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HP Buys Compaq

timothy posted more than 12 years ago | from the 25-billion-dollars dept.

News 759

MaxVlast was the first to report: "The New York Times is reporting that HP is buying Compaq to form the second-largest computer company (after IBM). Wow."

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Holy Cow (1)

andrewjnr (90426) | more than 12 years ago | (#2249666)

Is this for real?

Me and a friend of mine were just talking about the differences between the two companies... Trippy...

Re:Holy Cow (-1, Redundant)

INicheI (513673) | more than 12 years ago | (#2249757)

Yeah, this is really unusual.

NY Times register != TRUE (1)

fintler (140604) | more than 12 years ago | (#2249668)

If you don't want to register just go to http://archive.nytimes.com/2001/09/01/technology/0 1WEB.html ..you know the drill ppl.

Good or bad... (1)

NotAnotherReboot (262125) | more than 12 years ago | (#2249671)

Either this will make a huge company that will struggle just like both companies are doing now or suddenly they'll dominate.

I'm betting they'll lose billions their first year.

I wonder what they'll call it.

Re:What they'll call it (2, Offtopic)

Atrax (249401) | more than 12 years ago | (#2249716)

Hewpaq Compardlett

obviously

Re:What they'll call it (0, Flamebait)

psychalgia (457201) | more than 12 years ago | (#2249752)

ha, thats good, how about "Hewlett packcrap? It doesnt matter, its all crap ;)

Another potential one (1)

Atrax (249401) | more than 12 years ago | (#2249814)

http://www.anagramgenius.com/server.html

Crap! Kept mad Coq wealth

(ok, I had to tweak it around the 'q')

HPaq of course (1)

Penguinoflight (517245) | more than 12 years ago | (#2249784)

That or just go as HP, that might be the wiser choice, who knows.

WHAT? (2)

CMiYC (6473) | more than 12 years ago | (#2249673)

Could someone with an account please post the article. I'm a bit shocked. I figured with Carly at the helm, HP wouldn't do anything worth shit. I just can't imagine them having enough money for this....

Re:WHAT? (0, Redundant)

slewis (200942) | more than 12 years ago | (#2249684)

http://archive.nytimes.com/2001/09/04/business/04D EAL.html

just replace the www with archive in nytimes urls and you'll get through

Re:WHAT? (0, Redundant)

OverCode@work (196386) | more than 12 years ago | (#2249715)

http://archive.nytimes.com/2001/09/04/business/04D EAL.html

Just replace www with archive.

-John

Re:WHAT? (-1, Redundant)

ASCIIMan (47627) | more than 12 years ago | (#2249732)

Hewlett-Packard to Acquire Compaq in $25 Billion Deal

By ANDREW ROSS SORKIN and FLOYD NORRIS

Hewlett-Packard will announce today that it is acquiring Compaq Computer for $25 billion in stock in a bold move to grow as the computer business struggles with shrinking sales, executives close to the negotiations said last night.

The merger, if completed, would produce a company with total revenue only slightly less than those of I.B.M., the largest computer company. But both Hewlett-Packard and Compaq have recently seen revenues slide and profits plunge because of a computer industry slowdown, and both have announced job cuts.

For Carleton S. Fiorina, who became chief executive of Hewlett- Packard in 1999 when she was hired away from Lucent Technologies, the acquisition amounts to a renewed bet on the computer business and particularly a new operating system for computer servers that was developed by Intel and Hewlett-Packard. Compaq is the other large company that has announced it plans to use that technology, which will compete with technologies developed by Sun Microsystems and I.B.M.

Late last year, Hewlett-Packard had tried to move in a different direction that emphasized services by acquiring the consulting operations of PricewaterhouseCoopers, the large accounting firm. But that plan fell apart as Hewlett's stock price declined.

Compaq, which is based in Houston, began in 1982 as a maker of personal computers. It became a phenomenal success in its first 15 years but has stumbled more recently amid severe price wars in personal computers. Its 1998 acquisition of Digital Equipment, itself once the second-largest computer maker, has not been viewed as a great success.

Investors in both Compaq and Hewlett-Packard have suffered in the current decline in technology stocks, although Compaq's woes have taken a greater toll. That stock is down 76 percent from its peak, reached in early 1999, while Hewlett- Packard is off 66 percent from its peak, reached last summer.

While the executives involved in the talks said that an agreement had been reached that provided for Hewlett-Packard to acquire Compaq, exact terms of the offer were not disclosed. They said, however, that a premium is being offered for Compaq's stock, which closed Friday at $12.35, down 34 cents, while Hewlett- Packard shares fell 19 cents to $23.21.

The executives said that Ms. Fiorina would become chairman and chief executive of the combined company, which will be based in Hewlett- Packard's home town of Palo Alto, Calif., while Michael D. Capellas, Compaq's chairman and chief executive, will become president.

Spokesmen for both companies declined to comment last night.

When announced job reductions, of 8,500 jobs at Compaq and 9,000 at Hewlett-Packard, are completed, employment at the companies will be about 62,800 at Compaq and 87,000 at Hewlett-Packard. Further reductions seem likely, as executives said that they expect annual cost savings of $2.5 billion within several years.

In its most recent 12 months, Hewlett-Packard reported revenues of $47 billion, while Compaq had revenues of $40 billion. The combined $87 billion is close to the $90 billion reported by I.B.M., and far above the $33 billion for Dell Computer, which now ranks fourth and would move to third if the merger is completed.

In its most recent financial report, for the nine months through July, Hewlett-Packard said its revenues were down 5 percent from the comparable period a year earlier, to $33.7 billion. But its net income fell 82 percent to $506 million. Compaq, reporting on the six months through June, said revenues fell 13 percent to $14.2 billion. It suffered a net loss of $201 million for the period, compared with a profit of $684 million in the same period of 2000.

Compaq had hoped that Digital Equipment technology would provide it with a competitive edge in new generations of computer servers. But it recently chose to not use that technology and instead go with the technology developed by Hewlett-Packard and Intel.

