Dell Scores Big Compaq Customer Win

Like a circling shark, Dell is aggressively pursuing HP and Compaq customers who Dell says are vunlerable and "insecure" due to the company's proposed merger.

NEW YORK—Like a shark sensing blood in the water, Dell Computer Corp. is aggressively pursuing customers of Hewlett-Packard Co. and Compaq Computer Corp.---customers they say are "insecure" about the proposed buyout.

"They will be distracted, and are distracted now," Linda Hargrove, vice president of Dells Enterprise Systems Group, said in an interview with eWEEK on Wednesday.

Hargrove said Dell this week scored a $100 million deal with a former Compaq customer in New York, and that questions surrounding the merger played a major role in the customer making the switch. Hargrove would not name the customer or give details of the deal, but said that deal and others would be announced later this month.

Hargrove said HP and Compaq customers are worried about the future.

"Theres just a bunch of customer insecurity about what will happen next, everything from who their salesperson will be to what which products will win out," she said.

HP, of Palo Alto, Calif., and Houston-based Compaq are moving ahead in merging the two companies while awaiting an official tally of the March 19 HP shareholder vote on the controversial and proposed $20 billion buyout. The tallying could take a few more weeks.

HP and Compaq are also continuing to expand the integration team, which now stands at 1,200.

Theyre also still fighting dissident board member Walter Hewlett, who led a bitter five-month proxy battle against the deal and last month filed suit against HP, saying the company improperly pressured Deustche Bank, HPs 11th largest shareholder, into voting for the deal at the last minute.

HP has denied the accusations in the lawsuit.

Dells Hargrove worked for HP before going to Dell, of Round Rock, Texas, and is still an HP shareholder. She said she voted against the deal, saying it was bad for shareholders. However, as an employee of a competitor, Hargrove said the merger opens up a lot of opportunities for Dell and other rivals of HP and Compaq to take away customers.