Compaq has put the pedal on the metal in its quest to become a top three computer company by the year 2000.
Last week, at its Innovate Forum 97 conference in Houston, Texas, Compaq outlined a strategy which will take it into the 21st century and which essentially revolves around the company putting its fingers into as many different pies as possible.
In his keynote address, Eckhard Pfeiffer, Compaq's president and CEO, put the plan into context.
"Back in 1993, when Compaq announced its aim to be the world's leading supplier of PCs by 1996, we were a $7 billion (u4.4 billion) company.
Only two years later we had become a $15 billion company and had already achieved number one position in PCs," he said. "Compaq is now the fifth largest computer company in the world and we are stepping firmly on the accelerator to achieve our goal of getting into the top three by the year 2000."
Pfeiffer announced that Compaq would be building and configuring systems to order, enabling it to reduce inventory and cut prices. "The new model begins now," he said.
Pfeiffer also said Compaq would continue to work closely with other partners on projects such as the NetPC. "For more than a decade now, we have been pioneering these partnerships. I think it was Andy Grove (Intel's president and CEO) who coined the phrase 'horizontal model' that mandated integration between vendors. This is one of the reasons we work so closely with Intel and Microsoft, in particular - a relationship which has been called the 'golden triangle'," noted Pfeiffer.
He also dropped strong hints that Compaq would be making one or more major acquisitions in the near future, furthering the partnership theme.
Company officials said it was likely that one of the deals would be in the networking arena. Recent rumours have centred on Bay Networks, developer of networking hardware such as switches. Compaq is also now rumoured to be interesting in acquiring Gateway 2000, prompted by its recent move into direct selling.
Rounding off his address, Pfeiffer said he believed that in the future all PCs across the world would be connected. Compaq intends to be at the forefront of this change, he added. "There will be more technology in the network itself. The network will know all our information needs and the Internet will be increasingly engineered for change. The Internet will become more object-oriented and move towards industry standard network computing," said Pfeiffer.
"We will do for the network what we did for the PC in the 80s," he concluded, referring to the first to market reputation Compaq once enjoyed.
Another key element of Compaq's strategy will be to strengthen its notebook line in a bid to challenge market leader Toshiba. The plan kicked off earlier this month with the launch of the Armada 1500 range, described by the company as offering robust features typically only found on high-end notebooks, but cheaper.
Mike Winkler, Compaq's senior VP and group general manager for the PC products group, said the Armada range is the first part of Compaq's "re-establishment as the leading portable manufacturer in the world". He added: "We will continue to expand and enhance our Armada family over the coming months, with an important announcement for our Armada 4100 range in June."
But the anticipated arrival of new Compaq notebooks is unlikely to worry rival manufacturers such as Dell, which has previously accused Compaq of confusing its customers by offering too many products in its notebook range.
Notebooks aside, Compaq's strategy involves the release of products which speed up the Internet and solutions it claims will "cut the total cost of ownership".
At last week's event, Compaq demonstrated technology which it claims will speed up the Internet by 300%. Jointly developed by Compaq and Massachusetts-based Integrated Computing Engines (ICE), the Compaq Acceleration Server Technology is said to load World Wide Web pages up to three times faster than current solutions.
John Rose, senior VP and group general manager of the enterprise computing group at Compaq, said: "In virtually all instances of Internet usage, network bandwidth constraints impede the quality of the Internet surfing experience."
He added: "Compaq Acceleration Server Technology will offer a unique combination of hardware and software that compresses graphical Web content in near real time. It will enable faster throughput and relieve network congestion."
Rose believes the technology will be of great benefit to corporations with intranets where graphical Web content can impede performance. "Why travel on a 737 when you can fly on Concorde?" he added.
The solution combines ProLiant x86/NT server technology with Internet application software jointly developed by Compaq and ICE.
Continuing the Internet theme, Rose said Compaq would be supporting NetCentric's Metered Services Information Exchange protocol, enabling ISPs to meter and invoice the use of Internet applications and services such as video conferencing, fax, IP telephony, messaging, collaboration and gaming.
Rose also announced new server fibre channel technology, designed to speed up the process of storing data, and confirmed Compaq would be developing an eight-way server machine.
Accompanying the new products will be changes to the way Compaq distributes solutions. The company has finally confirmed months of rumours by admitting it will be selling direct to customers as part of what it calls its Optimised Customer Delivery programme.
Company officials said the direct strategy, which has raised some concern among dealers, will benefit the company in the medium-sized business market where direct vendors such as Dell Computer and Gateway 2000 are particularly strong.
The Optimised Customer Delivery operation will be handled by a new worldwide sales, marketing and services division, being headed by Dick Snyder.
The direct operation will run alongside Compaq's existing authorised reseller channel. Snyder was quick to reassure resellers that Compaq would remain committed to them.
He said the proportion of its business generated from direct sales would remain fairly small, especially in the UK. Currently, the business is split 90% indirect and 10% direct. "We can now answer the needs of every customer," claimed Snyder.
In the fiercely competitive PC market, it is no longer viable to deliver just part of a solution, a fact not lost on Compaq. The company's new strategy of collaboration and diversification into new markets reflects just how hard it will drive to achieve its goal of becoming a top three player by the end of the millennium.
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