Storage execs divided on HP-Compaq merger

Compaq's shareholders have green-lighted the proposed merger with Hewlett-Packard. HP is predicting its own win. But, storage execs voiced a mixed-reaction to the news.

CHICAGO--In a nine-to-one vote, Compaq Computer Corp.'s, shareholders have approved a merger with Hewlett-Packard Co., and the victory that HP's chief executive predicted on Tuesday is one step closer to a reality.

It looks like the deal is done, but are end-users apprehensive about where their products will fit in a new HP-Compaq storage strategy?

There was a mixed reaction to the news among storage users at the Storage Management 2002 conference being held here this week through until Friday.

"I have a hard time seeing how the two companies are going to get together," said Bill Johnson, IT architect for Woodside Energy Ltd., Perth, Australia. "I just don't see the two companies as having the same thoughts. HP [is] based on innovation. I'm not sure the two companies will come together well."

But others have full confidence in the new company.

Julie Robards runs a 100% HP shop in her duties as IT manager for the City of Bloomington, Ill., and has no fear whatsoever that her day-to-day operations will be disrupted. Robards expects a symbiosis to occur between HP's product line and Compaq's ability to sell products.

"I'll be glad if it goes through," she said. "[HP] has great products and a great management team, but they can't market their products."

Michael Capellas, Compaq's chairman and chief executive officer said that while official certification of the results of HP's shareholder vote is still in process, Compaq is ready to deliver.

"At the end of the day, this merger is about market leadership. We are ready to move forward," Capellas stated. "We continue to believe that this merger will rapidly accelerate our strategy, improve overall earnings power and provide increased value for customers, shareholders and employees."

"While the HP shareowner vote is being certified, our team of more than 900 HP and Compaq employees continues the integration planning that will enable us to be up and running day one to benefit our customers, employees and partners," Carly Fiorina, HP's chairman and CEO said in a statement.

HP and Compaq's storage competition was quick to weigh in on the merger.

"HP has not been that much of a threat to us, Compaq has been the bigger storage threat," said EMC Corp.'s chairman Mike Ruettgers.

Ruettgers sees the merger as an opportunity for EMC to win market share. "After they get the largest merger in IT history to go through, they are going to have to eliminate 25,000 employees to make it work," he said. "Also, half of their product lines will be obsolete."

HP and Compaq have promised to make a product roadmap public once the merger is made official in the next few weeks.

Let us know what you think about the story, e-mail Kevin Komiega, assistant news editor

FOR MORE INFORMATION:

Special event coverage from Storage Management 2002 in Chicago

Product plans still pending in HP/Compaq deal

HP, Fiorina claim early victory

Get the latest on the merger vote in our Featured Topic section

Put in your two cents in our Sound Off forum

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