Eckhard Pfeiffer has left the building

By : |April 18, 1999 0

Goodbye, Mr. Pfeiffer.
Compaq has been going through tough times with
poor first quarter results at a time when rivals like Apple and Dell have been doing well
and other IT giants such as Intel seem to be going strong. The company now is faced with
losing not only its CEO but also the Chief Financial Officer Earl Mason. Pfeiffer had
dismissed the bad results claiming that it was a maliase that affected the entire PC
industry. Now it seems that something was rotten in the state of ComDig.

We don’t do direct sales
Recent problems have included
a failure to capitalize on the direct sales model used very effectively by rivals Dell and
Apple. Compaq had stopped selling on the Net claiming that it was going to review its
sales model. Just a few months ago, Compaq was confidently swallowing Digital and talking
about going head to head with IBM as the one-stop company for everything from the desktop
to the enterprise.

A massive case of indigestion?
Compaq has worked its way up
from being just another PC box maker to the No 1. For a while it seemed that the company
could do nothing wrong. However in recent months it has been busy digesting Digital and
competitors have raced ahead in aggresively attacking the new PC buyer (Apple’s iMac was a
stunning success in this category).

We’ll see you in court
Shareholders, meanwhile, have filed two cases
against the company for hiding facts that would’ve shown that PC sales were slowing down
thereby letting company executives sell stock at a higher price.

End of the road
Compaq still has a powerful brand image and
it’s acquisition of Digital should pay off in the long run giving it an all important edge
in gaining entry into the Enterprise market with Tandem/Alpha being its two weapons. Still
the company needs to take a long hard look at its sales model and focus more on sales over
the Web, which is where Dell has been making its long strides towards the position of
Numero Uno PC maker. It’s a pity about Eckhard Pfeiffer. He came in when Compaq was in
trouble and made it the top gun of the industry. Now he’s leaving in a cloud of dust due
to a series of minor mishaps that’ve snowballed into an avalanche. At the end of the day
it’s similar to what George Bush faced at the end of his presidency. Bush had done
everything he could to stimulate the economy and the recession was over when he lost the
election to Clinton. Clinton then got all the credit for the revived American economy.
Similarly, Pfeiffer’s put in the seeds that give Compaq all it needs to be another IBM.
But who gets the credit? The next CEO? Sometimes, life and business aren’t very fair.

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