Man the merger lifeboats

As the river of verbiage about the proposed Hewlett-Packard Co./Compaq Computer Corp. merger flowed across the media recently, everybody floating past had a role to play. The CEOs gamely touted "synergy" and the dubious benefits of uniting two struggling companies. Industry analysts mused about layoffs and product-line consolidations. Wall Street types watched the stock prices sink.

But what did you, the enterprise customers, get to do? Watch helplessly. Wonder whom to believe. Wish you knew what was really going on. Look around for lifeboats.

In some cases, you turned to your colleagues in online communities to swap information and advice. Within 48 hours of the HP/Compaq bombshell, we had 14 forums with dozens of active postings in our Computerworld.com communities. Overall, the feeling was pessimistic. Frustration ran rampant with the failed business strategies that brought HP and Compaq to this drastic pass. "The bottom line is that one troubled company buying another troubled company simply makes one bigger troubled company," wrote one user. "You can't 'acquire' your fundamental business challenges away."

You also can't keep your top customers in the dark, which is, unfortunately, what happens in the early stages of these megamerger deals. Only one week ago, we ran a front-page story about Sabre Holdings Corp.'s US$100 million project to replace its legacy mainframe systems with Compaq's NonStop Himalaya servers. Nasty surprise, this sudden acquisition.

A Sabre spokeswoman said the merger shouldn't affect those plans, but "we'll have to have some further conversations" with Compaq, she added. I'd bet that a few hundred other major customers who just signed big checks with HP or Compaq also want to have "further conversations."

Should this merger go through, any move to drop product lines is at least a year away. But if you're a large customer with a mission-critical stake in either company's technologies, this kind of uncertainty can be more than unnerving. It can delay or even derail IT plans.

Yet when we polled senior IT managers in our online Executive Suite on this issue last week, there was a glint of optimism. With blue-chip firms like these, they expect migration paths from dead-end products to ones with longer lives. HP had better make that happen.

Join the newsletter!

Error: Please check your email address.

More about CompaqCompaqHewlett-Packard AustraliaSabre CorpWall Street

Show Comments