Compaq and Digital: Almost a Year Later It Still
By Stephen Lawton
When Compaq Computer Corp. of Houston,
TX, acquired Digital Equipment Corp. (DEC) in June 1997 for $9.6 billion,
many questioned Compaqs motives. Compaq, after all, was a devoted
Wintel company and had little apparent need for Digitals billion-dollar
Alpha chip or its sophisticated Digital UNIX. The crown jewel of the Digital
acquisition was Digital Service, the worldwide service and support organization
that regularly contributed roughly 40 percent to Digitals bottom
But Compaq has surprised many DEC-watchers, including
me. Ive covered DEC since 1984 when I joined Hardcopy, one
of the original computer technology trade publications following the midrange
market. (We called them minicomputers back then.) Not only has Compaq
continued to develop Alpha-based systems, it also has expanded and enhanced
the technology and that comes as a bit of a surprise.
In a recent issue of the newsletter Shannon
Knows Compaq, analyst and DEC-watcher extraordinaire Terry Shannon
(email@example.com) points out that
the Compaq AlphaServer DS20 uniprocessor trounces the best single-CPU
performance of all rival vendors, and outperformsthe Compaq AlphaServer
GS140 enterprise server by 55 percent to 90 percent depending on the benchmark.
This report is good news on a couple of fronts.
First, its great that these single-CPU-based systems are showing
dramatic increases in performance, especially for applications that needthe
highest performance possible. Of course, weve come to expect speed
boosts, but this is Alpha were talking about here, the world-record-holder
in performance and an almost unknown player in the NT server market
for small to midsized businesses.
Its also great that Alpha is around at
all. Many analysts had speculated that Compaq would shutter Alphas
development and product lines because it competed directly with the high-end
Alpha is more than just alive its
thriving. Even Compaqs home-state archrival, Dell Computers of Round
Rock, TX, is now reselling Alphas though a deal with Alpha OEM Network
Appliance. With Compaq and Dell moving Alpha boxes, can it be that Alpha
finally found the champions it needed to gain respectability and
Compaq has proven in real terms that acquiring
Digital was more than just a ploy to take over Digitals stellar
service and support operation. In addition to Digitals billion-dollar
Alpha development efforts and product line, Compaq also acquired the profitable
StorageWorks operation, as well as one of the fastest, if not one of the
largest, Web search engines in AltaVista.
Compaq is taking steps to enhance the service
significantly, making it the cornerstone of a portal the company plans
to spin off. Unlike large companies that lost their corporate focus
and began launching operations all over the computing globe, Compaq has
done well to keep itself focused on its core business.