Top Stories
- When two become one
- Telecommunications forum gets the green light
- Tag! You're it
- When two become one
Now they've gone and done it. As I write this it seems that HP's shareholders have mostly voted for the merger with Compaq. Compaq's lot have done so in overwhelming numbers, nine to one, but HP's vote is much closer.
How close? Well, nobody will tell us. Apparently it will take several weeks for the external vote counting firm to come up with a figure and only then will we know for sure whether the two IT giants will become one.
Walter Hewlett, son of the original Hewlett, says it's a "razor-thin" majority at best and he claims the potential is there for the vote to go either way. He's been an opponent of the move since almost the beginning much to the chagrin of HP CEO Carly Fiorina. If the vote goes against him, and is close enough, he may call for a recount so it could be months before the truth is out.
So what is Hewlett's problem with the buy out? Is it really as simple as HP buying its biggest rival? What's in it for the shareholders, for the company as a whole or for the end user? Surely it's going to create less competition, not more?
On the surface the businesses are similar--they both sell PCs and PC and Unix servers and and storage. But HP makes all its money from hard copy devices--printers and scanner--while Compaq has more a services arm. Both are fighting hard in a market where margins are razor thin.
The company that is going to be most affected by all this, IBM, has a worldwide policy of "no comment" on the merger. Big Blue always plays its cards close to its chest, sometimes not even letting you know which game it's playing, never mind what cards it has. But you can bet the IBM boardrooms are cluttered with contingency plans covering every eventuality.
Apart from IBM, Sun also will be given pause by the merger. On the PC front, Gateway ran away, Toshiba only looks after mobiles, and Dell does its own thing as a direct seller.
Locally the merger is sure to mean lay offs and a lessening of choice for the end user. Apparently that's okay by the Commerce Commission, which said the deal was fine by it, but I fail to see what the end user will get out of it, apart from a large number of discontinued lines as overlapping product ranges are culled.
What does this mean for the industry as a whole? Is it the end of the line for the old channel model? Perhaps it's some kind of economic indicator for the US or the "new economy" as a whole. It's clearly a sign of something but from here I can't tell what it is. Give it a few months and we'll all know. Give it a few years and we might even know whether it was the right move or not.
HP/COMPAQ: HP NZ bullish about future - IDGNet
HP/COMPAQ: CTOs predict merger will happen - IDGNet
Compaq says shareholders have approved merger - IDGNet
HP/COMPAQ: HP claims victory on early results - IDGNet
HP/COMPAQ: Hewlett holds on to hope on HP/Compaq deal - IDGNet
IDC picking merger yes vote - IDGNet
- Telecommunications Forum gets the green light
Yes, apparently it's all go. The forum, proposed in the telecommunications inquiry and enshrined in legislation, has been something of a commercial football for the telco players for months. However, finally they've agreed on the format for this voluntary organisation.
It works like this: Telecom, Vodafone and TelstraClear each get one vote. Two other votes are given to the conglomerate of smaller players in the market. To get any decision or issue discussed, a simple majority is all that's required. Nice and easy so far. The issue, be it "we want to introduce a new numbering scheme to manage traffic" or "why can't we have more control over the connection to our customers", or whatever, is then looked at by a working party which can report back within a set time.
From that point on, however, a unanimous vote is needed to get anything done about the problem. This is to stop everyone ganging up on one telco--guess which one--and demanding things that are unreasonable, which is probably fair enough.
But a unanimous agreement on anything at all is not only unlikely, it's just not going to happen. It's never happened. It never will happen. I mean, can you see a new player agreeing with Telecom, the incumbent, on pricing or access or service levels or anything?
I really hope the forum will be used, and be useful, and that the commissioner's job is made easier by it, but I'm fearful that it will be business as usual in the industry.
Still, I like to think MMP has changed our politicians and our politics, and I have high hopes for the new regulatory regime as well. Let's hope the forum, which was originally intended to implement the practical day-to-day solutions that come out of decisions made by the commissioner, has some staying power.
Swain welcomes telco group - IDGNet
- Tag! You're it.
Actually, not you, but Andrea Malcolm. That's right, I've reluctantly agreed to take six weeks leave and to not come into the office and to ignore my email and voice messages.
Damn, eh?
In my stead, Andrea will keep you up to date while keeping the industry on its toes. As chief reporter of Computerworld, Andrea has years of experience to draw on and is responsible for teaching me all I know about IT. Yes, it's all her fault, I'm afraid.
Be kind to her, and think of me while you're beavering away in your slave cubes. I'll try not to miss the office too much.