I am pleased to send you the May report - has a lot of positive news and
progress despite the challenges in the overall market. Look forward to
seeing you at the next Board meeting.
< -----Original Message-----
< From: Executive VP, Sales & Services - Peter Blackmore
< Sent: Friday, May 25, 2001 7:53 AM
< Subject: May Blackmore Report
< [Compaq Confidential - Internal Use Only]
< To: Compaq Global Sales & Services team
< I'd like to start this month's report with a warm welcome to the 800
< employees of Compaq Financial Services, who "officially" joined the Sales
< and Services team on April 30. I say official, because they've been a
< valued partner with us since the group's founding in 1997, offering
< customers financing and asset management services around the globe. For
< example, you'll see many wins throughout this report that include CFS
< solutions. Earlier this month, I enjoyed meeting the CFS world
< headquarters team in Murray Hill, N.J., and hope to meet many others as I
< travel to the countries. Our continued focus as one team will be to
< present "one face to the customer" as we strengthen our alignment and
< drive even greater value for our customers.
< While the market continues to be a real challenge for not only Compaq, but
< for everyone in the industry, it's important that we stay focused on our
< objectives, yet recognize where we are winning. Customer acceptance of our
< technology and solutions continues to be high - note the long list of wins
< this month and our improved marks for customer satisfaction. We have a
< strong global balance, and we're creating unbelievable solutions for
< customers. We're seeing strong front log growth of services, which is a
< real differentiator for us and continues to be the lead element in many of
< our largest wins.
< Compaq is taking some tough actions such as the restructuring and reducing
< inventories - steps that will position us for leadership when the market
< rebounds. And we're seeing that same strategy with many of our major
< Recent studies by Morgan Stanley, Tower Group, Giga and IDC confirm that
< major financial institutions see this as a time to make investments in the
< "right thing" and come out of the economic downturn in a dominant
< position. The December IDC poll of 75 major commercial banks concludes
< that Compaq is ranked No. 1 in the industry in Business Problem Assessment
< and Technology Selection - beating IBM, HP, Oracle and Microsoft. Our
< North America Financial Markets group has been making long-term
< investments in Wholesale Payments Systems, Retail Banking Systems, Capital
< Market Solutions, ZLE for Finance and Wireless for Finance. For more
< information, see
< I know that by staying focused on our customers and doing the right thing
< for Compaq during this challenging time, we will continue to win the
< endorsement of our customers and partners.
< Our largest wins this month
< * Asea Brown Boveri (ABB) (Switzerland) - Renewed a three-year, $60M
< contract naming Compaq as its sole Microsoft reseller. The global B2B
< supplier in the areas of manufacturing, consumer, utilities, oil and gas,
< and financial services, overall, does $100M a year in business with Compaq
< throughout more than 100 countries.
< * America Online - Three-year, $150M contract as the preferred
< provider of high-end computing products, including parental control
< servers, Web-caching servers, login system, mailbox infrastructure and
< voice portal. The contract includes $22M in financing from CFS for the
< U.K. and Germany.
< * JC Penney - Topped Dell for a $15M per year ProLiant server contract
< after being named JC Penney's primary supplier of industry-standard
< * Kent School District (Washington) - Beat Dell for a $20M win for
< ProLiant servers, AlphaServer systems, iPAQ PCs, Deskpro PCs and Armada
< * LANL - $25M for AlphaServer systems
< * Marconi - $20M for ERP hosting and platform
< * NTL (U.K.) - $17.5M for a next-generation infrastructure to supply,
< build and manage an enterprise virtual call center. The deal also includes
< ProLiant servers and Professional Services
< * NYMEX (New York Mercantile Exchange) - Three-year deal that could be
< worth as much as $20M for AlphaServer systems running OpenVMS
< * Starbucks - Compaq and Starbucks Coffee Co. announced a five-year,
< $100 million deal earlier this month in which we will equip the coffee
< shop chain with wireless Internet access.
< * Toys R Us - Beat Dell for a $20M contract for ProLiant servers,
< desktops, AlphaServer systems and services
< * Xerox - $35M for WS8000 systems, displacing Dell
< Be sure to read about all the sales wins in this month's Sales Wins Around
< the World report. http://inline.compaq.com/wwss/wins/worldwins.asp
< Great strides in customer satisfaction
< On May 21, Technology Business Research (TBR) released its Q1 2001
< Customer Satisfaction Report focused on Intel-based servers, desktops and
< notebooks. The study is based on interviews that were conducted Jan.-April
< this year with IS/IT professionals and purchasing managers of 515 large
< U.S. companies (1000+ employees). TBR reported that Compaq achieved
< ratings increases in all categories - servers, desktops and notebooks -
< the only major player (Dell, IBM, HP) to do so.
