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Compaq cuts out the middleman

The PC leader shows off an online service that makes it easier for customers to install new equipment without a middleman.

SAN FRANCISCO--Reinforcing its push to sell its computer products directly to buyers, Compaq Computer executives today showed off an online service that makes it easier for corporate customers to install new equipment without relying on the expertise of a middleman.

ActiveAnswers, which Compaq debuted in June, is an online library that lets subscribers tap the PC maker's knowledge on selecting, configuring, and installing complex computer systems and software applications. That work is now handled by consultants, system integrators, and resellers, and other middlemen in the computer industry.

At the Oracle OpenWorld conference here today, Compaq's John Nicholson and Chris Johnson demonstrated ActiveAnswer by showing how a customer could configure a complex server system running a database that had to operate 24 hours a day, seven days a week.

The demonstration featured a wizard that would quiz the user on features such as how the size of the database, how often it would be used, and how essential it was to a business. The system produced detailed recommendations of various combinations of servers, disk storage, memory, and other elements. The system can compile a parts list and send a customer straight to a purchase section, then later help a user plan how to set the equipment up.

The main reason to use ActiveAnswers is to "reduce frustrations people have in trying to deploy a large mission-critical bet-your-business application up and running real quickly," said Compaq's Paul Gottsegen, director of industry standard servers, in an interview earlier this week. And Nicholson said today that making things easier on the customer is necessary to keep Compaq competitive.

But one reseller saw the system as nibbling at his own business as well that of Compaq competitors like Dell Computer.

"It looks like more and more direct competition with the reseller," an executive at one major reseller said. "We're quite concerned, but really there isn't very much we can do about it."

On the other hand, he noted, Dell has been eating into his business as well. By contrast, Compaq resellers will benefit if customers move back to its platform. "We can still sell services, even if they buy direct from Compaq. We're now focused more and more on service and maintenance. There's not much profit left in hardware," he said.

Online hand-holding services such as ActiveAnswer won't replace assistance from real live human beings, though. A $50,000 server work order has about 30 line items and most customers have "no clue what to select"--things like rails, devices, and fasteners, the reseller added.

Also during today's keynote, Compaq chairman and CEO Eckhard Pfeiffer made an appearance via videotape.

Compaq products inherited from its acquisition of Digital Equipment and Tandem will give Compaq a better presence in corporate America, Pfeiffer said. "We are now in a position to be your full-service partner," he added.

Corporations still have a mixed environment using both Unix and Windows NT operating systems, Pfeiffer said, and Compaq will appeal those customers by making Digital Unix "the most Window NT-friendly Unix on the market."

And corporations will like Compaq's incorporation of Digital's high-speed 64-bit Alpha chip into its products, Nicholson said. Alpha is the platform on which the 64-bit version of Windows NT is being developed and already can run the 64-bit Digital Unix and OpenVMS operating systems.