Both Hewlett-Packard and Compaq have been hurt by price wars in personal computers, where it has been difficult for makers to differentiate themselves when all except Apple Computer are offering operating systems from Microsoft.

Many in the industry hope that the trend toward decentralized computing, in which great computing power migrated to desktops in homes and offices, will reverse itself as a new Internet-based system uses racks and racks of powerful computers known as servers whose computing power will be called on by computers and cellular phones around the world. If that vision is realized, then a major battle looms over which maker of servers is able to gain a dominant position.

No need to POST the article.... (5, Informative)

warpeightbot (19472) | more than 12 years ago | (#2249826)

Jeez, people, how hard is it to replace "www" with "archives"?

http://archives.nytimes.com/2001/09/04/business/04 DEAL.html [nytimes.com]

Yeah, I know, Taco won't change'em so NYT won't bust his chops, but they're gonna bust us all bigtime if we keep swiping their articles straight up... Just right-click, copy link location, paste into new window, make the appropriate edit, and fsck'em. After all, it's not like you were gonna feed'em real marketing data anyway.... right?

--
You need a Linux guru. [speakeasy.net]

Hmm... (0, Flamebait)

avalys (221114) | more than 12 years ago | (#2249674)

Great - now there's only one brand of cheap, crappy computers on the market.

Re:Hmm... (0, Offtopic)

ahknight (128958) | more than 12 years ago | (#2249685)

Nahh, there's still Gateway.

Re:Hmm... (0, Offtopic)

fred911 (83970) | more than 12 years ago | (#2249771)

And.. Dell

Will HP support linux like Compaq has? (1)

John2583 (302168) | more than 12 years ago | (#2249676)

Let's hope so, that would be another huge computer company that is supporting linux!!

Re:Will HP support linux like Compaq has? (0)

Anonymous Coward | more than 12 years ago | (#2249739)

in some ways it's the other way around...

hp's making their own linux distro (debian based), for their hardware

Re:Will HP support linux like Compaq has? (2)

gengee (124713) | more than 12 years ago | (#2249744)

Welp, with Bruce Perens whispering in Carly's ear, I suspect they will:)

Yes, read this (1)

Ghoser777 (113623) | more than 12 years ago | (#2249828)

Look at this: Linux Evangelist [hp.com]

And there's a nice picture of Tux on HP's webpage.

F-bacher

Will the new company be called HC... (2)

quintessent (197518) | more than 12 years ago | (#2249679)

For Hewlett Compaqard?

A Hardware monopoly? (3, Interesting)

os2fan (254461) | more than 12 years ago | (#2249680)

Maybe we might end up with a hardware monopoly to rival Microsoft - aka IBM's PS/2 architecture.

What happens if HP and Microsoft fight ... HP are already on record as saying they would go elsewhere if they could ...

Re:A Hardware monopoly? (1)

papa248 (85646) | more than 12 years ago | (#2249820)

Possibly... but lets hope we can stay away from MCA-like blunders.

Re:A Hardware monopoly? (2)

garcia (6573) | more than 12 years ago | (#2249837)

I think that the key phrase is "if they could".

I highly doubt that this merger could force anyone into using something other than Windows.

Get real.

i'm so happy about this, i'm gonna.... (-1, Offtopic)

Anonymous Coward | more than 12 years ago | (#2249681)

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+* j a c k * o f f * j a c k * o f f * j a c k * o f f *+

* Important Stuff: Please try to keep posts on topic. * Try to reply to other people comments instead of starting new threads. * Read other people's messages before posting your own to avoid simply duplicating what has already been said. * Use a clear subject that describes what your message is about. * Offtopic, Inflammatory, Inappropriate, Illegal, or Offensive comments might be moderated. (You can read everything, even moderated posts, by adjusting your threshold on the User Preferences Page) Problems regarding accounts or comment posting should be sent to CowboyNeal.

Holy crap. (0)

smoon (16873) | more than 12 years ago | (#2249682)

Subject says it all...

Wow. (2)

ASCIIMan (47627) | more than 12 years ago | (#2249683)

Thought the first: Is bigger always better?

Thought the second: HP and Compaq are both really awesome companies (if you exclude their home computer divisions). This is cool.

Interesting... (3, Interesting)

CMcTortoise (246171) | more than 12 years ago | (#2249687)

I was discussing this with my parents a few days ago:

Gateway is apparently in the hole because they don't offer much "unique" and with computer sales allegedly having a bad forecast, this doesn't leave much room for competition: Dell, IBM, and now "HP/Compaq" are here to stay.

Can we expect to see more mergers, or what's the deal? With computer "builders," we don't really suffer from the lack of standards, interoperability, etc. that we see in harware/software...so are these mergers really helping consumers or just gaging the diersity of merchants?

Re:Interesting... (1)

CheechBG (247105) | more than 12 years ago | (#2249835)

Gateway is apparently in the hole because they don't offer much "unique" and with computer sales allegedly having a bad forecast, this doesn't leave much room for competition: Dell, IBM, and now "HP/Compaq" are here to stay

No, Gateway is in the hole because of the whole OfficeMax venture failing miserably. Weitzen somehow didn't see beforehand that OMax wasn't moving many systems to begin with, having a Gateway Country there wasn't going to do a whole lot of good. Plus, Weitzen by himself was a HORRIBLE CEO and manager, some of the policies he instated were mind-boggling, and definately anti-consumer. Now that Waitt is back in command, I think Gateway will pull through.

Re:Interesting... (3, Insightful)

iso (87585) | more than 12 years ago | (#2249840)

When it comes to marketing a product the main goal is to differentiate your product from your competitors. In the case of PC manufacturers, this is extremely difficult, as there's a lot of competition and everybody uses the same standard parts. Tech support, bundled software and brandname works to differentiate between "mom & pop" assembled computers but between "big-name" manufacturers there really isn't much difference (i.e. as you mentioned, Gateway is pretty much screwed). Interestingly enough this article singled out Apple as the only company that can truly differentiate themselves from the pack.

