PM (#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.
  • What new OS? (Score:2, Interesting)

    by Broken Bottle (84695)
    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
  • PocketPC market? (Score:3, Insightful)

    by GrouchoMarx (153170) on Monday September 03, 2001 @11:08PM (#2250040) Homepage
    I wonder what effect this will have on the PDA market. Compaq's iPAQ line is the top selling PocketPC (although still a far distant third to Palm and Handspring in PDAs overall), and HP's Jornada line is #2. Will HP keep the iPQA line as is? Will they terminate it and pull the engineers into the Jornada team? Will they rename it to something without as many Qs in it?

    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....

  • OS to Drop? (Score:2, Insightful)

    by Justarius (305126)
    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.
  • 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.
  • Believe it or not, this is a very good time for these two corporations to do a large-scale merger.

    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 [yahoo.com] 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 [yahoo.com] 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).

  • MS Visual Fortran 4 begets
    Digital Visual Fortran 5 begets
    Compaq Visual Fortran 6 begets
    HP Visual Fortran 7?
  • by Justen (517232) on Tuesday September 04, 2001 @12:23AM (#2250227) Homepage Journal
    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 [time.com].

    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 [hp.com] 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 [hp.com] 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
  • HP/Apollo (Score:3, Insightful)

    by ajs (35943) <ajsNO@SPAMajs.com> on Tuesday September 04, 2001 @06:01AM (#2250778) Homepage Journal
    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....

"If that makes any sense to you, you have a big problem." -- C. Durance, Computer Science 234

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