The planned mega-merger between Hewlett-Packard Co. and Compaq Computer Corp. presents Dell Computer Corp. with "more of an opportunity" than a threat, Dell's chairman and chief executive officer boasted Wednesday.
Michael Dell used his keynote address at the end of his company's DirectConnect one-day user conference to answer questions from customers about recent announcements and to crow about Dell's competitive strength. In response to a query about whether Compaq's planned merger with HP threatens his own company, Dell citied what he termed the industry's "interesting set of reactions" to the deal.
He seized on Compaq's sharp year-over-year decline in PC shipments, announced yesterday during the company's third-quarter financial report, and on the billions in market capitalization that the two companies have lost since they announced their intention to merge. "Somebody isn't happy. I'll give you a hint: It isn't us," Dell said. "The track record on these large mergers and consolidations is not good. We see it as more of an opportunity for us than a risk."
In a presentation laced with prerecorded testimonials from users, the Dell chief took advantage of a host of metrics to argue that despite a slumping PC market, Dell is organizationally strong and generating sales growth. He also addressed audience queries about the company's Windows XP plans, and about its recently announced alliance with storage vendor EMC Corp.
Dell is on a panel of chief executives scheduled to speak tomorrow before Bill Gates' keynote at the Windows XP launch event. He said his company expects to soon have 20,000 internal Windows XP users. Among customers, Dell anticipates faster adoption in the consumer arena than in the enterprise market.
"We believe XP will immediately reach -- in fact, it has already reached -- double-digit penetration in the consumer space," he said. "Business adoption will take a different path. I believe companies that just moved to Windows 2000 are unlikely to run to XP."
Regarding EMC, Dell ducked a question about whether customers can expect the same level of discounting on the newly cobranded Clariion products that they've come to expect on Dell's own products.
"I think you can expect we'll be as aggressive as we've always been," Dell said. "I don't have any pricing details to give you today, but you can rest assured we'll be aggressive in our pricing."