As we all know, the PC market is quite saturated. Most people who are going to buy a PC have bought one and PC manufacturers are now almostly completely reliant on upgrades to existing computers to drive sales. In this kind of a market differentiation is going to be important; the question is, how are they going to do it? Since Microsoft really isn't going anywhere it's quite likely that it'll be in the form of proprietary hardware. While a manufacturer can get a better volume discount on generic parts, gross margins on more custom hardware are much higher. witness the 20%+ margins of laptops compared to the razor thin margins of desktop PCs.

Compaq has already started on this trend with some of thier iPaq line [compaq.com] and I think we'll see more of this in the future. In the current industry climate the small guys (like Gateway) aren't going to last long and it seems that mergers are the key to success. With only a few "big name" PC vendors out there it will be a lot easier to push proprietary hardware than it was in the days of the PS/2.

As long as "standard" hardware can still be purchases then it won't affect the geeks much, but let's just hope that standard PC hardware is still supported at large. I'd hate to see the latest and greatest hard drives, RAM or video cards only supporting IBM or HP motherboards. Mergers the size of this one bring us a lot closer to the possibility of a much more closed PC market.

- j

Either this is a troll.. (1)

-ryan (115102) | more than 12 years ago | (#2249688)

... or I'm mistakenly reading Segfault [segfault.org] .

...so are they changing the corporate name to... (5, Funny)

jdbo (35629) | more than 12 years ago | (#2249691)

Hewlett Paqard?

...c'mon, _someone_ was gonna say it...

Only one merger away from.. (1)

mhelie (83207) | more than 12 years ago | (#2249748)

Hewlett Compacqard Bell.

No, no, no... (2)

jht (5006) | more than 12 years ago | (#2249817)

[drumroll]

It's going to be "GNU/Hewlett Paquard"!

[/drumroll]

It should be GNU/Hewlett Paquard (0)

Anonymous Coward | more than 12 years ago | (#2249827)

They use GNU tools over at HP, too. I'm sick and tired of people not giving credit where credit is due!

Hate to say, sounds like a dot-bomb strategy... (5, Insightful)

AtariDatacenter (31657) | more than 12 years ago | (#2249693)

If I remember correctly, Compaq had eaten up a lot itself. Didn't it do Tandem (high end corporate mainframe like machines) and whoever did the Alpha (Digital, right)? I don't see how those have really grown, but maybe they've got some eye on some of Tandem's technologies for their midrange line. But you'd have to think that Compaq has a bit of indigestion from it.

Now, here comes HP, buying up Compaq? Well, at least Alpha/Tandem seems like a better fit for HP than it ever did for Compaq.

Anyhow, it seems like HP is picking up a LOT of baggage that they're going to end up throwing away. Sounds like an awfully risky business venture.

With this one, I'd have to say that Fiorina has some balls

Re:Hate to say, sounds like a dot-bomb strategy... (1)

2ms (232331) | more than 12 years ago | (#2249767)

Alpha's already gone to Intel.

Ravages of the new economy (5, Insightful)

Carnage4Life (106069) | more than 12 years ago | (#2249695)

I just checked out the article [nytimes.com] and was struck by how negative the articles in the Related News link were:
  • Hewlett-Packard to Cut 6,000 Jobs (July 27, 2001)
  • Compaq's Revenue and Income Fall (July 26, 2001)
  • Hewlett Profit Falls but Beats Expectations (August 17, 2001)
  • Compaq to Emphasize Computer Services (July 17, 2001)
  • Market Place: Compaq Announces More Layoffs (July 11, 2001)
Big time mergers are usually between successful companies or at least where one of the companies is having a particular successful run, this looks like a merger of companies are both fucked. Also considering the amount of overlap in their products, expect more layoffs.

Sad, indeed.

sounds like a job for www.fuckedcompany.com (0)

Anonymous Coward | more than 12 years ago | (#2249747)

Get ready for more HP articles at www.fuckedcompany.com [fuckedcompany.com] . This is going to push HP over the cliff.

On a related note, and this is dead serious, there is a Slashdot article on fuckedcompany right now. They say the following is FALSE:

Apparently Slashdot website creator, Rob "CmdrTaco" Malda, was rushed to the hospital this afternoon after having his penis cut off."

Very odd. No. I didn't make this up. Follow the link.

Re:Ravages of the new economy (4, Insightful)

madburn (35976) | more than 12 years ago | (#2249802)

...this looks like a merger of companies [that] are both fucked. Also considering the amount of overlap in their products, expect more layoffs.
This smells a lot like the "mating dinosaurs" of the 70s-80s, such as when Sperry Univac and Burroughs merged into Unisys. Interestingly enough Unisys survives primarily via perpetual government contracts, and a big part of Compaq's business comes from selling their mediocre and expensive hardware to governments.

Re:Ravages of the new economy (3, Informative)

Anonymous Coward | more than 12 years ago | (#2249839)

this looks like a merger of companies are both fucked.

Yup, it's consolidation in a stagnant market, although it doesn't nessararily look horrible.

HP gets:
1) Strong x86 server presence.
2) Very large PC customer list (although I doubt there's much money there)
3) Digital's consulting group
4) VMS, which will probably avoid death for another 10 years

Which fills the gaps HP is missing as 2nd tier x86 provider (behind IBM and Dell) without much of a NT consulting division to speak of. When Itanium gets up to speed, they'll be in position to offer almost complete end-to-end services, which is complete crucial because corporations tend to ousource like crazy during a recession.

The only question is which UNIX gets a bullet in the head. My guess is Tru64.

Holy shit. (-1, Redundant)

Anonymous Coward | more than 12 years ago | (#2249700)

That's fscking unbelievable.

oh no... (5, Funny)

spacefem (443435) | more than 12 years ago | (#2249703)

How will they combine PC color schemes? Rose! Pink! Disaster!

