VARBusiness 500 Sees Little Upside in HP-Compaq Merger
More than two-thirds of the respondents think the ongoing battle between HP management and the families of its co-founders who have come out against the deal, is hurting the company's image. In fact, close to three-fourths of the respondents (71 percent) believe the dispute has damaged HP's reputation in the marketplace.
With just over a month to go before the company's much-anticipated shareholder vote on March 19, the VARBusiness 500 survey seems to imply there is little optimism among solution providers that the two companies can be successfully integrated. The message: It looks like CEO Carly Fiorina and her team at Hewlett-Packard still have a lot of work left to do convincing their partners that the proposed $24 billion acquisition of Compaq is a good idea--at least as it relates to the industry's top solution providers.
More than two-thirds of the VARBusiness 500 executives polled (68 percent) said they don't believe the proposed acquisition will be completed at all. And if the deal does go through, only about a quarter (27 percent) said they have confidence the current management teams can execute on a strategy for successfully combining the two companies.
But perhaps more troubling for HP and Compaq executives is that a large majority (93 percent) of the VARBusiness 500 executives surveyed believe their own customers are confused about the benefits of the merger. Such a strong sentiment of perceived confusion among clients--if it holds true throughout both companies' larger solution provider communities--could spell big trouble for Fiorina and Compaq CEO Michael Capellas, as well as their respective management teams, as they try to impress upon shareholders the idea that the deal makes sense to buyers of IT solutions.
Specific to the solution providers' businesses, almost three-quarters of those polled (71 percent) believe the merger, if completed, won't result in any benefit to their own organizations. But interestingly, only about a quarter (29 percent) believe the combined entity would be a greater services threat to their own organizations than either company currently is alone.