Compaq's CEO Resigns 89
tomreagan writes
"Unbelievable - Compaq CEO Eckhard Pfeiffer just
resigned out of the blue on Sunday and took the CFO with him.
There's a story at the New
York Times (CT:Requires free login) and the
official press release can be be found
here. "
Eric FUD Thesis (Score:1)
Am I the only one who see something vile about his FUD..
Anyway his article follows..Next post is by some AC who replied to it. Eric time to change the colours..
Anonymous Cowards and Dell's quality
1) Dell is almost totally a "white box" operation, with the exception of the very high end of their line. In fact, the Compaq
guys make fun of Dell because so much of Dell's stuff is just off-the-shell commodity hardware. The Dell guys just smile all
the way to the bank.
2) I assure you that LHS and VA Research, at least, have people on staff who came from Compaq, Apple, etc. and are
quite familiar with the design centers at those compoanies.
3) VA Research no longer builds their own low-end computers. Those have been outsourced to Flextronics (or did you
miss their news release?). Most computer companies do this. Very few low-end computers are built by the company
whose badge is on the front cover. (Heck, even the iWhack is contracted out to such an outsourcing firm!).
4) In general, almost all facets of designing and building a computer can be outsourced now. I can't tell you details (sorry,
NDA), but basically it becomes a game of where your design dollars should go. In the $1K-$30K range Compaq cannot
build better motherboards than ASUS or Intel, and in fact they don't. What they do accomplish is creating motherboards
that are cheaper to add into manufactured computers. Ever wonder why so many components are integrated into
Compaq motherboards? Well, that saves a few dollars because those components can be automagically placed onto the
motherboard by robot pick'n'place machines, rather than having some poor slob have to spend thirty seconds slamming a
video card into a computer and spinning the retaining screw home.
But the thing about outsourcing is that the poor slob is now in Malaysia or Thailand and is being paid $3 per day. Given
that, why invest design dollars creating a board that reduces manufacturing costs, but which is actually technically inferior
to what can be bought off the shelf from ASUS or Intel? (I say technically inferior because integrated peripherals reduce
the flexibility and repairability of a computer, both of which are qualities which I personally value).
5) All that nonwithstanding, you are correct about being able to put together a system equal to that of VA Research, Dell,
or Linux Hardware Solutions out of off-the-shelf parts. In fact, any Joe Consultant in Cheyenne Wyoming can do the
same. That is what is so amazing about today as vs. 20 years ago, when that was definitely not the case.
Given that, vendors like VAR, LHS, etc. are not going to win by trying to out-engineer ASUS and Intel. Engineering
resources have to be carefully allocated to those areas where off-the-shelf hardware currently doesn't exist (I don't think I
can say more there, NDA etc). In the mainstream $1K-$30K server market, though, where any Joe Schmuck can buy the
exact same parts off the shelf, it's the services of systems integration and support that we sell. We sort through the dozens
of video cards and network cards and etc. out there so you don't have to, and then set things up and often times hunt up
or write drivers for things that need it (like for the Symbios 53c896-based stuff or the Mylex stuff). If you don't need those
services, build your own for crying out loud! That's why we put the parts lists up on our web sites, after all. But don't diss
those of us providing a valuable service just because you don't need that particular service!
-- Eric
Eric Lee Green -- Not speaking for LHS
Wrong paradigm shift. (Score:1)
Take away their internet, though, and they'll notice.
SGI CEO resigns (Score:1)
When??
When he will complete his task -- destroying yet another company by selling it to M$, of course.
It was funny until... (Score:1)
Humans...
Maybe... (Score:1)
----
It's no surprise! (Score:1)
Even so, he's not going anywhere. Can you imagine what would happen to MS' stock price if he left?
Sign of changing paradigms (Score:1)
Disgruntled DELL employees? (Score:1)
I am not trying to slam DELL. I admire DELL greatly.
I agree that Compaq is not going away. At the very low and at the high end, their approach works. What they need to do is get away from the proprietary crap in the $1K-$2k range (my opinion -- computers w/proprietary floppy drives?! Sheesh).
For those slamming VA Research, LHS, etc.: if you can build a better machine, DO IT. Nobody forces you to buy one from these guys. All I'll point out is that these guys have been supporting Linux from the beginning, rather than piddling silliness on Slashdot the way some people do. It wasn't DELL that donated the server that Slashdot is running on. It wasn't DELL that donated the servers that Debian's web and FTP sites are running on. Understand?
