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Commentary: Compaq's timely Evo-lution

The company's Evo announcement comes at an appropriate time because it promises to improve the focus and efficiency of a PC maker that has recently been outdone by rival Dell Computer.

By Mark Margevicius, Gartner analyst

Compaq Computer's Evo announcement comes at an appropriate time because it promises to improve the focus and efficiency of a PC maker that has recently been outdone by rival Dell Computer.

See news story:
Compaq to unveil "Evo" for business PCs
With this sweeping announcement, Compaq has taken a positive step toward closing its market-share gap with Dell, while addressing many of the computing needs of Compaq's customers. For one, Compaq has refreshed its product line, a move that Gartner believed was long overdue. This freshening is bolstered by Evo's distinct identity--that is, a common look across platforms and devices (desktops, notebooks, workstations, terminals and handhelds).

The common look will send a message to customers that Compaq is trying to greatly simplify the computing experience through the right mix of products. In short, Evo represents Compaq's attempt to differentiate its product line in the market.

The Evo announcement also shows similarity between changes in Compaq's product line and organizational changes the company made earlier this year. Toward the end of the first quarter, Compaq announced the consolidation of its consumer and commercial PC divisions. With this far simpler organizational structure, Compaq--like Dell--can focus on its core competency: PCs. Evo represents a positive outgrowth of that internal consolidation.

Prior to Evo, Compaq's product line was overly diversified and disparate, plagued by mixed messages to consumers and internal inefficiencies centered on channels, products, manufacturing and engineering. Despite product marketing and organizational changes in early 2001, Gartner believes Compaq must still do the following:

• Further clarify the Evo message and strategy, as Evo is not totally intuitive to the average user.

• Aggressively market the product line.

• Demonstrate product/service differentiation in a commoditized market.

• Further improve Compaq's internal operational efficiencies.

• Emulate or improve on the direct-relationship model established by Dell.

Evo is Compaq's attempt at simplifying its product strategy for its customers. A simpler product mix enables Compaq to concentrate on its core offerings, which can effectively compete with those from Dell over the long term. Gartner also believes that Evo begins to address some of the operational issues that have plagued Compaq for some time, as internal issues take on less significance under a more streamlined organization.

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Entire contents, Copyright ? 2001 Gartner, Inc. All rights reserved. The information contained herein represents Gartner's initial commentary and analysis and has been obtained from sources believed to be reliable. Positions taken are subject to change as more information becomes available and further analysis is undertaken. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.