March 4, 2002

History weighs heavy against HP-Compaq deal

Author: JT Smith

Paul Gillin, TechTarget VP of Editorial writes: Hewlett-Packard Co.'s latest ad campaign spotlights the company's history of innovation. But there is nothing innovative about HP's proposed acquisition of Compaq Computer Corp., and history offers no reason to believe that it will be successful.

HP and Compaq both have long and illustrious histories of innovation. Compaq invented the portable computer market in 1982 and became the first company to score $100 million in sales its first year. In 1986, it took the then unthinkable step of beating IBM to the 80386-based PC. In some respects, that bold action set the table for Microsoft Corp. to break IBM's stranglehold on the PC market years later.

In the early 90s, Compaq conceived the vision of servers powered by Intel Corp. processors. That vision succeeded, despite its technical limitations, and Intel-based servers have become a mainstream computing platform.

Of HP's long history of innovation, one event stands out in particular to me. That was HP's bold decision in the late 80s to become the first computer company to move its mainstream corporate computers to the still immature Unix operating system. HP endured two years of losses and layoffs while it made the painful shift. But the bet paid off as Digital Equipment Corp.'s and IBM's proprietary computing businesses imploded in the early 90s while HP snapped up market share.

Click to read the full opinion piece by TechTarget VP of Editorial Paul Gillin.


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