Regarding these folks being scared of DELL: You betcha. VAR, LHS, etc. are going to either have to staff up SWIFTLY and pour in a lot of venture capital money in order to match Dell's marketing reach, manufacturing and design ability, and quality, or else find a niche that Dell doesn't market into and quietly live a small life there. VA Research is taking venture capital, so I have a suspicion that I know which route they're taking. I won't comment on any other vendor's plans, for obvious reasons (conflict of interest, or etc.).
You may not care where I work, but others in the past have cared and have mistaken my views for those of my employer. Perhaps I should change my signature to simply say "These opinions are not my employer's" without mentioning a name, but on the other hand, it's not as if my EMAIL address and web site URL aren't a clue there (DUH!). I suspect in the future I'm going to have to purchase my own domain name and host my web site and EMAIL elsewhere, but at the moment I'm lazy and poor so I'm not doing it.
I usually don't respond to Anonymous Cowards for obvious reasons (they are usually trolls tossing out flame bait like yours). But so it goes.
-- Eric
[Not speaking for my employer.]
University students and Linux (Score:1)
One of the most shameful things happening at America's universities right now is that large amounts of the research being done will never see the light of day because either a) the university takes control of it and licenses it to a commercial party for money, or b) it's being done under contract to a commercial party in the first place.
I do agree that the major vendors' donations have been well appreciated by the smaller universities that have a need for them. I know that at the university that I graduated from, the computer science department sneered at PC's (they were Unix all the way, with a Sun workstation on every professor's desk), but the engineering department definitely didn't sneer at their lab-full of donated Zenith machines (whoops, I'm showing my age!).
-- Eric
Second-guessing Compaq (Score:1)
Compaq has great servers. Compaq has great laptops. They have great engineers working on those servers and laptops. (There's more that I can't say there, but you'll understand that later). Their mid-range desktop machines, on the other hand, have (or used to have, anyhow) entirely too much proprietary stuff in them. The question is whether Compaq can rein in their vaunted engineering department and focus their efforts towards bringing out good product in a timely manner, rather than spending months after the competition has come out with "generic" stuff in order to come out with their proprietary stuff.
Anyhow: It's fun second-guessing Compaq. But let's not attach too much importance to it. Compaq isn't going anywhere anytime soon. Hopefully, with renewed focus from corporate management and renewed attention to pruning their management bureaucracy, they will soon be once again turning the kinds of numbers that people expect from them.
-- Eric
Sign of changing paradigms (Score:5)
Compaq's problems stemmed from the same basic flaw as Apple's problems: they engineered too much of their own hardware. That is acceptable for high-volume low-cost widgets like the $500 eMachines units, where scraping 15 cents off the cost can be millions in extra profits, but it is not acceptable in the $1K-$2K market. In that market, every Joe Consultant in Hoboken is building computers out of "white boxes" in their back room, and according to at least one survey that I saw, as much as 50% of the personal computers sold may be going through that channel.
Compaq's engineers have always laughed at Dell. They have sneered at Dell's "white boxes" (Dell does very little of their own design work, mostly re-packaging generic commodity components). Dell laughs all the way to the bank.
Apple is doomed, in the end, because they cannot compete on a cost-basis with equivalent Intel boxes. One company engineering all of their own hardware cannot compete with companies that outsource commodity hardware from specialists in that particular type of hardware. Apple cannot build a motherboard for as cheap as ABIT or some other company that specializes only in motherboards, for example.
Lessons learned:
Engineering your own hardware works only for ultra-low-cost-high-volume work, or for stuff there isn't enough volume for "generic" hardware. In the vast middle of the road, using commodity components gets you a better computer for a lower cost.
Why this is important to us:
Microsoft is like the Apple of the operating systems world. They engineer all of their own components in-house so that they can have "total control".