< * ProLiant servers once again led the industry-standard server market
< in customer satisfaction.
< * Compaq moved from 4th place to 2nd place in desktops
< * Compaq satisfaction in notebooks improved slightly and we are now
< rated #2
< The study notes that, "A striking aspect of this quarter's analysis is the
< great distance at which Compaq has exceeded the competition for parts
< availability, scalability, server management, and overall hardware
< reliability" and in the consistency of its customers' satisfaction from
< quarter to quarter "while its competitors continue to show vulnerability
< to eroding customer satisfaction for the second consecutive quarter."
< For more details, see
< Compaq among the most innovative wireless companies
< Unstrung has named Compaq to its annual list of the "Top 25 Most
< Innovative Wireless Companies," our first time to make the list. The
< editors evaluated more than 1,500 companies, placing Compaq in the top
< 1.6% of innovative wireless companies. Unstrung emphasized our breadth of
< wireless offerings.
< Quality Supplier Award from USPS
< For the fourth time in five years, Compaq has been recognized as a U.S.
< Postal Service Quality Supplier Award winner in the Large Manufacturing
< category. The honor recognizes the effort by a large Compaq team to
< consistently deliver on a commitment to customer satisfaction.
< Four firsts at Best-Of-Breed Awards ceremony
< The sixth annual ComputerWeek Best-Of-Breed Awards reaffirmed Compaq's
< reputation for innovation. We earned first-place awards in the Enterprise
< Storage Hardware, Server, Desktop Computer and Notebook categories as well
< as second place in both the Backup Storage Hardware and Handheld & PDA
< Compaq reaches 1M Exchange 2000 seats
< Compaq has surpassed another major milestone in providing complete
< Microsoft solutions, becoming the first partner to reach one million
< Exchange 2000 Seats under contract.
< New TV ads debut
< Earlier this month, Compaq debuted new, hard-hitting TV advertising in the
< U.S. that sets Compaq apart as an enterprise computing company. The
< advertising, which can be viewed at an Employee Communications site on
< Inline, http://inline.compaq.com/hr/eecomm/serv/latestad.asp is the next
< phase in a brand effort that kicked off in September, and includes a TV,
< print and interactive campaign that will run in 27 countries.
< iPAQ Pocket PC receives Best of Show
< Great news from CERF 2001, a premier IT fair in Romania, where our iPAQ
< Pocket PC won the event's more prestigious prize, "Best of Show CERF 2001
< Romania." Romania Prime Minister Adrian Nastase attended the show,
< spending nearly 20 minutes in the Compaq booths where he used one of our
< PCs to surf the Web.
< Congratulations to newly certified Black Belts
< Congratulations to Carolyn Cricenti, Michel Duchesne, Bob Dufresne, Ryan
< Johnson, Naoyuki Kitami, Delia Matrecano, David McDougall, Robert Millsom,
< Thomas Peter, Nico Schutte, Johann Starrenburg, Kathy Thomas, Ren?
< Versteeg and Hans Weenik for receiving their Black Belt Certifications.
< Certification recognizes these professionals for demonstrating a high
< level of aptitude for Black Belt knowledge and skills. The process
< improvement teams that they supported have made a significant contribution
< to achieving organizational improvement goals and increasing customer
< satisfaction. http://inline.compaq.com/news/newscpq/qcs/blackbelt5-10.asp
< EMEA CS Channels Marketing and Sales
< In terms of dollars, these marketing activities in some of our smaller
< EMEA countries may not have the largest impact, but they do provide a
< tremendous boost to the business locally. They also highlight excellent
< examples of best practices that can be leveraged by other countries.
< * Portugal - CarePaq Outbound Telemarketing Campaign - A trial program
< involving a dedicated local Call Centre agent contacting 800 pre-screened
< warranty-only customers approaching the end of the first year of warranty
< resulted in the sale of 129 new CarePaqs (17% conversion). Plans are to
< roll out this program in other EMEA countries.
