On Compaq's New Menu: Software And Services

The events of last week provided the latest evidence that some major trends are reshaping the computer industry in fundamental ways--changes that will have long-term impact on how businesses buy and deploy computer systems. Trend No. 1 is that computer makers are finding it hard to rationalize the cost of building their own RISC processors and are turning to Intel instead. The second trend is that even the hardware business is morphing into a services business.

Compaq brings these trends into sharp focus. As senior editor Paul McDougall reports in this week's cover story (p. 18), Compaq is moving away from building its own proprietary microprocessors, embracing Intel's new 64-bit Itanium chips across its high-end server line, and promising to expand an already sizeable services organization. It's hard to argue with the logic of these moves. As superb as Reduced Instruction Set Computing chips have been for years, they're expensive to develop and manufacture. Also, most everyone would agree that hardware companies need to provide a wide variety of excellent services to keep their customers happy.

But that doesn't mean this is all going to be easy for Compaq--or its customers. Essentially, Compaq is planning to move from longstanding and stable architectures--Tru64 Unix and OpenVMS on Alpha, and NonStop Himalaya on Mips--to Intel's largely unproven 64-bit chip. The devil will be in the details of making it happen. Unix on RISC runs many of the business world's key applications. By comparison, Compaq has yet to ship anything on Itanium.

The nuances aren't lost on Compaq's customers. "It's difficult to evaluate how our systems are going to perform on a different chip architecture because right now we don't have anything to evaluate," says Joe Pollizzi, deputy head of the engineering software services division at the Space Telescope Science Institute.

Compaq is already a major player with some 38,000 services employees. But it still has plenty to prove. Does a company with its roots in the PC industry have the experience to advise businesses on their hardest-to-solve business problems? If it does, how will Compaq distinguish its services from those offered by other big computer makers?

How does all this sit with you? Is your company ready to kiss RISC goodbye and go with Itanium? Do you want a services partner that would like nothing more than to sell you some of its hardware? Let me know at the address below.

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