Why is it always the NYT? (0, Offtopic)

Atrax (249401) | more than 12 years ago | (#2249706)

Can't you guys look into sources that don't require registration??

Re:Why is it always the NYT? (0, Redundant)

Great_Jehovah (3984) | more than 12 years ago | (#2249733)

Subscriber Id: subscriberid
Password: password

Re:Why is it always the NYT? (0, Offtopic)

Atrax (249401) | more than 12 years ago | (#2249740)

I think you missed the point.

Re:Why is it always the NYT? (0, Offtopic)

MavEtJu (241979) | more than 12 years ago | (#2249763)

As being asked by somebody who is registrered on slashdot as... Atrax

Re:Why is it always the NYT? (0, Offtopic)

Atrax (249401) | more than 12 years ago | (#2249833)

So I trust Slashdot more. so what?

oh. I see...

;-)

j

Re:Why is it always the NYT? (-1, Offtopic)

Anonymous Coward | more than 12 years ago | (#2249831)

Is your time THAT important that you can't spend a couple minutes to register. Is it really that hard? Just do it, and then you won't have to post a thread complaining about it everytime Slashdot posts an article from the NY Times.

iPaq/Jornada (1)

bnitsua (72438) | more than 12 years ago | (#2249707)

I wonder what HP will do with the iPaq, as they have the rival Jornada.
Integration between the two seems unlikely, so either elimination or discontinuation are plausible. That is bad news for iPaq, but good news for the rest in the PDA market (Handspring, Palm), as it is one less competitor to watch after.

Good news for competition? (1)

Penguinoflight (517245) | more than 12 years ago | (#2249818)

Personally I kinda see it the opposite, the technology from both of them will probably be merged , even if they don't change names. If it's a matter of big company loyalty, they could just put different stickers on each one :-)

This Could be Bad (1)

iCharles (242580) | more than 12 years ago | (#2249708)

You know, I've never thought much of HP's support. I've called about an issue,and they ask, "What sort of RAM." If it's not HP branded RAM, they won't talk to you. There servers look cheap, and are put together poorly. They do goofy things to standard (reference DLT1), and, well, are cheesy.

Compaq's support is better, and they seem to have their act more together when it comes to high end technologies (clustering, Data Center Server, etc.). Still, it leaves something to be desired relative to other vendors.

Hopefully, this merger will mean that Compaq's server line takes over HP's NetServer, and not the other way around!

HP's USB implementation (2, Offtopic)

Grishnakh (216268) | more than 12 years ago | (#2249773)

I use a HP Workstation at work that uses their 64-bit PA-RISC processors. This workstation also uses a USB keyboard and mouse. While it does seem pretty smart to move right to USB for a Unix workstation, the mouse and keyboard they provide are total crap. The keyboard is a $5 special like most companies provide with their cheapest budget computers at Wal-Mart. This is on a $40,000 workstation.

But what's really funny is how they implemented the USB interface. I had my keyboard replaced, and of course they'd only give me another one exactly like it. When the technician came to swap keyboards, he powered down the machine before removing the keyboard. I asked him why he was doing this (this workstation takes forever to boot), since USB is supposed to be hot-swap. He told me that they'd tried that before, and had destroyed several motherboards! So now that IT department has a policy of powering down workstation before changing any peripherals, even if they are supposed to be hot-swap. Apparently HP forgot to implement the hot-swapping part...

Re:This Could be Bad (2)

swordgeek (112599) | more than 12 years ago | (#2249813)

I don't know what HP servers you're using. The PA/RISC servers are beautiful boxes--bulletproof and elegant. I've never seen a Compaq (and I've seen a lot of Compaqs) that came anywhere near the same quality.

The CPU of Death and Destruction (0)

Anonymous Coward | more than 12 years ago | (#2249712)

Let's see, the Alpha has killed DEC, is almost finished with killing Compaq. Anyone want to bet how long it'll be before the Alpha kills Hewlett-Packard?

Re:The CPU of Death and Destruction (2, Interesting)

Doctor Faustus (127273) | more than 12 years ago | (#2249801)

Compaq was already dropping the Alpha in favor of Itanium. Itanium is an Intel/HP joint project (and I read about that in Byte when I was still in high school, probably when the Pentium came out about eight years ago -- something like "Intel is working on the 786 with Hewlett-Packard, and it will be a revolutionary change, so much so that they are also working on a backup design (P-IV, anyone?) in case it doesn't work").

I'd say this removes any doubt about the fate of Alpha, but HP might be hoping to incorporate some of the Alpha technology. This might also raise some anti-trust concerns, since I'd been reading (Here? Ace's Hardware?) that AMD was looking at making a dual x86/Alpha instruction-set chip to compete with Itanium. They've already licensed a couple of things. Oh, well, I suppose they could go with SPARC or PowerPC. If they went with PowerPC, that could allow for a pretty nifty PC-compatible Mac, if Motorola went along...

Implications for alpha? (4, Interesting)

alewando (854) | more than 12 years ago | (#2249717)

While Compaq hasn't done much with Alpha since it bought out Digital, there was always that hope that something new would eventually come out. Alpha was a lovely chipset for all of its thermal and pricing issues (which could've been solved by a company with more drive and fewer pitfalls than Digital/Compaq had.)

But now that HP is buying Compaq, any life that could've possibly been breathed back into Alpha is completely dissipated. HP is firmly in bed with Intel on the Itanium line (fronting cash, codevelopment, independent liscensing, etc.) Whereas Compaq hadn't had much incentive to improve Alpha, HP has exactly zero interest, since that would mean directly competing with and undermining the success of Itanium.

The polite course of action would be to release Alpha completely into the public domain, but that's a farcically utopian request. I'm just always saddened when competition is reduced and choices are constrained. Let's just hope Apple and the PPC line don't go bust in the near future, leaving us with absolutely no alternative to Intel's offerings (which are beginning to look more and more like crap as the years pass) and AMD's parallel offerings in the same architecture.

