Compaq VARs Embrace HP, Urge Quick Action

Compaq Computer Hewlett-Packard

The Compaq solution providers interviewed by CRN were generally in favor of the merger but warned that HP needed to hurry up with details about how it plans to merge the channels and product lines.

One of them, Don Richie, president of Sequel Data, Austin, Texas, said Sequel would have gone through the HP certification even if there had been no merger on the horizon.

"We have heard a lot about HP programs," he said. "HP has its Hard Deck and says it will not sell below that level directly. Compaq says it has one, too, but there are no guarantees."

Rich Baldwin, president of Nth Generation, a San Diego-based firm and one of Compaq's largest West Coast solution providers, said his company just obtained HP certification and also will begin selling HP products regardless of whether the merger ultimately goes through.

"I'm taking advantage of this opportunity," Baldwin said. "Compaq is promoting the merger. I'm getting the jump on it. In September, I went out and started the paperwork. Storage, big Unix boxes,my strategy from day one has been to be ready to work with both vendors. Even if the merger doesn't work out, I'm ready to work with both vendors. Compaq can't be pissed at me,they encouraged me to do it."

Sequel's Richie said he hopes the merger happens, and happens fast. "The waiting is killing us," Richie said. "Customers are putting business off because they are not certain of what to buy. On top of that, IBM and Sun are out spreading the FUD."

Richie said it was scary to see IBM and Sun Microsystems so happy about the pending merger. "If they were worried about the new competition, they should show it more. Instead, they are cheerful," he said.

Richie said the big advantage to the merger for Compaq is that HP is focused on the enterprise, while Compaq is still known as a PC company. "The problem is, Compaq doesn't see that," he said. "Look at their marketing. It's all focused on the PC. Never on the enterprise, never on storage."

A recent meeting with HP executives in Dallas convinced Richie that HP is running the merger, a much better proposition given Compaq's handling of its Digital Equipment acquisition in 1998.

"HP enterprise VARs should hope HP keeps its current programs, otherwise they will be disappointed," he said. "Compaq, even after acquiring Digital, still thinks like a PC company."

Todd Barrett, networking sales manager for CPU Sales and Service, a Waltham, Mass.-based Compaq and HP solution provider, said he hopes the merger question gets settled as fast as possible so he can go back to fighting against Dell.

"Everyone using Compaq or HP systems is starving for information," Barrett said. "Dell has been calling on accounts, telling them that no matter which way the merger goes, there will be changes in the products, and so they might as well switch to Dell. . . . A lot of customers wonder if their favorite HP or Compaq person will walk out the door, and a Dell rep walk in right after them."

Barrett said there could be two possible outcomes to the merger. First, the combined company could better understand the importance of the channel and invest the amount of resources needed to grab market share. "But on the flip side, a new group might say it has to compete against Dell, and so might end up with two people out there trying to cover 5,000 resellers," he said.

Steven Manteros, general manager of GST/Micro City, a Cerritos, Calif.-based solution provider working with both HP and Compaq, said whether or not the merger holds up, the two vendors will have to develop new strategies.

"The merger vote has been a distraction to them both," he said. "To grow, they need to make changes. I don't want to speculate. But I would like to see them both come in, discuss where they want to go, what steps they want to take, and how they will view their channel resources."