Linux, on the other hand, is the "white box" operating system of the new era. Linux vendors collect commodity software components from various locations, integrate them, and release the result as a single product. Much like a "white box" manufacturer looks through the available video cards to decide which one to put into his computer, the "white box" Linux vendor looks through the available 'lpd' daemons to decide which one to put in his distribution, for example. Then, like the 'white box' computer manufacturers, the 'white box' Linux vendor then differentiates himself from his competitors through a) the choice of components that he uses (e.g., glibc? libc5?), b), the kind of service he offers, c) "widget frosting", such as a nice installer, better config tool, or whatever, d) advertising and image. Part of which may be releasing software created internally as Open Source... for example, Red Hat gained much of their mind share in the early days by releasing things like 'rpm' as Open Source.
The value of this "white box" paradigm for creating operating systems is that it inevitably adds to the supply of commodity components for building operating systems, and thus will inevitably result in better operating systems components, much like having multiple video card vendors has resulted in better video cards. Bill Gates views the GNOME vs KDE thing as a weakness. I view it as a strength, much like nVidia vs. 3dfx. Just as having two 3d video card giants helps drive innovation in the 3d video card industry, having two desktop environment giants will inevitably help drive innovation in the desktop environment industry... and thus add to the supply of commodity components that we put together on a CD and call "Linux" (GNU/Linux, for you purists out there!).
-- Eric
It's no surprise! (Score:1)
I wouldn't doubt that he was FORCED to resign.
It's no surprise! (Score:2)
Shareholders don't take it kindly when the share price halves.
The more interesting implication is that the same can happen to one hugely over-valuated software company, if there is even a little glitch in profits... Could we see resignations then? Could that glitch be a consequence of Linux?
Wishfull thinking...
It's been coming (Score:1)
In short, "Getting bigger" doesn't mean "Getting Better", and poor Eckhard learned the lesson the hard way.
Take a hike!!! (Score:1)
"rbf"
--
ALPHA LINUX POWERED and loving it!
Hyundai Excel (Score:1)
You must have had one of the early ones without the Mitsubishi engine. I love mine. It's a great little MOT with that still can haul a lot with the back seat folded down (whenever my wife wants to get a small SUV, the benchmark is: Can it carry more than the Hyundai?. Most of the time the answer is no). I even towed a loaded UHaul trailer over the Rockies in 90F temps and across Kansas in 100F temps without a problem. Sure going up the incline to get to Eisenhower Tunnel was a little slow, but it kept on chugging. =)
Acting CEO is worse (Score:2)
However, the DOJ managed to dig up an e-mail from Bill Gates to Rosen kindly thanking him for the great effort he had made in coming to Redmond repeatedly on behalf of the trial.
I have never been interested in Compaq and know next to nothing about Pfeiffer. But right now they have a CEO whose allegiance to Microsoft is sufficiently strong that he is willing to lie for them even when under oath. That can't be good.
vms is no mistake (Score:1)
the nicest thing about it is the way it *never* crashes. spoke to an eng at a vms site, and he hasn't seen a crash in the 3 years he's been there .
The Sky is Falling (Score:1)
- Under Pfeiffer's tenure at Compaq:
- A DS20(DP264) was donated to Linus Torvalds.
- An AS1200 was donated to ALO [alphalinux.org]
- Compaq released ("free") fast-math libraries for AlphaLinux, along with plans for optimized compilers.
- Almost every (new) document about Compaq/Alpha mentioned linux (ie: "New for Tru64 and Linux".)
- Compaq announced product lines targeted at the Linux-market (DS10).
- Summary: There was never that level of linux-committment from Intel. Go to IBM's site, and they'll tell you that Linux is the perfect-fit for low-end/low-demand systems, in stark contrast with AIX.
- Alpha: Lets pretend it doesn't exist
- Even the "old"(21164) Alpha's beat new Intel's in integer perf. Comparing fp-perfs isn't even fair.
- 21164's also easily beat the other "best-of-breed" (Sparc/Mips) in both integer and fp, as well as having a dramatically lower unit cost.
- 21264 (new+expensive) offers significantly better performance than any other cpu, while remaining price-competitive with Sparc/Mips.
- Microsoft (non_intel==fringe)
- Summary: Alpha has been the enemy of the computer industry giants since inception.
I hear a death-knell... Anyone else?(and since the DEC acquisition)
People thinking within the mainstream is a critical element to MS's success. As soon as a consumer's mind wanders outside the NT/Intel sandtrap (even into NT/Alpha), who knows where it might go next? No wonder MS ignored the Alpha.
Server and laptop service is pretty good, though (Score:1)
sPh
I don't know what you're smoking (Score:1)
I guess I don't like Compaq much at all.