Re:Implications for alpha? (2)

gengee (124713) | more than 12 years ago | (#2249749)

Let's not forget SPARC:)

Re:Implications for alpha? (3, Informative)

Jeffrey Baker (6191) | more than 12 years ago | (#2249758)

Intel purchased non-exclusive intellectual property rights to the Alpha CPU, and Compaq said previously they were killing the product line after EV7, due soon but my guess is we'll never see it. EV8 was supposed to be a realyy killer technology, but we'll definitely never see that except as bits and pieces tuen up in future Intel CPUs.

Mergers of this magnitude take a long time to gestate, so I think it is safe to say that Compaq jettisoned Alpha as a condition of the merger.

Re:Implications for alpha? (1)

fireant (24301) | more than 12 years ago | (#2249774)

Ummm... Looks like you missed this [slashdot.org] recent article. Intel has already squashed Alpha like a bug.

Re:Implications for alpha? (1)

The_Messenger (110966) | more than 12 years ago | (#2249787)

Alpha is [slashdot.org] one of Intel's offerings. And thus, sadly, it has no future.

Re:Implications for alpha? (2)

PatJensen (170806) | more than 12 years ago | (#2249796)

It would take more then Apple drowning in a bucket before PPC goes away. Apple has been selling it up, even in the bad economy.

cisco Systems is also using PowerPC chips in their new routers, plus Nintendo in their GameCubes. So that isn't going to happen.

Pat

Wither the iPaq? (0, Interesting)

sucko (257144) | more than 12 years ago | (#2249720)

What will happen to the iPaq pdas? I've seen the HP PocketPCs and they can't hold a candle to the iPaqs. Hopefully if one line has to go, it will be the HPs.

Survival of the fittest (1)

Teflon Coating (177969) | more than 12 years ago | (#2249721)

I think this could actually help turn the economy. The home pc market has become too bloated, and the way most people pick their new pc is just by the brand name they're familiar with. I hope this goes through, the market is way too crammed with too many pc makers

WTF??? (-1, Troll)

Anonymous Coward | more than 12 years ago | (#2249725)

Why just two minutes ago when I went to Frist Prost!!! in this article I got the "Nothing to see here..." BS and now there are already 22 comments here??? I DELCAIR BULLSHIT!!!! This is going to have a lot of replys too, this sucks!! I would have been so 1337 to get Frist Prost in this article. I request that I be permitted to regain Frist Prost! in this article based on these grounds, and that I may also have psycological damage for the remainder of my life as a result of this trauma.

More details (4, Insightful)

byrd77 (171150) | more than 12 years ago | (#2249727)

Pending regulatory approval, the new company will hold a 19% share of the global PC market. Dell comes in second at 13%. Also interesting HP-Compaq will hold a 37% share of the market for high-end servers. With such a 500 pound gorilla on the field, it would definitely be nice for them to emphasize Linux support.

The big loser in the deal - Lexmark. Compaq had been one of their largest customers for bundled printers.

Re:More details (1)

byrd77 (171150) | more than 12 years ago | (#2249743)

also, the Wall Street Journal puts the value of the deal at $26 billion, not 25... Must be that new math...

How does this affect ALPHA? (2)

Grishnakh (216268) | more than 12 years ago | (#2249728)

Compaq's been working a while with Intel on transitioning from the excellent Alpha processor line to Intel's unproven Itanic, er, Itanium line for their high-end systems. They even transferred a lot of Alpha engineers to Intel, who are now Intel employees, so they could work on Itanium instead. Personally, I thought all that was really stupid: Alpha is a great architecture, and has a lot of life left if they'd do improvements like moving it to a 0.13 micron process.

HP has its own 64-bit RISC processor architecture, PA-RISC, which they use in their workstations. But they've been talking about phasing this out as well (are they going to Itanium too?).

So what's HP-Compaq's new strategy going to be? Give up on competing in the 64-bit processor space, fire all their engineers, and just buy Itaniums, and become glorified computer integrators? Or will they pool what's left of their resources and concentrate on making one great 64-bit processor to compete against the UltraSPARC and Itanium?

Re:How does this affect ALPHA? (2)

garcia (6573) | more than 12 years ago | (#2249766)

yeah but DEC Alphas were way ahead of their time. Sort of reminds me of The Tucker.

Everyone is going to stick w/what they feel comfortable w/(Windows/Intel).

I really don't see the advantage for HP in buying out Compaq. They already laid of what 6,000 employees, had pretty poor outlooks for the future (as is every tech stock, but still)

I feel that both HP and Compaq make poor computers for regular people (I have no experience w/their professional series -- but knowing what Compaq did w/their newly aquired Alpha line I could only make some assumptions that it isn't good).

I say boo to this. Should have kept the fucking employees rather than wanting to save money to spend $25 billion on this.

Re:How does this affect ALPHA? (1)

demon (1039) | more than 12 years ago | (#2249779)

Well, seeing as Compaq was, last I'd heard, basically burying the Alpha architecture because buddy-buddy Intel wants to push their new IA64 architecture. And considering HP was a codeveloper on the IA64 design, I'm sure they will be interested in pimping it as well. I think we'd all better bid our fond farewells to the Alpha - I doubt anything can save it now.

they say cut back, we say FIGHT BACK! (2, Flamebait)

perdida (251676) | more than 12 years ago | (#2249729)

When announced job reductions, of 8,500 jobs at Compaq and 9,000 at Hewlett-Packard, are completed, employment at the companies will be about 62,800 at Compaq and 87,000 at Hewlett-Packard. Further reductions seem likely, as executives said that they expect annual cost savings of $2.5 billion within several years.

In its most recent 12 months, Hewlett-Packard reported revenues of $47 billion, while Compaq had revenues of $40 billion. The combined $87 billion is close to the $90 billion reported by I.B.M., and far above the $33 billion for Dell Computer, which now ranks fourth and would move to third if the merger is completed.

