Background
The Rs 185 crore Bangalore-based Digital GlobalSoft(DGL), the erstwhile Digital Equipment India, was promoted by Digital Equipment Corporation, USA and commenced its operations in 1989 in India. It had an initial public offer in 1990. The company was initially engaged in the manufacture of supermini, mini and mainframe computers.
After the global merger of Digital Equipment with Compaq in June 1998, DGL reorganised its operations with a primary focus on becoming a global software services provider.
Compaq, which holds a 51 per cent stake in the company, accounts for about 88 per cent of its total turnover. This makes it a significant contributor to the company's revenues as a customer for its services.
The company also derives support from its parent company in enhancing its operations along with adopting the latest technology and processes, easy market access and building trust amongst its non-Compaq customer segment.
The company has five significant business units - eApplications, system engineering services, enterprise solutions, e-Infrastructure and telecom. Each of them offer a wide range of services including application management services, application re-engineering and migration, eCRM solutions & services, ERP services, network management services, electronic data interchange, VMS, web applications, wireless systems, MS centric infrastructure services and storage management systems.
The parent
Founded in 1982, Compaq Computer Corporation is a leading global provider of enterprise technology and solutions. Compaq designs, develops, manufactures and markets hardware, software, solutions and services, including industry-leading enterprise storage and computing solutions and desktop and portable personal computers that are sold in more than 200 countries. The company has a total revenue of $40 bn and earnings in excess of $1.9 bn.
Compaq and Hewlett-Packard (HP) recently announced a merger agreement to create an $87 bn global technology leader. The combined entity will be able to offer the industry's most complete set of IT products and services.
The merger is expected to generate cost synergy reaching approximately $2.5 bn annually and drive a significantly improved cost structure. Based on both the companies' last four reported fiscal quarters, the new HP would have assets of $56.4 bn, and annual operating earnings of about $3.9 bn. The shareholders of HP will have a 64 per cent stake in the new entity while Compaq's shareholders will hold 36 per cent of the equity capital.
However, since the announcement of the proposed merger earlier this fiscal, the $21 bn deal has been embroiled in various controversies. The latest reports being that the Hewletts
