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Compaq/Digital buyout has channel guessing

Compaq/Digital buyout has channel guessing

Distributors and resellers across the country may be salivating at the thought of rationalised product lines following Compaq's shock buyout of Digital, but for some organisations such as Melbourne-based reseller GE Capital IT Solutions (formerly Ferntree Computer), the feeling is one of trepidation.

GE Capital IT Solutions claims to be Compaq's largest reseller in Australia, pulling in revenues of $50 million last year, while the reseller also secured $2 million in Digital sales in the last six months.

But Mike Shove, GE Capital's general manager of Alliances and Marketing, suggested the Digital name might not hang around for too long once Compaq starts to call the shots.

"I don't see Digital's PC line surviving in the long term.

"It doesn't make any sense to have two different yet competing product lines."

The jewel in Digital's crown must surely be its services business unit, a bargaining tool Compaq desperately needed as it continues its quest to rival Hewlett-Packard and IBM as solution providers.

But according to Shove there are doubts as to whether Compaq can carry off the integration of Digital's business units without losing its focus.

"Compaq will have to be careful not to take its eye off the ball and worry about which staff are staying and who's going.

"That sort of navel-gazing is something HP and IBM have made an art form out of," Shove said.

He added that Compaq's current projects, such as its build-to-order facility, would need to be put on hold for about six months while both vendors thrash out a suitable integration strategy.

Shove admitted that there would be less choice for GE's customers following the merger, but countered by saying that a mix of Compaq and Digital PCs and notebooks, Digital Alpha servers and both vendors' support of Windows NT would keep customers happy.

"We'll certainly have to add more staff to cater for the enlarged product line, but we don't envisage this to be a huge concern," Shove said.

"Globally, more opportunities will make themselves available now that we have access to both Digital and Compaq's customer base."

But, the question remains: will loyal Digital customers want a bar of resellers suggesting they should purchase Compaq PCs or networking equipment?


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