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HP-Compaq: Not much chance of success

Cliff Saran
Carly Fiorina, Hewlett-Packard's chief, is adamant the HP-Compaq merger will benefit both users and the channel but the jury is out on whether we will truly see the deal of the decade.

In an analysts' briefing earlier in the week, Fiorina blamed the IT industry for failing users. She said the problems in the technology sector were not solely a result of the economic slowdown. "Something else is fundamentally wrong," she said.

Fiorina believes there is a change in the way customers are using and buying technology. They want more value, choice and return on investment. The merger, she claimed, would deliver these benefits to customers.

HP CEO Carly Fiorina discusses the benefits of merging with Compaq >>

However, Andrew Butler, an analyst at Gartner Group, paints a bleak picture. In a Gartner First Take on the merger he said the companies had failed to present the benefits of an acquisition of this scale well enough to justify the deal's risk.

Gartner believes both companies have struggled to resolve conflicts between direct and indirect sales channels and estimates the deal has only a 40% chance of going through.

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