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Compaq burnishes services offerings

Compaq beefs up the services it offers to large corporations that need to manage hundreds of PCs, merging programs from Digital Equipment.

As part of its diversification, Compaq today beefed up, renamed, and repackaged the services it offers to large corporations that need to manage hundreds of PCs.

Compaq's "Lifecycle Solutions" program merges the services offered by Compaq and Digital, with about 60 percent of the services coming from Digital, said Scott Edwards, a marketing manager at Compaq.

The program also has gained some new facets, such as a more sophisticated custom configuration service and the ability to certify that Compaq computers will be compatible with a company's computing environment.

Lifecycle Solutions is a window into two key challenges facing Compaq: The attempt to balance its reseller business with direct sales, and the ongoing effort to integrate Digital a year after the acquisition.

The services are targeted at corporate customers--the same market in which declining prices and feistier competition has hurt Compaq revenues and forced the company to halve profit projections for early 1999. Compaq also has been emphasizing its high-end servers and operating systems, products with higher profit margins.

Selling computer services such as planning, installing, or caring for PCs is nothing new. For example, an increasing fraction of IBM's revenues and profits come from services. Compaq historically relied on its resellers to provide such services, but that changed with its acquisition of Digital and that company's more robust, global services offerings.

But Compaq says the services plan won't compete with the offerings of its resellers, Edwards said.

"It's certainly possible that some [resellers] see it as a competitive threat, however, most of these services we already offer," he said. For most of the new services, the overlap with what resellers offer is "very slim," he said.

In addition, Compaq says resellers may call upon Compaq as a subcontractor to help provide new services.

The services are available to large companies, typically those with 500 or more employees.

Compaq also says the services will give the company an edge over companies--such as archrival Dell--that sell directly to customers, a model Compaq itself has been trying to profit from. "Dell offers virtually no services themselves," Edwards said, noting that it outsources work to IBM and Unisys.