HP/COMPAQ: Officials tout merger R&D benefits

A combined Hewlett-Packard Co. and Compaq Computer Corp. would invest an estimated US$4 billion annually in research and development in several core technology areas, senior executives of both companies said yesterday during a news conference.

The discussion took place just a week before shareholders of the two companies are slated to vote for or against the merger. The voting will take place March 19 and 20.

A major portion of the research activity will be focused on enhancing existing products by taking advantage of each company's skills in areas such as high-availability clustering and nonstop computing, said Dick Lampman, HP's senior vice president of research.

In the long term, such product-oriented research should yield substantial benefits in areas ranging from printers, scanners and digital imaging products to core enterprise servers, services and storage products, he said.

In addition, the two companies plan to set up a common central research group headed by Lampman, whose mission will be to focus on advanced technologies for the future. The merger would add Compaq's four research labs to HP's seven labs.

"The big opportunity for us really is to build a stronger base of products and intellectual properties" by combining the R&D organizations of both companies, Lampman said.

With the fate of the proposed merger between the companies uncertain, the executives also used the news conference to once again hammer home the technology benefits of the controversial union.

The two companies have a range of complementary technologies that would allow a merged entity to compete far more effectively in the enterprise space, said Shane Robison, Compaq's chief technology officer.

The merger would also result in technology synergies in several key areas such as industry-standard servers, high-availability computing and storage technologies, Lampman said.

On the server side, for instance, Compaq's strength with Microsoft Corp. technologies and services complements HP's experience in the Unix market, Robison said. Similarly, Compaq's experience with fault-tolerant computing technologies would extend HP's strengths in the high-availability space, he said.

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