Compaq bought out by HP

Two companies join to rival IBM as largest IT company in the world

Well, you could knock me down with a feather. HP is to buy out Compaq, in a deal that will create an 87 billion dollar company.

Currently numbers two and three behind IBM, the two companies, which will be known as HP once they've 'merged', plan to dominate the IT market globally. Quite what it will all mean to UK consumers is interesting.

For instance, the makeup of the newly expanded company follows this layout:

• A $20 billion Imaging and Printing franchise to be led by Vyomesh Joshi, currently president, Imaging and Printing Systems, of HP. That looks to be much what's already there.
• A $29 billion Access Devices business to be led by Duane Zitzner, currently president, Computing Systems, of HP. Again, pretty much what's already there.
• A $23 billion IT Infrastructure business, encompassing servers, storage and software, to be led by Peter Blackmore, currently executive vice president, Sales and Services, of Compaq. This is where the changes look to be going to occur - Compaq's range of computers blending with HP's?
• A $15 billion Services business with approximately 65,000 employees in consulting, support and outsourcing to be led by Ann Livermore, currently president, HP Services. This looks to be somewhat expanded.

What remains to be seen is how the Compaq ranges of Servers and PCs, which have traditionally competed head-on with Hewlett-Packard's, will fare in the new entity. At this early stage, it's impossible to speculate what exactly will happen, although my gut feeling is that one of the ranges will drop all competing machines, to leave a larger, discrete range of machines. I'd expect there to be a continuing service for Compaq owners, though, with large stocks of spares and expertise held in reserve.

If that happens, then you can expect there to be a glut of bargain-basement priced Compaq machines (although there may be HP machines in there) on the market quite soon.

Overall, the next few weeks and months ought to be interesting as the buyout proceeds. We'll keep you posted!

In the meantime, the official announcement can be found here.

David Dorn