IT chiefs still divided by HP/Compaq merger

Chief information officers are split about the benefits of Hewlett-Packard 's planned acquisition of Compaq according to a...

Chief information officers are split about the benefits of Hewlett-Packard 's planned acquisition of Compaq according to a Merrill Lynch survey.

Merrill Lynch asked 75 US-based and 25 European chief information officers on a range of industry issues, including the HP/Compaq union.

Some 76% ran Compaq equipment and just over half that group were in favour of the deal or where neutral, the survey found. Twenty five percent said they support the acquisition, while 29% said they were neutral, with 46% opposing the merger.

Less than half the survey's respondents, 43%, said they ran HP computers. Of those that did, 42% opposed the acquisition, 32% were neutral and 26% supported it.

On average, respondents' spending on Compaq products will drop 10% this year, the survey found while the 100 chief information officers' estimated that spending with HP would decline an average of 4% this year.

Other surveys have found similarly mixed customer views on the acquisition.

A Technology Business Research study released last week found 46% of surveyed HP and Compaq corporate end-users are undecided about the deal. Some 30% favoured it, with 24% opposed. But even those against the merger did not expect major problems for their company if it is completed. Only 10% of respondents thought it would have a negative impact on their own IT department, and just 14% said they would consider switching vendors if the companies combine.

IBM could be a beneficiary of customer disenchantment with HP and Compaq, according to Merrill Lynch's survey. Of those polled, 38% said IBM was gaining a larger share of their spending with 15% saying it was losing share within their company.

Sun Microsystems is losing nearly as much share as it is gaining, the survey found. One quarter of respondents said Sun is gaining more of their IT spending, while 22% said it is losing share with 10% reporting no change in their spending with Sun.

Almost half (43%) said they did not buy from Sun, and only 28% of those polled said they would look to Sun for help with their IT infrastructure.

Among Sun customers, 38% said their strategic commitment to the vendor is increasing, while 34% said it is declining. Some 66% of customers said their spending with the company this year will be up or flat and 34% said it would drop.

Linux may be in the headlines, but it is not yet in the enterprise. According to Merrill Lynch only 26% of the chief information officers said Linux is a strategic system for their company.

Tools for enterprise resource planning, customer relationship management, supply chain management, billing and data warehousing are the most in-demand software applications, the survey found.

Of those surveyed, 66% said they need more servers to run their applications, and most are looking to control the growth of their server-farms, with 56% consolidating servers.

Chief information officers are not optimistic about economic recovery. More than half said they thought meaningful increases in IT spending would not begin until next year.

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