Solution Providers Stand Divided On Merger's Benefits

Some solution providers say the channel stands to gain more from two independent vendors competing for mind share, while others think the deal will spawn a more powerful channel ally with a deeper product line and added financial muscle.

"I'd just as soon not see the deal happen," said Russell Madris, president and CEO of MoreDirect, Boca Raton, Fla. "I'd rather see [HP and Compaq keep fighting each other. The more people you have competing against each other, the better it is for the channel."

HP shareholders are scheduled to vote on the merger March 19, and Compaq stockholders will vote on March 20.

Hope Hayes, president of Alliance Technology Group, Hanover, Md., said she wants the deal to go through. "The merger would give HP a strong presence and result in a company taking the best of both vendors," she said.

For example, Compaq's commercial desktop business would be big boost for HP, although Compaq's commitment to open software environments falls well short of HP's, Hayes noted. "The merger will get rid of some of the deadwood, like Compaq's proprietariness," she said.

Other solution providers, however, expressed concern that Compaq's growing direct business could taint HP's channel philosophy if the merger gets approved.

"I am not in favor of it," said Marie Graziano, CEO of Computer Consulting Services, Carrollton, Texas. "What is the gain? HP has a good channel attitude. I have sold Compaq for a long time, and then they decided to make life incredibly difficult for their channel. And I don't sell Compaq much anymore."

Yet Stephen Allen, president of New York-based Integrated Technology Systems, said the merger with Compaq could yield increased business for HP. The deal would boost HP's consulting business and enable the company to invest the resulting profits in research and development. "They will be better able to compete with IBM and distance themselves from Dell," Allen said.

Todd Barrett, networking sales manager at CPU Sales and Service, Waltham, Mass., also is optimistic about the potential HP-Compaq combination. "It may add some benefit to the SMB base and give us more leverage to compete," he said.