But they do have a right to sell Wintel boxes, and their servers are all right.
And I do love Digital. Why are they a dinosaur? Because they make the fastest chips in the world? Because everyone's favorite HolyOS runs damn fast on the fastest chips in the world?
Ok, VMS is a continuing mistake. But they don't make me use it.
As long as Compaq supports Digital's WRL and cool toys like the Itsy, they're all right in my book.
I would guess not (Score:2)
The Digital arm of Compaq has a hell of a commitment to Alpha, and a lot of R&D invested in the next gen 21364. Alpha is already supported by Linux and WinNT, and if Merced is a flop is well poised to become the 64bit successor to IA32, as companies demand 64bit power that works easily with their existing applications.
I think it'll be around for a long time.
Bah to most of you. Bah to you too. (Score:1)
Gordon
18.5% (Score:2)
Either way, I doubt that he could ever be forced out of the CEO job, unless things were really bad.
Mark Fassler
fassler at frii dot com
I don't know what you're smoking (Score:1)
Companies will milk minicomputers for revenues for a long time - but think about how many mainframe vendors are still standing. They do OK because the margins are so high, but it's not a growth business anymore.
Minicomputers are on their way to that point - with lower margins than mainframes. Sure, DEC makes Alpha, and Alpha rocks. And they've done some cool stuff in the labs. But their core business is a ferocious, cutthroat industry where margins are non-existent and everybody runs the same software with no differentiation (MS Windows Whatever). Compaq counted on DEC and Tandem to diversify their revenues and get more $ from services in order to combat the Wintel clone problem. So far, they get an 'F'.
Besides, DEC (though Alpha is the balls) stands in a corner with Novell as two companies with great products and crappy marketing. DEC would sell sushi as "raw dead fish". Though truth in advertising is great for engineers, reality dictates otherwise. While the DECs and Novells of the world preach to the choir, their competition always sold to the PHBs above. Once IT started maturing as a profession and the suits took over, DEC didn't change.
And I love the Proliant 1600s - I've bought six of 'em in the last year. And one Proliant 6000 with dual Xeons - it's sweet. As for smoking though, it's a vile habit. I do eat too much and work out too little, though...
Back in the '70s and '80s (Score:2)
Today, the DECs and Tandems have become the dinosaurs. And Compaq, despite their servers (I love 'em), has started to turn into one, too.
The fundamental problem this time that differentiates a Compaq from an Apple in the turnaround effort is that Apple has gotten where they are by being different - an alternative to the prevailing Wintel near-monopoly. Compaq, despite owning Alpha, VMS, and their belated embrace of Linux, is just a Wintel vendor at heart. And Wintel companies are a dime a dozen.
For Apple, thinking different means something. For Compaq, it just means they're Dell with a higher cost structure, more outside salesmen, and Alpha chips. Whoopee.
I'll buy some shares in case they turn around (what the hell - they're cheap now), but I'm not going to bet the house on them.
Gee, is Compaq now "beleagured?" (Score:1)
ummm (Score:1)
Some of Compaq's Problems (Score:1)
They always used to have supply troubles, esp. in the Asia-Pacific region (where I am) but everything was supposed to be fixed by the new SAP system being implemented.... Needless to say, it hasn't, in fact things have gotten *much* worse.
Rumor has it that the cutover to SAP was supposed to happen in one weekend! It dragged on for months.
This may have had an impact on the bottom line, but it would certainly have had an impact on customer satisfaction levels....
Ben Rosen . Smart as they come.. (Score:1)
Duh! - Buy Dell instead - Compaq wishes they did! (Score:1)
Strong Buy (Score:2)
And no, I don't work for Compaq. But I am looking forward to being a shareholder soon.
Bah to most of you. (Score:2)
Someone replied: "Compaq should be broken up." Good grief! Compaq isnt doing any illegal business practices, nor do they have a monopoly.
50% of the posts consist of "Compaq Sucks, or bla bla". Get real. How many proliants are installed that have failed? I have a P-90 (Proliant) machine thats been on and running for years without a problem. And what brand are you using? The I-pieced-it-from-parts-donated-to-me brand?
The CEO and some crew resigned. Its not the end of Compaq. Its not like the whole employee based walked out, its the upper management.
