Compaq is beefing up its direct-sales capabilities with the acquisition of the custom configuration and order management activities of Inacom, a long-time Compaq distributor.
Compaq will pay $US370 million in cash for the Inacom activities, which it will integrate into a wholly owned subsidiary that will report to Compaq's Mike Winkler, senior vice president and group general manager of commercial personal computing.
The acquisition, which had been rumoured, was announced in a conference call last week. In the call, Compaq president and CEO Michael Capellas said the deal will have its most immediate effect on the company's dealings with global accounts. He said Compaq would maintain a strong relationship with channel partners and suggested that resellers would actually benefit because of more predictable product supplies and lower inventories. Compaq executives repeated earlier statements that the company intends to reach 40 per cent direct sales in the US by the end of this year.
Charles Smulders, an analyst at Dataquest, said the Inacom deal will allow Compaq to deliver to its customers more complex preconfigured systems than its biggest competitor, Dell Computer. However, said Smulders: `There's very little evidence in the industry that buying your reseller is a sound strategy.' Smulders said the acquisition would likely upset other Compaq resellers.
`What Compaq is doing is mixing and matching capabilities from two companies and trying to piece them together,' said Roger Kay, a research director at IDC. Dell, by contrast, grew its direct capabilities organically, said Kay.
Eric Klein, an analyst at The Yankee Group in the US, is more optimistic. `Compaq had a long-standing relationship with Inacom [so] I don't think it will take them long to piece this together,' said Klein. This move is an important step for Compaq toward catching up with Dell in the direct arena, he added. http://www.inacom.com