Compaq Delivers: Commitment To the Channel

Analysts agree, attributing Toshiba's success in channel strategy to the fact that it generates the least amount of business directly to customers. "Toshiba is the company that is the most committed to the channel," Gartner's Margevicius says.

Scoring highest in the ARC 2001 loyalty rating was IBM with a rating of 7.7, followed by Compaq with 7.3, Toshiba with 6.5 and Dell with 6.3. IBM gets kudos from VARs, who note that the PC giant really seems interested in their success. Says Burgess: "More than anything, we see IBM as being genuinely excited about our business model and our ability to position IBM into new accounts and win business."

Compaq has spent the past 12 months strengthening its partnerships and believes that, as a result, it is uniquely positioned to take advantage of the fundamental shift going on in the industry.

"As we move forward in the vertical spaces we've declared--initially, finance, telecommunications, government, retail and health care--we will need to leverage the expertise of partners in these areas," says Michael Capellas, Compaq chairman and CEO.

Even in the face of the proposed merger with Hewlett-Packard, Capellas notes that partners are particularly important as Compaq transitions to a services-led solutions company. "We are working aggressively with our partner community to enhance our ability to deliver innovative programs, like Computing on Demand, and extend a growing portfolio of solutions capabilities to the broader market," he says. "It should be transparent to the customer whether it's Compaq or one or more of our partners delivering on key elements of the solution."

Those solutions, says IDC analyst Alan Promisel, are likely to cost less and offer thinner and lighter designs. "We see configuration and specifications reaching desktop levels," he says. "[And] we see wireless technology becoming integrated as a standard specification among all notebooks."

One area Compaq must focus on is quality. Analysts tout IBM's high quality over Compaq's in notebooks. For example, while Promisel admits that essentially all notebook OEMs will offer the same configurations, he bets on IBM in the product quality area. "They just have a better developed R&D capability," he says.

Still, Compaq's Gruzen is confident the company has overcome past quality issues and maintains the low scores in this area are "...not reflective of the quality of what's going out the door today." And he means to prove it. "I'm looking forward to talking to you next year, he says. "You'll ask a question like, 'Hey, you guys were in such a bad state [in the product quality criterion] last year. Now you're No. 1,how'd you do it?'"

Will Gruzen's prediction come true? And what will happen if HP buys Compaq? Could that combination dramatically improve notebook quality, or could quality become a casualty in the ensuing chaos? Tune in next year.

Part 1: Compaq Promises, Compaq Delivers

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