I think a lot of you are quick to criticize if it isnt VA Research/Red Hat or some other "linux-friendly" computer or software company.
God. 10 years ago it was the Macintosh Religious Group - the people that preached that Macintosh was just. better.
Now its the Linux is just. better.
Kudos for believing in something, I guess. Non-kudos for not keeping an open mind.
:)
AP wire copy (Score:1)
Duh! - Buy Dell instead - Compaq wishes they did! (Score:1)
Compaq's sales model is in disarray, and they have never truly absorbed DEC.
Some of the stock talk in Slashdot cracks me up.
The Best Chip Does Not Necessarily Win (Score:1)
Firstly, Alphas have historically been expensive.
Secondly, Alphas have very little native-ported software that people care about, at a price-point that makes it worthwhile to move to the platform.
Thirdly, Alpha was oringally a product of DEC, and doomed early by poor marketing.
The only comapny that will destroy Intel will be the one to provide the same (or better) performance of x86 apps, at or below half of the cost. Expensive chips are passe.
Agreed! (Score:1)
The high end servers are still tip-top, and Compaq is still #2 (behind IBM).
Very true. While Compaq's low-end PC's (and service) leave much to be desired, their servers are top-notch. The Alpha machines are fast and stable, and Digital Unix running on them is well-organized and highly standards compliant. My job involves coding in C++ under DU 4.0 on Alphas, and the machines found a spot in my heart rather quickly.
Compaq needs to be broken up ... (Score:1)
All of the large IT companies need to demonstrate that the whole is greater than the sum of the parts. Compaq is trying its darndest to develop solutions that meet enterprise needs, horizontally and vertically. We will be using both best-of-breed inhouse and partner-developed solutions meet this end. See Next Generation Networks Infrastructure for example (http://www.compaq.com/services/ngni). And I believe that the merger of C, T and D is going right on track.
Unfortunately for Eckhard, the shareholders didn't believe we were moving quick enough. Watch this space for the likes of HP, IBM et. al.
BTW, I'm no PHB or suit, just an employee with a job to do!
Maybe... (Score:1)
They've all sold quality clone boxes with AMD, Cryix, etc chips for years... long before Compaq even thought of it. Do you think if the small store/clone market hadn't helped the popularity of Intel-alternate CPUs that Compaq would've bothered to sell them at all? People probably wouldn't even know about those other chips.
Maybe... (Score:1)
It's no surprise! (Score:1)
Maybe... (Score:1)
Compaq (+DEC) has been headed for a fall (Score:2)
Sign of changing paradigms (Score:1)
Their market share in the corporate world has been shrinking because Dell's service is better and cheaper. I hope they get back on track, but a major change is needed.
(I've worked in one Compaq shop and two Dell shops. The difference is unbelievable. In large enviroments supporting Compaq desktops is a pain in the ass.)
jeff_C
Maybe... (Score:1)
Funny, I seem to recall being a K6 owner for about 8 or 10 months before Compaq took an interest in any of AMD's CPUs; and if I remember correctly, the chip I purchased was in such hot demand that I had to scour the city to find one.
I wouldn't be quite so generous with equating Compaq with positive press. Compaq has done good things sometimes, but certainly bringing AMD to the forefront of the consumer processor market isn't something that could be credited to them.
Compaq CFO (Score:1)
(My statements do not necessarily reflect those of my employer)
you have a point (Score:1)
hey (Score:1)
Compaq needs to be broken up ... (Score:1)
with buying Tandem and DEC, it harked
back to an era when CEO's didn't get
humunous stock options, and so they
built empires to gratify their egos.
Watch for a trivestiture with the new
CEO
Compaq needs to be broken up ... (Score:1)
computer company where you sometimes have to
design the key components (hardware and software)
yourself? It's like taking the CEO of Rite-Aid
drug stores and putting him in charge of Merck.
And if Rosen doesn't get it, the person he hires
to take over probably won't either
Pfieffer didn't.
Re: An AC replied to Erics FUD theory (Score:1)
At any rate, unless they can come up with Linux on a bigger machine, I will probably go elsewhere for my enterprise solutions.
Its about time (Score:1)
dec albatross (Score:1)
Bah to most of you. (Score:1)
Take the good, excuse the bad, and move on.
UT OH! (Score:1)
--
Alan L. * Webmaster of www.UnixPower.org