Compaq had no surprises up its sleeve today in its plans for the future of Digital Equipment, finally revealed after shareholder approval was granted yesterday for the merger announced in January.
Months of speculation were boiled down to a few obvious strategies. Focus on Windows NT, the Internet and pushing so-called standards based computing higher into the enterprise. The latter strategy includes a clear commitment to the Alpha processor technology and to 64-bit Unix. However the Digital brand will, as expected, disappear.
John Rose, senior vice president of enterprise computing, said Digital's proprietary OpenVMS and Tandem's Himalaya operating systems would be the high end offerings of Compaq's Enterprise 2000 strategy while they continued to push upwards with Windows NT.
"There is little doubt that Compaq is the market leader in providing Windows NT systems. We have 40 per cent to 70 per cent of packaged application solutions markets," he said.
Providing customers with an 'NT friendly' Unix and middleware to enable better interoperability was the key to expanding Compaq's place in the enterprise market he said, given that most companies run mixed NT-Unix environments. Clustering would be a key technology for improving performance and availability of servers.
The company plans to launch its Active Answers Web site in the next few months to provide dynamic online tools to accelerate implementation of packaged applications.
John Rando, senior vice president of the new Compaq services organisation and one of the few members of Digital's senior management team to survive the takeover, said they wanted to increase revenue generated from the services business from $6 billion to $15 billion by 2002.
Much of this growth would come from professional services - systems integration and outsourcing that comprises 40 per cent of the existing business. This includes Compaq's 'Futuresourcing' offering for systems and network management.
Eckhard Pfeiffer, chief executive, confirmed there would be rationalisation of PC manufacturing facilities worldwide, leaving an axe hanging over Digital's facilities in Scotland.
He said the combined companies had 86,000 employees, 2,000 of whom would transfer to Intel with the sale of the Alpha facilities and 15,000 would lose their jobs.
The company said it would continue to push the retail and channel configure to order model for PCs in the US. However the future of Digital's Alta Vista business remains undisclosed.
There was little comfort for OpenVMS customers however. Although Pfeiffer insisted that no Compaq customer would go unsupported, he had nothing to say about any actual developments of the operating system, leaving suspicions lurking that these customers would increasingly be pushed toward OpenVMS' half brother of an operating system, Windows NT.
On a financial front the company said it expected to break even in the second quarter of this year ending next month, excluding charges for the takeover related to the job cuts ($2 billion) and for closing ongoing development at Digital ($3 billion-plus). The company expects the fourth quarter to be stronger when Digital starts to contribute to revenues.
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