In its most recent financial report, for the nine months through July, Hewlett-Packard said its revenues were down 5 percent from the comparable period a year earlier, to $33.7 billion. But its net income fell 82 percent to $506 million. Compaq, reporting on the six months through June, said revenues fell 13 percent to $14.2 billion. It suffered a net loss of $201 million for the period, compared with a profit of $684 million in the same period of 2000.


I will not ever sit back and haplessly allow my company to abandon the things that make it unique, the individuals that have brought it to where it is, in order to pursue stupid figures such as yearly profit.

Just because there is an 'economic down turn' does not mean that, for the next FIVE YEARS (not three months or one year or next week, as the rapidly changing investors' markets focus on)HP won't be pioneering in quality, reliable computer technology. As someone who actually gives a shit about the future of companies that produce products that I like, I refuse to believe that the stock market's logic can positively affect these companies.

Short term profit goals must be met in a modern investment climate. HP and Compaq merged to save money, but they will wind up cutting the very things that make them unique and separate products in order to save money.

Compaq and HP merging is like Kia and Saab merging. HP computers kick so much ass, and last for such a long time

I have an ancient HP Vectra VL2 downstairs that still carries its own weight in my household. What parts of shitty Compaq will they be using in HPs now?

Parts of hardware? Parts of support?

I don't really care one whit about the existence of Compaq or not, and I can't see any benefit from HP having a larger cashflow, except for to the stupid stock market, which has nothing to do with the basic economic dynamic of a company producing a product to please its customers.

links to archive suck (-1, Redundant)

Anonymous Coward | more than 12 years ago | (#2249730)

ac-ness to show I am not a karma whore

Hewlett-Packard to Acquire Compaq in $25 Billion Deal

By ANDREW ROSS SORKIN and FLOYD NORRIS

Hewlett-Packard will announce today that it is acquiring Compaq Computer for $25 billion in stock in a bold move to grow as the computer business struggles with shrinking sales, executives close to the negotiations said last night.

The merger, if completed, would produce a company with total revenue only slightly less than those of I.B.M., the largest computer company. But both Hewlett-Packard and Compaq have recently seen revenues slide and profits plunge because of a computer industry slowdown, and both have announced job cuts.

For Carleton S. Fiorina, who became chief executive of Hewlett- Packard in 1999 when she was hired away from Lucent Technologies, the acquisition amounts to a renewed bet on the computer business and particularly a new operating system for computer servers that was developed by Intel and Hewlett-Packard. Compaq is the other large company that has announced it plans to use that technology, which will compete with technologies developed by Sun Microsystems and I.B.M.

Late last year, Hewlett-Packard had tried to move in a different direction that emphasized services by acquiring the consulting operations of PricewaterhouseCoopers, the large accounting firm. But that plan fell apart as Hewlett's stock price declined.

Compaq, which is based in Houston, began in 1982 as a maker of personal computers. It became a phenomenal success in its first 15 years but has stumbled more recently amid severe price wars in personal computers. Its 1998 acquisition of Digital Equipment, itself once the second-largest computer maker, has not been viewed as a great success.

Investors in both Compaq and Hewlett-Packard have suffered in the current decline in technology stocks, although Compaq's woes have taken a greater toll. That stock is down 76 percent from its peak, reached in early 1999, while Hewlett- Packard is off 66 percent from its peak, reached last summer.

While the executives involved in the talks said that an agreement had been reached that provided for Hewlett-Packard to acquire Compaq, exact terms of the offer were not disclosed. They said, however, that a premium is being offered for Compaq's stock, which closed Friday at $12.35, down 34 cents, while Hewlett- Packard shares fell 19 cents to $23.21.

The executives said that Ms. Fiorina would become chairman and chief executive of the combined company, which will be based in Hewlett- Packard's home town of Palo Alto, Calif., while Michael D. Capellas, Compaq's chairman and chief executive, will become president.

Spokesmen for both companies declined to comment last night.

When announced job reductions, of 8,500 jobs at Compaq and 9,000 at Hewlett-Packard, are completed, employment at the companies will be about 62,800 at Compaq and 87,000 at Hewlett-Packard. Further reductions seem likely, as executives said that they expect annual cost savings of $2.5 billion within several years.

In its most recent 12 months, Hewlett-Packard reported revenues of $47 billion, while Compaq had revenues of $40 billion. The combined $87 billion is close to the $90 billion reported by I.B.M., and far above the $33 billion for Dell Computer, which now ranks fourth and would move to third if the merger is completed.

In its most recent financial report, for the nine months through July, Hewlett-Packard said its revenues were down 5 percent from the comparable period a year earlier, to $33.7 billion. But its net income fell 82 percent to $506 million. Compaq, reporting on the six months through June, said revenues fell 13 percent to $14.2 billion. It suffered a net loss of $201 million for the period, compared with a profit of $684 million in the same period of 2000.

Compaq had hoped that Digital Equipment technology would provide it with a competitive edge in new generations of computer servers. But it recently chose to not use that technology and instead go with the technology developed by Hewlett-Packard and Intel.

Both Hewlett-Packard and Compaq have been hurt by price wars in personal computers, where it has been difficult for makers to differentiate themselves when all except Apple Computer are offering operating systems from Microsoft.

Many in the industry hope that the trend toward decentralized computing, in which great computing power migrated to desktops in homes and offices, will reverse itself as a new Internet-based system uses racks and racks of powerful computers known as servers whose computing power will be called on by computers and cellular phones around the world. If that vision is realized, then a major battle looms over which maker of servers is able to gain a dominant position.

More layoffs expected (5, Informative)

Animats (122034) | more than 12 years ago | (#2249736)

HP and Compaq both have extensive operations in Silicon Valley. The Compaq operations are mostly left over from DEC's west coast research labs. There's considerable duplication; for example, both Compaq and HP have their own CPU design groups, and their own flavors of UNIX.


And this is after HP laid of 6,000 people in July.

FASP! (-1)

Ralph JewHater Nader (450769) | more than 12 years ago | (#2249737)

Surely this will establish a new Church of Zion, with all the money involved.

