Compaq won health care deals worth $300 m despite merger

Peter Henderson

SAN FRANCISCO: The expected chief of high-end computing at the merged

Hewlett-Packard Co. and Compaq Computer Corp. said on Wednesday that recent

health care industry deals for $300 million showed customers wanted the one-stop

technology shopping promised by the merged HP.

Compaq was keeping customers and had signed the deals with health care

companies since announcing in September plans for the merger, Peter Blackmore,

executive vice president of sales and services at Houston, Texas-based Compaq,

said in a telephone interview.

"We haven't lost our momentum," he said, adding that the deals also

proved customers had not abandoned Compaq, despite the impending merger, which

spurred a nasty and vocal battle over the companies' future.

Blackmore will take over the high-end computer servers group at HP if the $19

billion merger goes through. HP has said shareholders approved the deal by a

slim margin last week, but official certification is expected to take weeks.

The merged company is betting that big customers will choose to buy all their

gear from one shop, although analysts have questioned whether corporations with

different types of machines running different programs would not use a variety

of suppliers.

Compaq said that since the merger was announced it had done about 14 deals

for servers and services to health care companies worth some $300 million over

three to five years. Compaq has already announced a number of those deals, which

build on the roughly $1.2 billion in North American health care sales that

Compaq had previously.

"We see it as very natural that you will have high end Unix, Linux, with

a range of operating systems living alongside each other. Almost all customers I

go to have a mix of that," he said. "The norm is a mix, and I don't

see that changing."

One new example is a $10 million, 2-year deal with San Diego-based Sharp

HealthCare which includes Himalaya mainframe-style servers, Alpha servers

running the high-end Unix operating system, Microsoft Windows-based low-end

ProLiant servers, Compaq's storage area network and wireless communications.

Other health care customers included the Medical College of Wisconsin,

Virginia Commonwealth University's Medical College of Virginia Hospital, Baptist

Memorial Health Care Corp and Cardinal health.

"Increasingly they (customers) want the end-to-end capability, not just

Unix, and that enables us in front of the customer to differentiate ourselves

enormously from Sun Microsystems, and when we merge, the differentiation gets

even broader," Blackmore said.