Compaq CEO says no slowdown in sight

Continued strength in the Web deployment, enterprise storage and handheld computing spaces give Compaq boss Michael Capellas reason to smile.

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By  Colin Browne Published  January 16, 2001

One thing you are not going to see in 2001 is a slow down in deployments on the Internet, according to Compaq CEO Michael Capellas. Where analysts in the United States are saying the IT bubble has burst and that a slow down in the economy will bring about a slow down in spending on projects, Capellas says that in his business, the signs point in the opposite direction.

“Companies are not going to be slowing down their rollouts of the Internet. One of the things we are not hearing from our major commercial accounts are any huge project cancellations. The large commercial accounts with programmes to extend their Internet capabilities are still moving forward,” Capellas says.

But that isn’t all that is right at Compaq today. As it sets out later this month to post worse-than-expected financial results for the quarter—like every other IT company it seems—Capellas can be reassured by the knowledge that those results still represent an improvement on those of twelve months ago.

The reasons are many and varied, from better focus on business lines, better manufacturing policies, and working better with channel partners where under previous CEO Eckhard Pfeiffer—ousted 16 months ago—they had suffered.

More dramatic however may be the discovery of two markets which Compaq didn’t fully understand existed. A sharp re-focus around enterprise storage has seen a division re-emerge from the depths of Compaq’s old Digital business lines, and present what Capellas believes can be a serious challenge to market leader-by-far EMC. New products and new sets of internal and partner expertise have been the order of the day as Compaq looks for choice pieces of the still-up-for-grabs enterprise SAN market.

The second is the development in just 12 months of the US$1 billion iPaq market—a Windows-based palmtop computer. Compaq originally forecasted sales of 7,000 iPaq’s per month when it rolled the device out last year. Since then it has struggled to meet market demand for more than 100,000 per month.

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