Compaq launches computer services program

Compaq announced the "Computing on Demand" program, which

represents a new strategic direction this week as the company will try to

aggressively develop computer support services as a major source of revenue.

Compaq has been slow to embrace computer services and has seen competitors IBM

and Hewlett-Packard share most of the computer services business. Compaq

officials said the company will attempt to tie its hardware - PCs, hand-held

computers and server and storage systems - more closely to services like

installation and technical support.

The computing on demand program will let customers pay for computing services

on a "metered" basis, much like the way utility companies charge by

the kilowatt or cubic foot of water. Instead of buying, say 3,000 computers, and

paying separately for services, customers can pay for 3,000 "seats"

and get hardware and services together. "The hardware price is a fraction

of what worries a Chief Information Officer. The big companies are saying,

`Please, somebody manage this for me," explained Peter Blackmore, executive

vice president of sales and services at Compaq.

Information- technology services make up 40 per cent of the $1.63 trillion

high-tech sector. By 2004, Dataquest predicts, services will be 45 per cent of a

$2.55 trillion high-tech sector. And with no one holding double-digit market

share, the services industry offers plenty of room for growth. Compaq said it

successfully tested the program at companies like Ericsson and Blue Cross Blue

Shield of Michigan. Company CEO Michael Capellas, said Compaq must change its

image as a pure hardware company. "I see this as a great opportunity for

Compaq - if we step up to it."