Compaq Delivers Promise To Improve Performance

Third place last year in the client category, but first place this year in notebooks--that's a leap Compaq is only too happy to talk about. Last year, well before merger talks were even a glimmer in anyone's eyes, the Houston-based PC maker walked away from the VARBusiness Annual Report Card (ARC) resolving to improve performance, particularly in the areas of support and availability and to, well, just become an easier company to do business with.

Delivering on those promises and then some, Compaq captured first place this year with an overall score of 74, at or ahead of its competitors in seven of the 11 criteria.

"The ease-of-doing-business part of it is, for us, the ultimate goal," says Dan Vertrees, vice president for partner sales and marketing. "We listened to our VAR community...and we took copious notes."

Product availability, in which Compaq finished first with 76 points, is a key driver of customer satisfaction, according to Alex Gruzen, vice president and general manager of Compaq's mobile division.

"There has been a tremendous push over the past year in enabling our order cycle time," he says. "It is a metric that we are measuring as a company all the way up to senior management and [CEO] Michael Capellas."

A mere point behind Compaq in product availability was Dell. But the direct deal diva was unable to break past second place anywhere in this year's notebook race, sharing the No. 2 honor with Compaq in postsales support, with 77 points. Overall, Dell tied for third place with Toshiba, each garnering 70 points.

The product/pricing subcategory was definitely a roller-coaster ride again this year, with IBM leading in product quality/functionality, scoring 88 points,the highest score to appear anywhere in the notebook category. Toshiba followed with 82 points; Compaq and Dell tied for third place with 79 points. Gartner Group analyst Mark Margevicius is not surprised. "In notebooks, I still think IBM is the furthest ahead," he says. "The IBM ThinkPad brand is one that still garnishes a lot of customer attention."

Attention aside, in revenue/profit potential, IBM took a dive in this year's ARC, down two points from 1999. Compaq came out in first place with 70 points, followed by Toshiba with 67, Dell with 65 and IBM with 64. But IBM reseller Jeff Burgess, president of Burgess Computer Decisions, Northbrook, Ill., is undaunted. "Not only is ThinkPad a margin-maker, but [it's] very competitive against Dell on price and performance," he says. "For us, it's a ThinkPad world."

Resellers voted Compaq No. 1 in overall support with 76 points, followed by IBM (74), Dell (71) and Toshiba (69).

"Compaq's presales support is strong," says Joe Kremer, vice president of marketing for CDW Computer Centers, a Compaq reseller. "Its marketing support also has gotten better, more seasoned, really. It is communicating effectively to its audiences--direct marketers, VARs, customers--in a timely manner. And the resources we need are there for us." In the criteria of presales and marketing support, Compaq also placed first with 78 and 72 points, respectively. In postsales support, Compaq tied with Dell for second at 77 points, where both were beaten out by IBM by a margin of two points.

Compaq's lead in partnership was a slim one, succumbing to IBM by one point in two of the five criteria: administration of the VAR program and communication. It held onto first in the e-business program and ease of doing business criteria, edging IBM by three points in each, and it tied with Toshiba for first place in channel strategy.

"I think the channel understands that Toshiba wants a partnership with the VARs of the world to cater to the solution for the end user," says Mark Simons, vice president and general manager of transactional sales for Toshiba America Information Systems. "We generally place fairly high on this part of the report card. I think that's why we did in 1999, and I think that's why it is true today."

Part 2: Commitment To the Channel