Compaq-Digital Set For Bigger Byte Of Local Mart

For us it is business as usual, was Digital India chief Som Mittals reaction to the annoucement that Compaq will acquire Digital for $9.6 billion in the biggest-ever deal in the industry.

Few people would, however, agree. While some industry sources say that a lot would depend on what Compaq decides to with Digitals products, others point out that the deal could also defocus Compaq, which is known for its presence in the PC market.

Said a senior executive of Tata IBM: Compaqs acquistion will mean one less competitor for us. While Compaq gets Unix boxes and networking solutions from Digital, the latter benefits from Compaqs low-end servers. But everything depends on how they decide to combine the range.

We will have to wait and watch whether Compaq will make sure that Digitals Alpha business- now in a deadend- grows. With Compaq not yet being able to absorb theTandem products, it may have too much on its hands.

Compaq Indias Abhishek Mukherjee says it is too early to comment and that the entire merger process will take at least two-three months.

Mukherjee says: This (the merger) would complement Compaqs already strong presence in the home market and its growing presence in the small and medium enterprise segment.

Both the US companies have a major presence in India. Compaq India is a wholly owned subsidiary, while 51 per cent of Digital Equipment India Ltd is held by its US parent.

Digital is strong in accounts management , professional and consumer services and systems integration. All thses are products in a way in addition to the Alpha stations. With Tandems non-stop solutions and Compaqs leadership in consumer, portable and small and medium sector, it would complete the whole range.

Mukherjee refused comment on the effect of the merger on the employees of Digital and Compaq .

He, however, said that the way our businesses are expected to grow, we will probably be needing more people. Digital has an extremely good team of technical support staff and its professional service organisation is likely to be a boon for Compaq to service the enterprise market.

However, a section of the sales force at Digital may not find it easy to survive according to industry sources, while the professional service support personnel may move in with Compaq.

Stacy Plemmons, vice president (computer systems) Hewlett-Packard India says: I think it is wonderful from HPs perspective and we would continue its strategy in India. In India, one has to consider the possible merger from two angles. One what it would mean to a Digital customer, now that his platform is owned by an unfriendly camp (read Compaq), which does not have the energy or the capability to run two diverse businesses.

Secondly, from Compaqs standpoint it has an even bigger task on hand trying to absorb Digitals business into its own. In a sense it only affirms a strategy that HP has been following. And that is of supporting the operating system of choice to the customer on Windows NT or Unix.

Compaq, which has always been a PC company, is not sure how to move into the enterprise space. It has been unable to absorb Tandem, which it acquired last year for its Unix variety, into its family of products. Now with Digital in its stable, it will have to support Ultrix and also the third version of Unix that Digital announced it would support.