ARC Entry-Level Servers: Compaq Wins By a Nose

Compaq, which wrested market share leadership for entry-level servers in 1999, has squeaked into the lead in the hearts of solution providers, according to Annual Report Card results.

Compaq, Acer and IBM were a point behind HP in last year's rankings, but the Houston-based manufacturer took the lead this year, eking out a win with an overall average of 73, a point ahead of second-place HP and Apple, two points ahead of Acer and IBM, and three points ahead of Dell.

Compaq's revenue from entry-level servers in 1999 grew 44 percent to $6.8 billion, while IBM's sank 2 percent to $4.8 billion, according to Framingham, Mass.-based research firm IDC.

The three-point spread in the ARC rankings indicates a commoditized server market, where solution providers don't see much difference among vendors. But Compaq insists that differences exist: "Our entry-level servers are well-differentiated from the competition," says Paul Gottsegen, Compaq's vice president of North America Industry Standard Servers. "We spend a lot of time working with our customers to understand their needs, then have the engineering prowess to deliver the features they are looking for. The best example is in the area of manageability. Our suite of Insight Manager products is a key reason customers choose Compaq servers."

Although Gottsegen insists on Compaq's "engineering prowess," Compaq only scored fourth in product quality, behind Apple, HP and IBM. "Our focus is always on quality," Gottsegen says, citing Compaq's server reliability lab as "one of Compaq's key ingredients to delivering a superior product."