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A Growing Appetite

A Growing Appetite

Meanwhile, analysts claim HP stands to gain in its ability to take on IBM, at least when it comes to services. Some predict the combined HP/Compaq services business will boast 65,000 services professionals, giving it a chance to gain ground on IBM, with its 100,000 professionals. It is unlikely, however, to happen overnight.

"It took IBM six or seven years to pull its act together, and now HP and Compaq have a similar chore ahead of them," says Dana Gardner, senior analyst at Aberdeen Group. "You have two distinct companies with two distinct cultures at work. The way Compaq assimilated [Digital], it didn't work out so well for a long, long time."

Australian users are facing another period of uncertainty as they wait for any dust to settle. Shove, for instance, predicts at least six months of uncertainty as the new company sorts out its future direction.

"I don't see any obvious synergies between the two organisations, I just see overlap. Pure overlap," he says. "They both do PCs; they both do Unix; they both do break-fix, like engineering services. They've almost got two of everything. That will cause a lot of destabilisation within those two companies, because people will worry about who's going to get the jobs. And for users it means confusion. Do we treat them as we have in the past as two separate vendors? Or do we treat them as one?"

In a rapidly shrinking market, McDougall sees the loss of another major player in the game as having serious implications for users. "What really scares me about this one is we've lost a major player in the game. Now we've got basically three monopolies - Sun, HP and IBM. There are no other players in the field, really. It's not healthy for the industry."

McDougall points out that most big organisations will always try to have at least two vendors in its stable. Vodafone currently relies on Compaq and HP for its Unix platforms. Now it will just end up with HP. "We have to seriously consider whether we should be looking at maybe Sun, or something like that," he says. "So I think this is going to be very good for Sun, but not very good for users, because we've lost a competitor and the price pressure we were able to apply is going to diminish."

McDougall says six months of uncertainty is likely to be a bare minimum. It's taken until now for a clear picture of the new Compaq culture to emerge, he says. He expects more of the same with the HP/Compaq acquisition.

At least HP understands the enterprise, points out Olsson, unlike Compaq when it first merged with Digital. "That's the difference we see, that HP has been in the enterprise space for a long time. It understands it and it understands the dependence of major organisations on their critical systems," he says.

"In the old days technology was more a thorn in the side of some companies rather than a critical component," he says. "Most companies these days are totally dependent on their IT, and in the Stock Exchange for example, technology is so closely intertwined with the business that we don't actually focus on technology in its own right. It's now just part of the business and it's taken for granted. Now when these mergers occur, it immediately gets visibility from all levels of the executive office."

That kind of weight could get the two merging teams more focused on the needs of their customers than any kind of stick the average CIO might swing.

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