Compaq Buys Distributor's Custom-configuration Biz

Compaq Computer Corp. is beefing up its direct-sales capabilities with the acquisition of the custom configuration and order management activities of Inacom Corp., a longtime Compaq distributor. Compaq will pay $370 million in cash for the Inacom activities, which it will integrate into a wholly owned subsidiary that will report to Compaq's Mike Winkler, senior vice president and group general manager of commercial personal computing.

The acquisition, which had been rumored, was announced in a conference call yesterday. In the call, Compaq President and CEO Michael Capellas said the deal would have its most immediate effect on the company's dealings with global accounts. He said Compaq would maintain a strong relationship with channel partners and suggested that resellers would actually benefit because of more predictable product supplies and lower inventories. Compaq executives repeated earlier statements that the company intends to reach 40% direct sales in the U.S. by the end of this year.

Charles Smulders, an analyst at Gartner Group Inc.'s Dataquest in San Jose, said the Inacom deal will allow Compaq to deliver to its customers more complex preconfigured systems than its biggest competitor, Dell Computer Corp. However, said Smulders, "there's very little evidence in the industry that buying your reseller is a sound strategy." Smulders said the acquisition would likely upset other Compaq resellers.

Join the newsletter!

Or
Error: Please check your email address.

More about CompaqCompaqDataquestDell ComputerGartnerGartnerInacom

Show Comments