HP Execs Say Compaq Integration Plans Well Under Way

Hewlett-Packard Compaq Computer

Ann Livermore, president of HP's services organization, said Wednesday that the two companies have already developed detailed business strategies that will be put into place if the merger is completed. Shareholders will vote on the controversial transaction on March 19.

The integration is complete for all services lines of business including outsourcing, consulting and customer support, she said. A team of about 60 people from both organizations has been working on combining the two companies' services arms. The top goal in the midst of this complicated project is to make sure the combined company maintains its focus on meeting commitments to customers, Livermore said.

Livermore said the cultures between the two services organizations are very similar, "so much so, if I were to close my eyes at these meetings, I couldn't tell you if it was an HP employee or a Compaq employee speaking."

Livermore said she has met face to face with about 80 percent of HP's 30,000 services employees. Head-count reduction goals and IT plans have been formulated for each line of business and are ready to be given to managers so that on day one, the company can hit the ground running, she said. She added the companies have completed the discovery phase, looked at best practices, chosen "a go-forward plan" and constructed a detailed road map.

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In the case of the companies' respective spare parts businesses, for example, the team has already decided how many distribution centers will be consolidated, chosen IT systems and finalized migration plans and logistics partners, Livermore said. "We have an aggressive adopt-and-go strategy" she said. That task is made somewhat easier because both companies use SAP and Clarify enterprise applications, she added.

Livermore further noted that HP will put in place service managers in each geography within weeks of a merger vote, so issues will be dealt with quickly.

Employees at both companies are "fired up" to be part of what will be the third-largest services company, Livermore said. HP is currently ranked eighth.

Duane Zitzner, president of HP's Computing Systems group, said his group has likewise formulated detailed post-merger plans. Decisions have already been made on product road maps and customer transitions. He promised that a detailed playbook for field management will be available within several weeks of the merger if it is approved by shareholders.

In an interview with CRN after his presentation, Zitzner said that the company will continue to make both Compaq and HP high-end enterprise systems that are already in customer use available for some time. "The big equipment will stay around for years," he said.

Zitzner said he is hopeful the PC business will pick up in the second half of the year, and even though the combined company will build an aggressive direct distribution capability it will still rely heavily on distributors. The merged company has to do more in direct sales to compete with Dell Computer and keep that company from making more inroads, he said.

"Dell has done a great job in the PC business. You have to give them credit. But they are not there in the data center," he said.