Compaq rides services trend

Compaq rides services trend

In what many industry experts see as a growing trend to deliver technology as a utility, Compaq led a string of announcements last week by IBM, Hewlett-Packard, and Sun Microsystems, each designed to increase the service offerings surrounding their hardware and software sales.

Compaq announced last Tuesday its "Computing on Demand" initiative, which will tie installation and technical support services to its PC, server, storage, and handheld devices.

The initiative will allow Compaq customers to build and scale their own corporate IT networks without having to make multiple product purchases. Instead, all of the technology a company needs, including overhead capacity for servers and storage, will be available for purchase at a preset price and performance level, depending on a customer's business model.

"For many corporate customers extending to small-and medium-size businesses, hardware is more and more considered a utility," said Peter Blackmore, executive vice president of Compaq Worldwide Sales and Services. "We think this is a fundamental shift in the industry."

Compaq Chairman and CEO Michael Capellas has been a strong advocate of the service model since he took over the helm of the company in 1999.

It was also learned last week that IBM will soon integrate its PC sales division back into its normal sales and distribution channel, eliminating it as a stand-alone unit.

The global reorganisation of IBM's PC sales division also reflects the growing trend toward solution-oriented approaches to sales.

"[IBM is] on the solutions sales side of things. If you're the grand guru that can solve some enterprise's problem, then you can probably have the rest of the sales," including PCs and other hardware, said Roger Kay, an industry analyst at IDC.

Also last week, HP fortified its ability to deliver top-to-bottom technology services with its acquisition of consulting company Comdisco. On the same day, Sun ramped up its service offerings with an expanded alliance with EDS, a diverse e-business solutions company.

The service and solution efforts from Compaq, IBM, HP, Sun, and others are designed to allow customers to focus on their core businesses, while outsourcing more IT responsibilities. But solution-oriented sales also help vendors cut costs by streamlining their sales channel, IDC's Kay said.

"They do reduce some redundant functions in the field," Kay said.

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