A Year Ago: Compaq, Dell slug it out in PC servers

This story was first published November 12, 1996

Texan rivals Compaq and Dell are pushing hard to take advantage of a booming PC server business in the UK.

According to Dataquest market research, Compaq took its market share for the third quarter of 1996 to 39 per cent, with its nearest rival trailing on 9.6 per cent. In the PC mid-range server market, Compaq has a dominant share and growing, up from 54.7 per cent in the second quarter of 1996 to 65.2 per cent in the third quarter.

Compaq ascribed the growth to the success of new products with its Intelligent Manageability integrated network management tools.

However, Dell server business director Pim Dale said that Compaq was benefiting more from overall growth in the PC server sector and questioned its ability to compete in a market that is becoming more price sensitive.

"The NT/Unix wars are over and the NT/Wintel platform has won," Dale said. "The world is moving towards distributed LAN servers and people are beginning to downsize to Wintel machines. Also, we're successfully commoditising the market. Compaq's share growth is being taken from the no-names.

"We grew 115 per cent for the second quarter year-on-year in a market that is growing at something like 35 per cent. The latest IDC market research makes us number three, neck-and-neck with IBM, behind Compaq and Hewlett-Packard. Management tools are becoming off-the-shelf with things like DMI, NetView, OpenView and LANdesk Manager, so we can deliver competitively priced products. Margins will fall and the direct sales/build-to-order model puts Dell is in a perfect situation to take advantage."

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