HP-Compaq merger unlikely to complete
Thursday, September 6, 2001 by mcs2k1 | Discussion: WinCustomize News
THE PLANNED $25 billion merger between Hewlett-Packard and Compaq Computer is unlikely to be completed, according to an assessment issued Wednesday by market analyst Gartner.
Gartner believes that too many difficulties exist for the two companies to successfully bring off the merger. These include the following:
Regulatory approval. End-user customers of the two companies will have to plan ahead on inadequate information, since neither company can finalize a merged product line until approval is granted, a process that may take nine months.
The touted cost saving of $2.5 billion annually from 2004 only amounts to about 3 percent of the combined costs for the two companies
Product overlaps are daunting. The combined HP/Compaq will have to sort out four server architectures, seven operating systems, four storage architectures, and several service businesses.
Both companies have struggled to sort out the conflicts between direct and indirect PC sales channels and would be faced with the added complexity of managing two businesses as well as two brands.
Gartner believes that too many difficulties exist for the two companies to successfully bring off the merger. These include the following:
Regulatory approval. End-user customers of the two companies will have to plan ahead on inadequate information, since neither company can finalize a merged product line until approval is granted, a process that may take nine months.
The touted cost saving of $2.5 billion annually from 2004 only amounts to about 3 percent of the combined costs for the two companies
Product overlaps are daunting. The combined HP/Compaq will have to sort out four server architectures, seven operating systems, four storage architectures, and several service businesses.
Both companies have struggled to sort out the conflicts between direct and indirect PC sales channels and would be faced with the added complexity of managing two businesses as well as two brands.
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