Computers Today, June 1-15, 2000; Chief Guest

June 1-15, 2000 CHIEF GUEST

"Last year was tough for us. We lacked focus."

Appointed president and CEO in July 1999, Michael D. Capellas was entrusted with the responsibility for overall strategic planning, organisational realignment and all operations of Compaq Computer Corp. Earlier, as chief information officer, he swerved the 'PC company's' directions to meet the demands of the Internet era. One step forward, the vision now is: "Everything to the Internet", Capellas told Sudhir Chowdhary during the launch of AlphaServer in New York last fortnight.

There is a widespread feeling that Digital's products didn't merge into the product platform of Compaq. Will change now happen with the launch of AlphaServer?

It would be incorrect to say that Digital's products didn't integrate into the product platform of Compaq. In fact, the complete line of the current AlphaServer range has been launched in post-integration period. With the new AlphaServer GS Series, Compaq has changed the competitive landscape in RISC servers. But we're doing more than just introducing a great server. We are delivering the solutions our customers need to meet the demands of E-business. We are targeting established and emerging dotcoms as well as customers in telecommunications and technical computing.

Will the proliferation of Net companies change the server strategy?

Compaq's new AlphaServers will give the company a much-needed shot in the arm in the midrange and high-end server space. During the third quarter of 1999, Compaq announced intentions to cease product development of its AlphaServer systems that run Windows NT operating systems. Compaq will instead focus its Windows NT efforts on its Intel-based ProLiant platform, targeting AlphaServers using Compaq Tru64 UNIX and Open VMS OS towards the high-end enterprise market.

What about the restructuring drive undertaken to shed the image of a 'PC company'?

We accept the criticism as we have not been able to market our new image properly. In fact, it's hard to describe 1999 as anything but a tough year for Compaq, its employees and its stockholders. In a strong technology market, our performance was, for the most part, disappointing. Our commercial PC business was hampered by a selling and distribution model that was no longer profitable. We lacked focus. Neither our customers nor our employees clearly understood who Compaq was or where we were going. As such, the new management team realigned the company around three global business groups-enterprise solutions and services, commercial personal computing, and consumer. During the second half of the year we returned to profitability, reduced operating expenses and began to focus on increasing growth and stockholder value.

What is the vision for the future?

In this new world, every company has to rethink what it does and where it plays in the market. I see it every time I meet with one of Compaq's customers. They are reassessing their business processes. How they distribute their products and services. How they partner. How they manage customer relationships. In other words, how they become E-businesses. It's really very simple. A company will either be an E-business or out of business. We're just at the beginning of the process. Sure, there's a dotcom company created every day. But we're only scratched the surface of E-commerce and E-business. And the opportunities for a company with the technology, skills and innovative spirit like Compaq are enormous. We are guided by a single, focused vision: everything to the Net. It defines not only what we do for our customers but also how we run our company.

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