Steady as She Goes
HP-Compaq merger sailing smoothly for customers.Matt Merrick was worried. In the fall of 2001, Merrick, executive vice president of IT at The Merrick Printing Company Inc., was deep into the process of standardizing his data center on NetServer systems from Hewlett-Packard Co. HP, of Palo Alto, Calif., then announced its intent to buy Compaq Computer Corp. for about $19 billion, and, suddenly, Merrick was like many HP and Compaq customers, unsure whether the investment was for naught and whether there was going to be support for it. "At the time it happened, we were adding on multiple servers, at that point with [HP]," said Merrick, in Louisville, Ky. "I was just waiting to sit back with an iced tea and smilethen they announced this."
But after Merrick aired his concerns in an eWEEK article and in e-mail to the company, HP executives called Merrick Printing and offered to send sales representatives to answer his questions. Now Merrick, who stuck with HP, is breathing easier.
HP officials said the merger has been a boon for the company. After a grueling proxy battle with heir Walter Hewlett that was eventually settled in a Delaware courtroom, HP moved aggressively to put the new company in place, rolling out product road maps and cutting expenses as the two became one. "This was a bold move," said Jeffrey Clarke, former Compaq chief financial officer and now HP executive vice president for supply chain and customer operations. "The industry truly needed consolidation, and [HP Chairman and CEO] Carly [Fiorina] (pictured) called it." The result has been a company that is No. 1 in many markets, including Unix servers and storage. It is in a two-horse race with Dell Computer Corp. for the top spot in the PC arena and is No. 3 in services. HP officials predicted savings of $2.5 billion by the end of next year, but officials said HP has already saved $3.1 billion. The merger has given the company a better set of products and enabled HP to bid on projects that neither it nor Compaq could have before. The companys recent services win with The Procter & Gamble Co. is a good example, Clarke said. "That was a bid that neither Compaq nor HP chose to bid on before the merger," Clarke said. "It was out of our reach." For Jeff Reed, it was important getting to know the new company team that was put in place after the merger. Reed is chief technology and marketing officer at Logical Networks Inc., in Bellevue, Wash., which is HPs largest Unix and high-end storage reseller in the United States and an OpenView customer. "The biggest change to customers is the account teams," Reed said. "It was inevitable there would be a sales force reduction and account teams would be switched around. Thats a painful process, but, all in all, HP paid particular attention to that. Thats behind them now. That was the No. 1 big change." Additional reporting by Paula Musich