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Product plans still pending in HP/Compaq deal

If the HP/Compaq merger goes through, which storage strategy and product lines will survive?

Compaq Computer Corp., Houston, Texas, and Hewlett-Packard Co., Palo Alto, Calif., have been tight-lipped about future storage products since they announced plans to merge in early September of last year.

With the vote just one week away you can still here the wind whistle when you ask about which storage strategy and product lines will survive the merger if it is approved -- and the analysts believe, despite trepidation in the industry, the merger will pass.

"My brain says it [will go] through," said Steve Duplessie, president and founder of the Enterprise Storage Group, Milford, Mass. "As soon as it's official people can get on with their [buying] decisions."

The danger, said Duplessie, is in the time it will take for a newly merged company to figure out how to become one. He said, if the merger is approved it will give the competition time to steal customers away from a HP/Compaq hybrid.

But what can storage customers expect to see in terms of products, support and services if the merger is approved? No one is sure. Both companies have declined on numerous occasions to comment on which storage products and strategies will survive and which will fall by the wayside in a combined HP-Compaq.

John Webster, senior IT analyst for Nashua, N.H.-based Illuminata Inc., said the new company's storage team has its work cut out for it in terms of staff and product overlap assuming the merger passes.

He said contentious issues will be HP's agreement with Hitachi for its XP series versus Compaq's Enterprise Virtual Array as well as HP's virtualization plans against Compaq's VersaStor product.

"Compaq StorageWorks has the stronger position versus HP in terms of market share and product breadth," Webster said. "How this will affect combined HP/Compaq customers is still unclear. [The new company] will have to address the staffing issue early and that will be key for customers to watch in the short term."

Many customers have put their storage buying decisions on hold since merger plans were first announced on Sept. 4, 2001.

"In an ideal world, I suppose I too would sit and wait," said Paul Herbst, network manager, Orillia Soldiers' Memorial Hospital, Ontario, Canada, in an interview shortly after the merger plans were announced. "Yet, I might have a difficult time explaining this to all my users who are patiently waiting for new services and new computers."

According to a recent SearchStorage poll, 50% of the respondents either said they wouldn't purchase anything from either company until the deal is finalized or would only buy products they were sure would be around after the merger. However, 39% of the respondents said they had no plans to divert from their purchasing plans saying it was business as usual. (The poll did not identify specifically HP or Compaq users.)

But with HP's and Compaq's respective shareholders voting yea or nay next week, the debate will soon be moot.

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


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