Why link to NY times when you have Yahoo? (2, Informative)

frleong (241095) | more than 12 years ago | (#2249738)

Hewlett-Packard to Buy Rival Compaq -NYT [yahoo.com]

Check the above link to read about this merger...

64-bit architecture (5, Interesting)

chill (34294) | more than 12 years ago | (#2249746)

This means HP will inherit the Alpha processor. They already have the PA/RISC and are "co-developing" some of the IA-64 line with Intel. They also inherit cool products like the Itsy and the iPaq.

Linux is the only OS that will run on their entire architecture: Alpha, PA/RISC, IA-64 and x86. They sell machines with all of the above processors.

The makes a "Big 3" of Unix vendors: IBM, Sun, HP/Compaq.

SCO was acquired by Caldera, but they, along with all the other Linux vendors, are wannabes next to that bunch.

Unless I am missing someone, that really only leaves SGI as the remaining "big" Unix vendor. I wonder if they are going to be bought; wither-and-die; or if they can make a go of it alone.

Re:64-bit architecture (4, Insightful)

PatJensen (170806) | more than 12 years ago | (#2249760)

Don't forget Apple, who will have more Unix desktops deployed then all three in another few years. (Specualation and opinion, but I'm open for flamage anyways. )

Enjoy your holiday. This merger is cool news for an otherwise boring news-less day.

Pat

Re:64-bit architecture (0)

Anonymous Coward | more than 12 years ago | (#2249778)

PA/RISC is dead. HP has said so. They're only going for MHZ increases over the next few years, then it is end of life. Dead. You can expect the same for Alpha. HP has placed a 'big bet' on the (occasionally renamed) "Itanic" processor.

Re:64-bit architecture (1)

chill (34294) | more than 12 years ago | (#2249808)

That's what I though. If I remember correctly, Compaq already announced the planned EOL of the Alpha.

Chip consolidation -- Intel, Sparc, PowerPC. Is MIPS still around other than embedded systems?

Pardon my excitement, but (5, Informative)

The_Messenger (110966) | more than 12 years ago | (#2249754)

Holy fucking shit this is big news. It would have been bigger news if Alpha was still viable, but... wow. Two of the top five desktop PC/x86 server manufacturers are now one. Both have (or once had) established positions in the RISC market, both sell UNIX, and both support GNU/Linux.

The most immediate impact I predict is in PC sales. I've always had the impression that Compaq did much better in this market than HP, and ignoring the fact that all Compaq PCs now are HP PCs ;-), there's now one less choice for Joe Average Consumer. I haven't been to a non-online computer reseller in years, but IIRC places like CompUSA had very few brands -- Compaq, HP, Toshiba, and maybe some Macs. Dell and IBM only sell direct, right?

I only hope that HP is nicer to Compaq than Compaq was to DEC. :-0

Shocking (5, Insightful)

mikethegeek (257172) | more than 12 years ago | (#2249756)

I'm amazed... wow!

However, I think it's bad that HP is buying Compaq, instead of the other way around... I've never been impressed with HP's products (other than printers, which are the best), particularly their servers or workstations.

I've always preferred Compaq's to theirs. It will be sad to see the end of the Deskpro workstations and ProLiant servers, which were always a pleasure to install, set up, and even repair. I've had to replace several customer's paper-thin motherboards in HP NetServers... Compaq servers are built to Millspec, like most of the IBM servers. HP's are more plastic and flash, much like Dell servers.

Ms. Fiorna has pretty much led HP down to ruin since jumping off Lucent just before THEY went to ruin, so entrusting her to lead this new beast may be a shaky proposition. I don't really see how swallowing Compaq will really gain HP anything new, as the only really interesting technology Compaq had (Alpha) they've pretty much given away. I see this as HP gaining a lot of overhead, a lot of revenue, but little in the way of additional profit, as Compaq has the very same market problems HP did.

Looks to me like the only REAL gain HP makes is getting a MAJOR competitor out odf the way...

Changing Dynamics for Everyone (2, Insightful)

standards (461431) | more than 12 years ago | (#2249762)

Compaq snapped up Digital a couple years back. Digital had a ton of industry intellectual property... probably more than anyone other than IBM. Networking, CPU design & fabrication, Relational DB, clustering, DASD, Messaging, etc etc.

Compaq couldn't really do much with it, and sold much of it off to Oracle, Intel, Cisco, etc ...

But not everything was sold to the high bidder. Some of it stayed within the corners of Compaq, waiting for a brighter day.

HP's culture certainly could benefit from much of that technology, and it's far more likely that HP can leverage some of technology to propell itself into IBM's datacenter space.

But the HP deal could weaken Linux a little bit, because HP isn't as much of a Linux advocate as IBM, and is an Intel/Microsoft partner & advocate (unlike Sun).

So, in the end, this deal could help Microsoft and hurt Linux.

Obigatory no-registration link (0)

Anonymous Coward | more than 12 years ago | (#2249765)

here [nytimes.com]

Note that if you replace "www.nytimes.com" with "archives.nytimes.com" in any NY Times link you always get the article without having to register.

(Posting as AC so not as to be accused of being a karma whore . . .)

I can actually read the NYTimes now! (-1, Offtopic)

Anonymous Coward | more than 12 years ago | (#2249769)

[anthony@localhost anthony]$ su -
Password:
bash# echo "208.48.26.212 www.nytimes.com nytimes" >> /etc/hosts
bash# logout
[anthony@localhost anthony]$

And in a suprise move... (1, Funny)

NoMoreNicksLeft (516230) | more than 12 years ago | (#2249772)

IBM completes a hostile takeover attempt on the newly created Hewlett Compaq, this just 72 hours after buying Gateway outright, in a leveraged stock and options deal. Industry analysts expect that the eventual hyper-merger, to create a single corporate entity (Unicorp), will take less than 24 months at this pace. With the financial industry consolidated last week into "Unibank, the World's Favorite Bank", this editor believes that 24 months is a serious overestimate.

