Compaq poses a major threat to other hardware vendors since its acquisition of Tandem and Digital Equipment, but still faces significant problems with its sales channels and the resulting customer relationships.
"All of the other hardware vendors are concerned about Compaq and for companies like Sun and Hewlett Packard, it's now enemy number one. But it's still not integrated at the moment - it has too many channels and it's really in a mess with its customer facing activities," said Brad Day, vice president of consultancy Giga, at a seminar in San Francisco today.
He continued: "Compaq's offering no company-wide discounts and customers are being given different rates from different parts of the business, which they're not happy about. The company will need to do something about it in the next 12-18 months or it'll be in trouble."
To add to Compaq's problems, the Tandem acquisition had taken longer than expected and was still not complete, Day said. The Digital purchase earlier this year would hit the firm's financial results and Digital's service business would also depress revenue per employee ratios, which would not be appreciated by Wall Street.
The company would also have difficulties positioning Digital in relation to Tandem and would need to clarify its Alpha and Unix strategies, he added.
A Compaq representative said: "There are always transition issues after a merger but things are progressing smoothly. Services will be an important part of our business. Our channels and customers are generally satisfied but we always have to keep up the dialogue."
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