< * Finland - Electronic CarePaq Growth - Three-fourths of all CarePaq
< sales in Finland are now in the form of electronic CarePaq sales. A May
< Day advertising campaign in national press featuring eCarePaq alongside
< hardware resulted in 600 new eCarePaq sales equating to an incremental
< CarePaq attachment rate increase of 5%. As other EMEA Countries mirror
< Finland's leadership position on eCarePaq penetration, similar campaigns
< are planned.
< * South Africa - iPAQ CarePaq Bundle - To provide further competitive
< differentiation and to improve customer satisfaction, CS Channels
< Management in South Africa has agreed to bundle a one-year Advance
< Exchange CarePaq on iPAQ handhelds, which is forecast to improve CarePaq
< revenue by $270K or 25% for the year.
< * Spain - Presario Bundle - To drive customer satisfaction and loyalty
< and to provide a unique differentiator in the marketplace, Spain will
< bundle a 2-year, pick-up and return, five-business-day CarePaq on all
< Presario portable sales. Initially, 6,500 are planned to ship in May, with
< a total of 17,000 units in 2001. This will generate incremental CarePaq
< revenue of nearly $700K and add approximately 10% to the annualized
< CarePaq attachment rate.
< IBM's acquisition of Informix - Compaq's position and field advice
< On April 24, IBM announced its intention to purchase Informix Software.
< Compaq and Informix have had a long relationship in the database market,
< and have many mutual customers that have implemented mission-critical
< applications based on Compaq/Informix data management solutions.
< Naturally, many of these accounts are concerned about IBM and Informix's
< long-term commitment to supporting Informix products on Compaq platforms.
< For more information on Compaq's position on the merger, see
< Compaq now No. 1 PC maker in Malaysia
< Compaq surpassed Acer last year to become the top PC vendor in Malaysia,
< according to an IDC study. Acer had held the crown from 1992 to 1999,
< prior to last year, when we recorded market share of 10.2 percent,
< compared to Acer's 8.2 percent. Dell was third at 7.6 percent, followed by
< HP (5.4 percent) and IBM (4.5 percent). We led in desktops with 9 percent
< market share and were second to Toshiba in portables with 17 percent
< Business Development Group 1Q highlights
< The Business Development Group (BDG) is the EMEA organization responsible
< for developing Compaq business in 98 countries. Its focus is on both
< developed as well as emerging markets in EMEA. In Q1, the BDG team
< achieved its fourth consecutive quarter of double-digit revenue growth in
< U.S. dollars.
< * $403M in revenue, up 18% in local currency (11% in U.S. dollars)
< year over year
< * $111M gross margin, up 27.6% from 1Q 2000, up $9.8M
< * Achieved target of $35.2M in operating expenses
< * Operating profit contributed $74.2M to EMEA's bottom line,
< representing 18.4% of BDG's revenue
< * Most countries showed double-digit growth, led by Russia (87%),
< Romania (56%), Greece (33%), Czech Republic (21%), South Africa (18%) and
< MDG (17%)
< China Technical Information Center Web site
< Greater China has developed a new Web site - China Technical Information
< Center - for its sales and pre-sales employees. The site is easy to use
< and secure, providing a Chinese-based information-sharing platform that
< consists of proposal, product, technology and solution information,
< success stories and practical skill information.
< Compaq Global Services highlights
< * Join the North America Virtual Presenter training event - "The
< Compaq PC Utility Solution - Your Competitive Weapon" - to learn more
< about selling Global Services and Compaq Financial Services as value-added
< desktop solutions for customers. The training is June 12 at 10 a.m. and 2
< p.m. EDT. Go to http://vp.mro.cpqcorp.net to log on and participate.
< * "Wireless - the Art of the Possible," is the next in the series of
< Professional Services Thought Leadership Customer TeleSeminars. Martin
< Reynolds, group vice president at Gartner Group, will define the wireless
< revolution and describe how companies are using wireless in business
< applications. Go to http://ps.inet.cpqcorp.net/sm/t_leadership/ to learn
< more and please invite your customer!
< * The Association for Information and Image Management (AIIM) has
< awarded Roberto Rivera the prestigious designation of Master of
< Information Technology. AIIM is the global industry association connecting
< users and suppliers of information management technologies. Nearly 30,000
< professionals from all over the world attended the AIIM 2001 Conference
< and Exposition in New York City, where the award was presented. Roberto is
< a senior solution architect and the technology manager for Professional
< Services' Latin America & Caribbean (LAC) region. He is the first Compaq
< employee to receive this designation, which recognizes exemplary
< professional achievements, including numerous successful electronic
< content management solutions that Roberto architected for Compaq clients.