Why? (2)

nougatmachine (445974) | more than 12 years ago | (#2249781)

After my initial reaction, namely being shocked by imagining how huge this company will be, I started to think about it. We have two struggling computer companies spending a whole buttload of cash to become one BIG struggling company. How does this help profits at all?

I'm not a businessman, surely someone around here can enlighten me.

Compaq ruined Digital (1, Interesting)

Anonymous Coward | more than 12 years ago | (#2249782)

Compaq destroyed Digital. HP will destroy Compaq. This is not good for anyone.

TruHP Unix (2, Funny)

andkaha (79865) | more than 12 years ago | (#2249785)

I hope they won't rename OSF / Digital Unix / Tru64 again!

Very few mergers succeed. Combine two weaklings.. (5, Insightful)

sphealey (2855) | more than 12 years ago | (#2249789)

Very few mergers succeed, even when there does appear to be some legitimate synergy or corporate fit. On paper it made a lot of sense to combine Chrylser and Daimler. In practice, the two cultures were so different that they seem bent on destroying each other rather than making the combined company better.

Now Carly is going to take two companies, each weakened by current economic conditions, and combine them. Where exactly is the synergy? Two manufacturing organizations, neither the lowest cost nor highest quality in their market, and both in thrall to Intel? That's a good combination.

And so on down the line. Synergy is vastly overrated when it EXISTS, and I have a hard time seeing any hear. Doubling the size of the Titanic would only have caused it to sink twice as fast!

sPh

Is bigger better? (1)

sasha328 (203458) | more than 12 years ago | (#2249795)

Let's see. These companies grew fro acquisition, and I leave the impact/advantages to your imagination:

AOL/NETSCAPE/Time/WarnerBrothers
Boeing/McDonnelDouglas
Compaq/Digital
Caldera/SCO

and the list goes on.

Mergers of this size inevitably lead to monopolies. An example is the aerospace defence industry. Where I comefrom (Australia) Boeing owns everything. So much for competitive tendering.

Wow! (2)

NetJunkie (56134) | more than 12 years ago | (#2249800)

This is huge. I'm a big fan of Compaq servers, but HP's x86 servers have never impressed me. I hope they incorporate a lot of Compaq's management in to their line.

Bruce Perens And Debian @ HP & Compaq (3, Interesting)

debrain (29228) | more than 12 years ago | (#2249803)

Well, I know Bruce is a regular here, and will probably have some feedback somewhere :), but I'm wondering if this will provide more corporate level exposure to Linux with the modus operandi of "challenge the executive", IIRC, in the Compaq ranks as well as the HP. The actual merging of two companies of this size is rare and hard to predict, but in the fray sometimes new ideas come up that are entertained that might not otherwise be. I am curious as to how this will affect Bruce Peren's (et al) influence on HP and Compaq, but I don't want to speculate on it.

Is this good or bad? (1)

jkott (516902) | more than 12 years ago | (#2249809)

Is this merge of companies going to be for the better, or for the worse? I honestly cannot figure this question out myself, what do you people think about it?

Admin - www.newspad.org [newspad.org]
NewsPAD - the daily news source for geeks!

Amazing (0)

Anonymous Coward | more than 12 years ago | (#2249810)

30 minutes after the news breaks, the CNN website still has sharks eating swimmers as it's top story. Hell, even Yahoo! news has it now! Looks like someone is asleep at the wheel on the CNN newsdesk tonight....

The numbers don't work (2, Interesting)

shagoth (100818) | more than 12 years ago | (#2249815)

HP has a market cap of about $1.5B, CPQ has $24B. HP will have to issue 25x their current float to make the acquistition which leads one to wonder why CPQ isn't the acquirer. It strongly suggests that CPQ is a mess.

The net result should be a collapse of both stocks in the premarket. But then i've never been able to predict these things.

As always (1, Redundant)

chabotc (22496) | more than 12 years ago | (#2249816)

use the archive.nytimes.com to view the article without reading: link [nytimes.com]

Another flamewar? (1)

nbvb (32836) | more than 12 years ago | (#2249819)

Imagine what's gonna go on in the engineering labs at HPaq....

HP-UX vs. Tru64.
NetServer vs. ProLiant.
Jornada vs. iPaq.
Deskpro vs. Vectra.
PA-RISC vs. Alpha.

Whoa.

Maybe we'll get lucky and they'll wipe each other out.

Imagine the possibilities though:

HP-UX 12i... now with DECnet!

Or Tru64 Unix... now with SAM!

Or better yet, DECclusters of HP-UX running on PA-RISC.

Since Compaq doesn't even _OWN_ the Alpha anymore!

And where does OpenVMS stand? I know most everyone here are Unix folks, but ya gotta respect VMS... it _still_ works, and _still_ runs those true mission-critical servers!

--nbvb

HP does NOT want Compaq (4, Insightful)

standards (461431) | more than 12 years ago | (#2249825)

Compaq management fucked up with the purchases of Tandem and Digital. Totally wasted billion dollar investments. Very sad.

HP made this investment for Digital and Tandem technology, and Compaq's sales and marketing. HP always had stronger datacenter service than Compaq-proper.

Compaq itself is only an interesting brand name and marketing channel. There's no way that HP keep the existing Compaq PC line going. The only advantage of HP buying Compaq is that HP now has one less competitor.

Quite a merger... (1)

leonbev (111395) | more than 12 years ago | (#2249830)

Kudos, Slashdot, you beat all of other tech news sites to the punch! No of those pesky holidays slow you guys down, do you? :)

Seriously, this merger should pose some serious competition for Dell and IBM. Once you combine the sales, a merged HP and Compaq makes the worlds largest computer hardware manufacturer. Dell and IBM, running neck and neck for 1st in overall hardware sales, now get bumped back to 2nd and 3rd.

Both HP and Compaq also had relatively small but quickly growing service consulting arms, but the combination of the two should give IBM and Accenture a rough time.

Unfortunately, neither company had a huge showing in software, so Microsoft shouldn't be TOO worried by this.
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