HP-Compaq merger leaves users anxious

Hewlett-Packard's planned £17bn acquisition of Compaq, the largest ever IT merger, will leave IT directors and users with many...

Hewlett-Packard's planned £17bn acquisition of Compaq, the largest ever IT merger, will leave IT directors and users with many questions.

The initial user reaction was one of surprise, according to Ian Severn, UK chairman for Decus, a Compaq user group.

"The merger will be greeted with mixed views by users. The next few months will be a real testing period for the management of the two companies," Severn said.

"As users, we hope that there will be more stability than we have seen over the past two to three years and more direction and momentum in the server business."

Dave Berwick, IT operations manager at Mitsubishi Motors UK, told CW360: "We are customers of both HP and Compaq and the major concern is uncertainty over support services.

"Obviously there will be some streamlining and scaling down so I just have to wait and see if it causes us any problems. It will be exciting if it improves efficiency and brings down cost, but if we don't like the way they come together, we will look elsewhere for service and supplies."

Mike Lay, IT director at Swindon Council, said: "We have just started buying Compaq but I don't see this impacting on us too much. It sounds as if HP is looking to really take on IBM. Hopefully the deal could mean we can buy cheaper in the future but the fear is we will see a reduction in competitiveness."

"Initially, this is likely to create more confusion for both users and sales people," said Pascal Matzke, an analyst at Giga Information Group. Matzke doubted the situation would settle down "for at least 12 to 18 months until the new company is streamlined and has a common look and feel".

"If a customer is in a room with an HP or Compaq sales person, they are going to question this person's motivation - the new company needs to make clear what its position is very quickly," he added.

John Handby, chairman of the IT directors' forum CIO Connect, thought users had real grounds for concern. "In the short term, users should seek assurances from HP and Compaq. In the long term they should review their technology and how it will be impacted in the future.

"Ultimately they will have to make a judgement call to make sure they do not get locked into anything that may become a cul-de-sac. They must take a hard look at the implications for their operations and future purchasing decisions."

Colin Beveridge, an interim IT director, was equally concerned. "If I was about to embark on a new HP or Compaq based investment," he said, "I'd be asking some searching questions about whether the technologies on offer were going to last the lifespan of the project.

"You may get assurances that there will be no change, but there will be product rationalisation. If you loose products, you loose people. That matters because your suppliers' support infrastructure is key."

Martha Bennett, an analyst, at Giga Information Group, urged users to begin communicating with the new company "as soon as possible" to determine how the products they used would be affected.

In addition, she said, "users should demand one point of contact" to avoid confusion with different account managers.

Read more on IT strategy