Getting used to new names for divisions and product lines is the key adjustment educators will have to make as they deal with the new Hewlett-Packard Co. (HP) that officially launched May 7, according to company executives.
The new HP is the result of the mega-merger between Hewlett-Packard and Compaq Computer Corp., and as they publicly unveiled the changes that schools and other consumers can expect from the merger, company officials were careful to stress that these changes should have no ill effects on the level of service their customers have come to expect from both HP and Compaq.
On the contrary, the combined resources of the two companies will enable the new HP to give educators even better service, officials vowed.
Former Compaq employee Jim Weynand will become the general manager for the new company’s Public Sector Organization, which handles K-12 education sales and marketing. Weynand will report to former Compaq employee Jim Milton, who has been appointed the regional general manger of the Enterprise Systems Group for the Americas.
The new HP, as the company now refers to itself, has four distinct business lines in its Public Sector Organization: federal government, state and local government, higher education, and K-12 education. The latter three categories will be grouped together and referred to as SLED by company insiders.
At press time, no one had been named to run these lines of the business, according to George Warren, director of K-12 marketing in Compaq’s educational division, who observers expect will be retained in the same position with the new HP.
Most products will adopt the HP name, including the new Compaq iPaq handheld device, which has been renamed the HP iPaq. Compaq ProLiant servers, popular among educators, are now called HP ProLiant servers.
Commercial desktop and notebook computers will retain the Compaq name, so HP can leverage Compaq’s strong brand recognition in desktops and notebooks. Most business computers will migrate to the Compaq platform and name.
The HP Omnibook products will continue to be offered through 2002, although the HP Vectra products will be phased out. In the consumer market, both Compaq Presario and HP Pavilion lines will continue where demand is high.
The best of the current HP Jornada handheld technology will be engineered into the HP iPaq, and Jornada will be phased out in 2002, the company said. HP will continue the Compaq line of thin clients, but they’ll also adopt the HP name.
Because HP is the leader in personal inkjet printers, scanners, and all-in-one digital imaging devices, Compaq-branded products will be phased out. As for digital projectors, the company will combine the HP and Compaq product lines under the HP name, phasing out specific projectors over the next 12 months.
“Even all of our shirts and trade show booths” will carry the HP name, Warren said: “We will quickly migrate the Compaq name out of the program. Everything will soon be HP. [The Compaq name] will only survive through notebooks and desktops.”
Warren said the merger will lead to an expansion of services for K-12 education customers, such as more technology outsourcing and infrastructure management. Educators won’t notice many personnel changes at first, he said: “The same people our customers are familiar with will still be there.”
In fact, the merger is making it possible for HP to give more attention to school customers than it could before, Warren said.
“We needed the resources and the additional focus in the field,” he said. “Frankly, there is no other place that needs the level of attention or the creativity than this [market] space.”
Educators also can expect more innovation from HP in the future, Warren said. “This merger allows us to take more risks than other companies,” he said, because the combined company’s larger customer base will provide more seed money for the company to try new things.
Whether educators buy into this line of reasoning remains to be seen. Some school officials have said they plan to take a wait-and-see approach to the new company and its combined product lines, not wanting to risk an investment until the full effects of the merger are known.
Some analysts, meanwhile, were quick to praise the company for how it has handled the merger so far. Analyst Paul McGuckin, a Gartner Inc. vice president, said he could not think of another technology merger in which so much detailed product information was available on the first day.
“In general, I think they did a great job between making hard choices and keeping revenue coming in,” he said. “There are still some areas where I think they haven’t reached the final conclusions on what to do, but the team is to be really congratulated in having this much ready on day one.”
HP still expects to cut as many as 15,000 jobs over the next two years, with many positions lost through attrition and voluntary severance programs. Layoffs will be mostly completed within six to nine months, HP chief executive Carly Fiorina said.
HP is retaining its headquarters in Palo Alto, Calif. It acquired Houston-based Compaq for $19 billion in stock over vigorous opposition from the children of HP’s late co-founders, including former HP director Walter Hewlett, in one of the closest shareholder votes in Silicon Valley history.
HP hopes that by buying Compaq, it can create more complete packages of high-tech products and services while squeezing out at least $2.5 billion in costs by 2004. Hewlett had contended it would be too risky and would increase HP’s reliance on the PC market at the expense of its highly profitable printing division. Hewlett has since expressed his support of the merger and the new company.
Material from the Associated Press was used in this report.
Detailed information on product changes