Pfeiffer: Web sales, Alpha key to Compaq

Eckhard Pfeiffer outlines a future that involves more sales of products and services over the Web as well as an increased push into high-end corporate computing.

Tech Industry

NEW YORK--Compaq chief executive officer Eckhard Pfeiffer today outlined a future for his company that will involve more sales of products and services over the Web as well as an increased push into high-end corporate computing, including support for the Digital Equipment 64-bit Alpha processor.

Pfeiffer, speaking at PC Expo in New York this morning, painted a

Eckhard Pfeiffer
Eckhard Pfeiffer. AP
picture of the future where Compaq in many ways will become all things to all customers at all times, delivering high-end business critical systems and consulting services to multinational companies as well as e-commerce links and Internet service provider-like services to small and medium-sized businesses. If successful, Compaq will become a pervasive presence for customers through its Internet links.

"Customer expectations have never been higher. They expect an information infrastructure to be available 24 hours a day, 365 days a year," Pfeiffer said.

The catalyst for many of the changes, he added, was the Digital acquisition.

One of the first elements of Compaq's strategy is a series of Web-based sales initiatives aimed at small and medium-sized customers. Compaq Online Services, for instance, is a new program under which Compaq, alone and with select partners such as UPS and GTE, will sell Web hosting, data backup, and secured electronic courier services to medium sized businesses.

As earlier reported, Compaq will also expand its efforts to sell computers over the Web, both directly through its DirectPlus program and in conjunction with its reseller partners.

A feisty Pfeiffer asserted that Compaq is already a more dominant player in e-commerce than archrival Dell because a number of its resellers sell computers over the Web.

"Compaq and its resellers sell more than $6 million a day over the Internet. That is more than Dell," he said, adding that customers will be able to get product "when you need it, how you want it, and the lowest possible price." Dell claims its sells $5 million in products a day via the Web.

For large customers, Compaq will assert itself as the hardware linchpin in enterprise computing, he said. Compaq will aggressively promote Windows NT as well as corporate "enterprise" applications from companies such as Oracle. At the same time, the company will continue to invest in and promote Digital's Alpha processor, Digital's version of the Unix operating system, and the ServerNet clustering technology it acquired when it bought Tandem.

In the end, Compaq's aim is to migrate the Unix customers it inherited with Digital to Windows NT while simultaneously blending the best bits of its own high-end technology into the mainstream.

"We have placed our first priority on industry standards going forward," he said, referring to Windows NT. "But this is not the only corporate platform and will not be for some time to come.

"Compaq will have a signification influence on the speed of industry standards development," he added, signifying that Compaq will chart its own course for high-end corporate computing beyond the Microsoft vision.

As part of this effort, Pfeiffer stated that the company would continue to invest in the Alpha chip.

"Compaq will continue to invest in the high-performance 64-bit platforms. Alpha is at least two years ahead of Merced," he proclaimed.

Services will, of course, play a large part in Compaq's future direction. With Digital, Compaq will now have 25,000 technicians worldwide, a figure that includes 3,000 Unix service professionals and 2,000 certified Windows NT engineers. Compaq also now has 10,000 employees dedicated to direct marketing and sales.

While much of the speech was strikingly similar to a speech he delivered last Friday, many of the details regarding Compaq's e-commerce initiatives for small and medium-sized businesses were new. The Online Services program, for instance, had not been announced or alluded to previously.

Under the program, Compaq will use Digital's "Class A Data Centers" to connect into customers' computer systems. Once connected, Compaq will be able to market discreet electronic services to customers. Some of the new services include online connectivity, a Web hosting service that will be sold in conjunction with GTE, and online postage, an electronic postage system done in conjunction with E-Stamp. The eight new services also include a system for package tracking being performed with UPS and secure document exchange service.

Pfeiffer also reiterated that Compaq would include its reseller partners in its Web sales efforts. ClubWeb, an e-commerce site by Compaq, will allow these parties to market products and services in conjunction with Compaq. These parties will also work with Compaq on its Web sales efforts of PCs, he said.

Nonetheless, outsiders have said that details on how many of these programs work have still not been determined. "That is a huge looming question mark," said Steve Cohan, president of Entre Computer Centers. "They now understand how to compete against Dell, I don't think the rules are clearly defined yet."

Mike Gumbert, chief operating officer at Insight said that a direct sales effort, if executed properly, could work to the advantage of both Compaq and its sales partners. Compaq, he added, is trying to develop programs to ameliorate any conflict.

The long-term effects, however, are unclear. "Long term is hard to predict," he said.

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