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Centari hedges on Compaq/HP

Centari hedges on Compaq/HP

As Compaq and Hewlett-Packard shareholders consider whether to vote on March 19 for the merger of the two companies, HP's largest Australian reseller, Centari Systems, has announced it will jump aboard the Compaq bandwagon.

"We did some business with Compaq in the last year -- $4 million or so -- but we are getting access to some terrific products, in particular Compaq's storage and server products," said Centari managing director Jon Johnston.

Once a pure HP-only partner, Centari has been gradually adding vendors to its stable since 1999 and has direct relationships with the likes of IBM, Fuji Xerox and Toshiba. But the move will also guarantee the company best-of-breed products regardless of what changes occur if and when the HP/Compaq merger goes ahead. While HP will no doubt dominate the printing and systems business, Compaq is stronger in the Intel-class server space. Centari Systems will also get the best of both worlds in terms of channel programs and rebates.

"With the HP/Compaq merger, we expect a fair degree of consolidation with product lines and people, so it is important for us to have the right relationships with everybody because six months from now it could be a very different entity," Johnston said.

Even if shareholders vote against the amalgamation of the companies, Centari will still have the advantage of expanding its products and services.

"We need to be where it counts," Johnston said. "If the merger doesn't go ahead that is fine too because our objective is to vendor-diversify anyway. That is what is really pushing it for us.

"We are having a record year. Our hardware business will only grow by 10 per cent, but profitability-wise we will have a record year by over 45 per cent. That's because of a 140 per cent growth in our services revenue."

Neither Compaq nor HP was prepared to comment on the deal, but Johnston praised the Compaq representatives as "outstanding". "We have found them to be very responsive and very good with customers; they have been a very good company to deal with."


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