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Compaq checks into health care

The computer manufacturer has contracted with a host of health care companies for a combined $300 million in new business over the next three to five years.

Compaq Computer is writing prescriptions for $300 million in new computers and services for various health care customers.

The Houston, Texas-based computer manufacturer said on Wednesday it has contracted with a host of health care companies for a combined $300 million in new business over the next three to five years.

The new business, booked after the company's proposed merger with Hewlett-Packard was made public last September, may help the PC maker bandage business after a difficult year in 2001.

But Compaq says it has been working toward boosting its health care prowess for about 18 months. In that time, the company has signed up a number of new corporate partners including software application providers whose software manages medical records.

It's not surprising Compaq would want the world at large to know that its health care business is alive and kicking. Analysts say it's in the best interest of the company.

"This is what I would call viability messaging. It's saying we're not only still in business, but we're doing well on some fronts," said Roger Kay, analyst with IDC.

"A lot of these wins (Compaq) has publicized represent the kind of wins it wants to have," Kay said. But, "You can be sure that...Compaq is going to win some and lose some. It will lose a few (customers) to IBM" after the merger.

But a large portion of Compaq technology, and a large number of employees, are expected to survive the merger, certainly enough to convince these new customers to continue to sign on.

One such customer, Sharp HealthCare, will buy hardware and services to move its e-mail system to Microsoft's Exchange 2000. The contract is worth about $10 million over the next two years, Compaq said.

"Each (health care) provider is quite different in terms of what we're doing for them," said Jim Milton, senior vice president and general manager for Compaq North America. "But I think the theme in most of these cases is...either taking cost out of doing business or improving quality of care or both. Where they're starting...will determine what kind of solution we're providing."

Many customers are looking for more wide-ranging projects that allow them to access data such as patient records over a wide range of devices, ranging from PCs to handhelds via a computer network, he said.

As a result, Compaq's yearlong partnership with Allscripts Healthcare Solutions, a company whose software stores and then delivers patient medical records via devices such as Compaq's iPaq handheld, has led to $20 million in new business.

Compaq has announced more than $6 billion in new contracts since Sept. 3, when it announced its intent to merge with HP.