< * For the fourth consecutive year, Novell named Compaq North America
< Customer Services (NACS) winner of its prestigious Service Excellence
< * North America Customer Services recently announced the sale of its
< One Millionth CarePaq! Congratulations and thank you went to resellers and
< partners who contributed towards this volume achievement and this great
< services accomplishment.
< * Hong Kong Customer Services opened a new service center in the heart
< of Tsim Sha Tsui, a major commercial and shopping district of Hong Kong.
< The Center provides value-added services to end users, Small Office and
< Home Office (SOHO) users and small businesses.
< * In July, a Compaq Services Center will open just south of Taiwan -
< in Kaohsiung. The center will provide better support to the area and move
< us a step closer to our Taiwanese customers.
< North America e-Commerce and CRM highlights
< * On May 1, Salomon Smith Barney made a transition from GBL extranet
< to CGBX e-Procurement, operating under CommerceOne Hosted Buy Site with
< the assistance of the worldwide e-Commerce organization.
< * Marketmile is yet another SMB Digital Marketplace (DMP) brought live
< this month. Marketmile has a dedicated 500-person sales force being given
< incentives to drive business through the Marketmile site. Compaq will
< receive strategic placement on the site, with all new business being
< pushed to Compaq.
< * A new U.S. privacy statement was enacted May 4 on Compaq.com to
< inform visitors about the types of information gathered online, how Compaq
< uses that information, whether we disclose it to anyone and the choices
< visitors have about their information.
< Global Alliances news
< * Commerce One - Compaq had a big presence at the Commerce One eLink
< event in New Orleans, including panel participation, collateral and a
< booth. Commerce One announced that its hosting partnership with Intel
< Online Services would run exclusively on Compaq servers.
< * SAP - In Q1, we delivered a 45% increase over the same quarter 2000
< in new installations, which represented nearly $290M in revenue - holding
< onto our number one market share position. Compaq EMEA led the way,
< producing 50.3% of all new SAP Windows 2000-based installations in the
< region and 11.7% of all new SAP RISC UNIX installations in the region.
< Compaq Financial Services highlights
< CFS has introduced GlobalEdge, an industry-first suite of offerings that
< enables multinational businesses to streamline the way they access and
< manage IT investments.
< Sales and Services Venture Group opportunities
< Congratulations to the field sales force for brining these opportunities
< to the attention of the Sales and Services Ventures Group:
< * ICICI - This is the first Compaq equity investment in India. We
< invested $4 million in a private e-commerce venture, which is part of a
< large local bank. ICICI converted from Sun to Compaq, as we won preferred
< provider status within ICICI group. This investment provides Compaq the
< opportunity to penetrate a premier banking and financial services account
< in India.
< * QICK, plc. - Invested $1.45 million (half in products) in a
< subscription-based, online membership community, providing PCs and
< Internet access targeted at consumers and affinity programs in the UK.
< Gray Market compliance training
< More than 8,000 field employees have taken the Gray Market Compliance
< training. The Cross Border Office has received numerous e-mails and phone
< calls with information that is helping us combat the gray marketing of our
< products. Report any evidence of gray marketing to your manager and the
< Recent reviews of partners include:
< * The first review of a U.S. Enterprise partner, Avnet Inc., resulted
< in an equitable reimbursement to Compaq and also identified weaknesses in
< our systems that are being corrected.
< * In Asia Pacific, the review of channel partner Tech Pacific
< uncovered gray market transactions.
< * This quarter, the Partner Review program is focusing on another U.S.
< enterprise partner. Several partner reviews in EMEA will take place later
< this year.
< ABG headlines
< * Results from the Home and Office Access 4Q00 WAVE customer
< satisfaction survey show that we're closing the "sat-gap" with our
< customers in the Desktop segment - with 78% top two box scores ("very
< satisfied" or "completely satisfied") vs. Dell 81%, HP 68% and Gateway
< 59%. We had a 14% year-over-year increase as compared to 0% for Dell, -5%
< for HP, and -13% for Gateway.
< * Presario portable PCs remain No. 1 in U.S. retail sales with 34%
< market share, according to March 2001 NPD Intelect. Presario has held the
< leadership position since September 1998.
< * Compaq EMEA increased its total desktops market share to 15%,
< extending its share lead to 5.4 points over No. 2 Fujitsu-Siemens,
< according to IDC 1Q01 results.
