PC company, Compaq, faces challenge in Digital acquisition

Unix termed Compaq's "entry into 64-bit computing"

By Marc Ferranti

May  1998
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New Orleans (April 28, 1998) -- Compaq Computer Corp. CEO and President Eckhard Pfeiffer made a pitch for his company's ascendancy from PC supplier to global enterprise systems provider here today to thousands of users attending CA-World.

With the purchase of Tandem Computer Inc. last year, and the pending acquisition of Digital Equipment Corp., Compaq is poised to offer a complete range of systems, from standards-based PCs to highly scalable machines based on the Unix and VMS operating systems, Pfeiffer said.

Compaq wants to move forward to apply to high-end systems the PC market principle of offering systems based on industry-accepted standards. This will give users of high-end machines the flexibility of a broad array of interoperable applications, Pfeiffer said.

The idea of packaging up systems on industry-standard components has served Compaq well in the PC and PC server businesses, Pfeiffer noted. He pointed to recently issued market share figures from International Data Corp. (IDC) that put Compaq's North American market at 17.3 percent in the first quarter, up 4.5 points -- the biggest jump of any PC maker in the quarter.

But Pfeiffer said he realized that bringing the industry standards-based computing concept that has worked so well in the volume PC business to the high-end world will take time.

"Information managers today clearly face a real dilemma. On one hand you want to deploy open standards-based systems as broadly as possible," Pfeiffer said. "On the other hand you need highly scalable, highly available systems that deliver the performance and the reliability necessary to support mission-critical operations. We want to eliminate the need to choose between flexibility and performance."

To this end, Pfeiffer said, Compaq has introduced the Enterprise 2000 Architecture, aimed at bringing industry-standard platforms to meet the most demanding applications. The E2000 Architecture includes new clustering, storage, and symmetrical multiprocessing (SMP) technologies.

For the interconnects, Compaq plans to use Tandem's ServerNet, which offers high-speed data transmission with failover capacity. Also included in the Enterprise 2000 plan is Fibre Channel-based storage.

Within a year, the company plans to release standards-based systems that perform at 200,000 transactions per minute (tpm), and by 2000 the systems should hit 500,000 tpm, Pfeiffer said.

Digital Unix and VMS support to continue
But Compaq, recognizing users' need for high performance now, plans to continue to support Unix and VMS platforms from Digital, as well as the Digital Alpha chip.

Unix is Compaq's "entry into 64-bit computing," Pfeiffer said. And though the company will embrace the upcoming rival 64-bit Merced chip from Intel Corp. and Hewlett-Packard Co., Compaq will also continue to incorporate the Alpha processor in systems.

Licensing deals for Alpha technology with Intel and Samsung Electronics Co. Ltd., and licensing negotiations with Advanced Micro Devices Inc. (AMD) are making the Alpha chip an industry standard, fitting into Compaq's philosophy, Pfeiffer said.

The move to bring the PC concept of standard platforms to the high end will bring benefits to users by offering "plug-and-play" enterprise applications, Pfeiffer said.

Compaq is working with industry partners to offer a palette of interoperable applications that run on industrial-strength machines, Pfeiffer said.

As an example of how Compaq is doing this, Pfeiffer pointed to "Club Web," what he called a community of applications providers that offer Internet applications in a coordinated manner for Compaq customers.

It's being offered as a one-stop shop for interoperable applications designed to get customers up and running on electronic commerce applications as quickly as possible.

Compaq is also launching this year an extranet to connect the company to its own suppliers and channel partners, and will also open the extranet up to customers, in order to help them plan and deploy enterprisewide systems.

"This seems like a logical step for Compaq, since they're a leader in PCs and in PC servers, and we find their PCs to be very reliable," said Mark Werner, an information system manager with Brigham Young University in Provo, UT, and an attendee here at CA-World.

Other users here said it might be difficult to merge Digital with Compaq.

"It's going to be a big challenge for Compaq, which has been a PC company, to integrate Digital," said Reed Leishman, a manager of information systems for Thiokol Corp., in Brigham City, UT. "They might have the same problems IBM has had. IBM is so big it has had trouble bringing its various systems together for users."

Bringing the Digital services arm to bear on Compaq products won't be as much of a challenge as integrating the Unix and VMS forces, said Ian Flack, a systems architect with Lex Vehicle Leasing Inc. in the U.K.

"Services people go wherever they need to go, but the VAX and VMS people may end up feeling a bit alienated," said Flack, a former services employee at Digital.

--Marc Ferranti is a correspondent with the IDG News Service


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