Compaq plans more direct sales

"We've taken a specific market sector -- the home and micro business -- and approached it with what is effectively and legally direct selling," Denton said, but added Compaq will use the help of channel partners. "We believe there are advantages in leveraging a channel such as local support and knowledge."

"This is just the beginning of a programme. Compaq has the goal of being a top three computer maker by the year 2000 and to do that we have to grow from an $18b to a $40b company. That means we have to go into market sectors we don't penetrate at present."

However, Denton said that he doesn't expect Compaq to sell direct to large businesses. "People go on about the direct model but Compaq is the number one in the UK and the world and we do it through an indirect model."