By John Dix and Marc Songini
Network World, 4/20/98

What does it take to succeed in this turbulent market?
Clearly, the customer relationship is No. 1. You want to be in a position where you're invited to the table for major corporate information technology initiatives, which requires competence overall. And I think with the acquisitions of Tandem and Digital, Compaq clearly has the capability to support not only any national corporate account, but any global enterprise account.

Is the service and support organization the crown jewel in the Digital Equipment Corp. acquisition?
I wouldn't call it the crown jewel. It's certainly a very important aspect of it. It's roughly 40% of the company in terms of people and resources, and accounts for, I'd say, just under 50% of revenue. But there are a lot of other valuable assets, from the field sales organization to the customer base.

To what degree do you take responsibility for Compaq's success?
I think it's been probably one of the more spectacular growth periods of any company. Back in '91 [when I took over], we were about a $3 billion company. Last year, we were $25 billion.
What I take credit for is going public back then with a major new direction for the company when there were few other senior people around. A large group left at the time. And that's when we laid the foundation for Compaq's completely different focus, from what we were in those days - a premium product, premium price company - to serving every PC need of any customer.
But now we don't want to limit ourselves to moving at the speed of Intel's chips and Microsoft's operating system. If we would have stuck with that strategic direction exclusively, we would have been aced.

Whom do you admire as a leader?
Jack Welch from [General Electric]. He's given the company, at different points in time, a significant new direction that turned out in each case to be very beneficial to the company. I think that's what it takes: constantly reinventing yourself and the company for future growth, because things keep changing so fast.

With Digital you have acquired OpenVMS and Digital Unix. Ultimately, do some of these go away?
Our customers are saying, "Assure us that you're not going to force us overnight to go to something else." And we said to them, "Be confident. We will continue to support these products until a different hardware architecture and related [operating systems] and application solutions give you exactly what you need." And whether that's five years from now or seven depends very much on how the technologies evolve. When will an [Intel] Merced generation be meeting all new requirements? When will industry-standard operating systems be able to meet their requirements?

What will be the new integrated pitch?
The big pitch is simply this: We can now give you your total enterprise solution. We can take on full responsibility and accountability. Almost regardless of what the customer's requirement is, we have the resources to carry it through to completion.

Compaq has verbalized plans to be one of the top three network players. How will you do that?
That's a strategy that is still evolving. We have made some good steps in 1997 with the acquisition of Microcom. This is working very well. We are mobilizing our global sales organization to sell the product in a highly organized way and establishing our position in the market.
In addition to that, we are looking at the strategic direction that we need to take. It will include partnering.

Do you view networking as a way to bolster your server/PC business or as an opportunity unto itself?
That's a possibility we're looking at strategically and could end up working with others who have more of a tradition in sectors that we believe will be of great interest in the future.

There's a lot of this IP-everything theory kicking around, the idea that networks will carry data, video and voice in IP packets. Is there voice in Compaq's future?
I think it will be a factor. I think where you have a given infrastructure, always something new comes up. It will take time, but it will clearly be a major factor.

Any guess on the time frame? Five years from now, 10 years?
I think it won't be that long. In my experience, everything around the Internet has developed faster than everybody anticipated, and I think that will be true here, as well.

Does the Tandem and Digital deal change your relationship with Microsoft?
It strongly enhances it. Besides us, who would you say is the next closest ally to Microsoft? Digital. Together we have the largest base of NT-accredited engineers in the world. I think that's where enormous power lies in this alliance.