< * Our Microportable Projector team set a new record in March, shipping
< more than twice the number of projectors as its previous best month. We
< now hold the No. 3 spot in the N.A. microportable market with 17% share.
< * Autodesk, Inc., a provider of design software and digital content
< creation tools, will provide 2,500 iPAQ Pocket PCs to its worldwide sales
< force and channel partners.
< Awards & Reviews
< * The 2001 Industrial Design Excellence Awards bestowed a Gold Award
< for Design Excellence for the MP2800 Microprojector.
< * The Presario 7000Z received an Editor's Choice Award from CNET,
< which referred to the 7000Z as "digital dynamite, " proclaiming "this
< desktop is as fast, vast and pretty as a system can be."
< * The iPAQ Music Center was featured in reviews in the June issue of
< FamilyPC ("Internet Radios: The Next Wave") and the May issue of Sound &
< Vision ("Multimedia Maven").
< * The iPAQ Pocket PC H3650, named "Best in Show" in the June issue of
< Mobile Computing Magazine, is also featured on the magazine cover.
< * In an article titled, "PDA Wars: Round 2," Time magazine said this
< about the 64MB iPAQ Pocket PC H3670: "Power users can tap oodles of data
< with this silver gem."
< * Desktop Engineering gave a sparkling review of the Compaq TFT5005
< monitor, saying, "Everything about the TFT5005 was perfect."
< Business Critical Server Group news
< * The N.A. High Performance Servers (HPS), NonStop and Telco
< organizations have merged into one Business Critical Server Group under
< the leadership of Scott Bowman.
< * Channels HPS has launched a new partner recruiting program with
< dedicated resources focused on attracting new Direct VARs, targeted HPS
< Compaq Authorized Enterprise Resellers (CAERs) and creation of selling
< alliances with key ISVs/consultants and our existing CAERs and enterprise
< Tru64 AlphaServer Unix headlines
< * Compaq installs the world's most powerful commercial supercomputer
< and biggest server farm to support protein research.
< * The AlphaServer ES40 system has established a new performance record
< for mid-range servers in the SAP Business Information Warehouse Version
< 2.0 B benchmark. http://biz.yahoo.com/prnews/010422/dasu002.html
< NonStop headlines
< * WebServer Online magazine recognized our NonStop Himalaya systems
< supporting the Rockliff MailSite, writing, "With the Himalaya's notorious
< scalability backing it up, MailSite could soon be responsible for 'tens of
< millions of mailboxes.'" http://webserver.cpg.com/news/6.5/n4.shtml
< * A recent CNET article highlights the Zero Latency Enterprise (ZLE)
< architecture: "ZLE and the servers play into Compaq's strength of massive
< scalability and fault tolerance as well as its presence in the
< mission-critical environments of top blue-chip accounts."
< OpenVMS headlines
< * IBM announced a significant reinvestment in OpenVMS with the
< availability of its new middleware product, MQSeries V5.1, which runs on
< the AlphaServer/OpenVMS platform.
< * OpenVMS business grew by 26 percent year-to-year in Asia Pacific,
< according to an IDC study.
< ISSG headlines
< * Compaq again captured the No. 1 position in worldwide in sales of
< industry-standard servers in the first quarter of 2001, controlling more
< than one quarter of the global market and shipping 60,000 more units than
< second-place Dell and twice as many as IBM, according to the latest
< figures from research firm Dataquest.
< * The ProLiant DL360 was named best Network Server of the Year by
< Network Magazine in its May 2001 issue.
< * Compaq will use Intel low-voltage processors in our innovative,
< hyper-dense server architecture to lower power consumption while
< increasing density and enhancing performance in forthcoming front-end
< servers. http://inline.compaq.com/news/newscpq/industry/Quickblade.asp
< IMC tools keep getting better
< The Product Bulletin/QuickSpecs Web site and CD-ROM from Worldwide
< Integrated Marketing Communications (IMC) continue to improve. New
< features on the site include North America product photos, flyers and
< archived QuickSpecs, dating back to 1997, while the 2Q CD has improved
< search and download features.
< 'Shop-floor' kiosks to deliver benefits information
< Compaq and Benefitfocus.com earlier this month announced a partnership to
< deliver touch-screen kiosk technology to the employee benefits
< marketplace. The partnership will use Compaq hardware, support and
< services as the platform for delivering the Benefitfocus Internet and
< kiosk-based benefits enrollment and communication application.
< Many thanks for your efforts this month. Let's continue "winning in the
< streets" to turn in a strong quarter two!