Compaq, Digital: They've got that merging feeling

Summary:By now you've heard the news: Compaq Computer Corp. is buying Digital Equipment Corp.

By now you've heard the news: Compaq Computer Corp. is buying Digital Equipment Corp. for $9.6 billion in cash and stock. The largest acquisition in the computer industry, the merger portends more consolidation in the coming year among hard-pressed hardware companies.

Compaq wants to expand from its PC business to the world of bigger iron and corporate computer networks and services - a world that Digital still dominates. According to Digital Chairman Robert Palmer, "It gives us the scale and resources to make continued investments in key technologies and services." Compaq said it intends to operate Digital as a wholly owned subsidiary, pending regulatory and shareholder approval.

Portending the future?

What does the Compaq-Digital deal mean for Mac managers? First of all, it means that mixed platform shops will have one fewer vendor to deal with - which ought to improve service and support, especially for our Windows NT servers and even for the cheap Compaq Windows 95 iron we've been forced to deploy in our companies.

Second, it means improved NT networking support and, in the long term, better NT administrative tools for those of us who choose Compaq-Digital servers.

Third, it means that other networked computer hardware vendors, such as Sun Microsystems Inc. and Silicon Graphics Inc., will have a tougher time selling us their Unix-based networks and servers.

In Apple's court

What should be Apple's response to this big merger? No matter what markets Apple believes it is concentrating on, it has to play nice with the other computers and networks in an organization. And what better place for Apple to forge a new sense of playing nice than by working more closely with its Windows competition?

Consider this scenario: Apple sidles up to Compaq-Digital and gets even cozier with Microsoft Corp. It offers to do whatever it can to be a good NT corporate citizen with Compaq-Digital and Microsoft, and maybe even be an OEM for some of their NT products. In return, Compaq-Digital and Microsoft work to develop a reliable and solid Mac NT client.

It's true that such a scenario may simply hasten Apple's early retirement, by making it easier for content-creation customers to migrate to NT from Mac OS. But it's also true that this is going to happen anyway, unless Apple gives its customers some compelling reasons to stay.

Playing nice with NT in a Compaq-Digital corporate world might give Apple some breathing room to build its content-creation niche and allow it to pursue more traditional corporate markets with products such asWebObjects.

This is especially critical if Apple becomes a Wintel vendor - a strategy I now believe is critical for the company and for Mac OS computing to continue.

Don Crabb welcomes nice, thoughtful comments at don@doncrabb.com. You can also check out his Web page at http://www.doncrabb.com. Nasty, mean-spirited comments may be sent to null@bitbucket.com.

Topics: Apple, Hardware, Microsoft, Operating Systems, Servers, Software, Windows

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