InformationWeek

December 22, 1997

Compaq Leads NT

New reseller setup captures market for NT workstations

ith the help of its recently revamped reseller infrastructure, Compaq Computer is leading the Windows NT workstation market, according to a recent study by an IT research firm. In a report released last week by Dataquest, the research firm stated that Compaq shipped 28.2% of Intel-based NT workstations in the third quarter-more than any other vendor.

The computer maker acknowledged that it didn't make the climb without assistance. An enhanced reseller network was key to Compaq's success, says David Parsons, the company's director of workstation marketing.

Over the last year, Compaq has recruited about 60 highly skilled technical resellers, among them RISC-based and value-added resellers hot on Windows NT. The strategy hinged on bringing Compaq's expertise in horizontal markets to the more hands-on, technical vertical markets. Compaq is leveraging channel partnerships to push into 16 vertical markets, such as electronic design automation and geographic information systems.

"Resellers are nowhere more important than in the workstation area right now," Parsons says.

Right Relationships
Compaq recognized that success in the workstation market dominated by RISC chip players such as Sun Microsystems, required a fundamentally different approach than selling PCs did. "Compaq has been one of the few companies to understand that this is so, and they've made the right relationships, opened the right channels, to be successful," says Peter ffoulkes, a principal analyst for Dataquest.

Compaq sees a potentially bigger role for traditional resellers, though. There is a requirement in the market for a new breed of [hybrid] reseller, who can leverage horizontal expertise into vertical markets, Parsons says.

Right now, Compaq is slightly ahead of Hewlett-Packard for the top spot in the Windows NT workstation market. HP's strategy differs from Compaq's; the Palo Alto, Calif., company is leveraging its existing Unix penetration and offering customers the choice of Unix or NT workstations.

"By simplifying our product line, we believe we can eclipse the competition in the unit volume in the technical marketplace," says Larry Anderson, market communications manager for HP's workstation systems division.

Dataquest analyst ffoulkes cautions that Compaq's cry of victory could give way to HP's claim to the crown next quarter. "But overall, I expect Compaq to continue to do well," he says. "HP has been selling workstations for a while, and Compaq has done extremely well its first year in the market."

Maximum Performance
Compaq entered the workstation market in October 1996 with the Professional Workstation 5000. The CPW 5000 and 8000 series are built around Intel's 200-MHz Pentium Pro processor. The latter uses four CPUs for delivering sophisticated simulations, rendering 3-D animation, and performing complex scientific computations. The 5100 and 6000 series workstations use either an Intel 266-MHz or a 300-MHz Pentium II processor for use in mechanical design, 3-D animation, and video editing.

The workstations maximize performance by using an architecture design that includes dual memory controllers and dual-peer PCI buses, according to Compaq officials.

Parsons likened success in the workstation market to running a marathon. Compaq's race, he says, is about two-thirds complete, but about a year from being over.

On Jan. 5, Compaq will complete the integration of Tandem Computers into its operations and add a chunk of those resources to its workstation effort.

"We're taking the best of our mainstream market model and marrying that with just enough infrastructure to reach the technical vertical markets," says Parsons. "And when you add the Tandem piece to that, you have a clear direction of where Compaq is headed."

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