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7/30/1999
02:37 PM
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Compaq To Intro New Services Program

Compaq Computer next week will introduce new levels of service authorization for VARs designed to generate more business among small and midsize companies. The Compaq Services Network program, which the vendor is scheduled to unveil Tuesday before its PartnerVision conference in Houston, reflects Compaq's need to deliver packages of enterprise-class services and hardware directly, while apportioning higher-margin services for the midmarket to its channel, Compaq officials say.

About 3,000 resellers today are authorized to fulfill pre-packaged, extended-warranty maintenance and repair services on behalf of Compaq, according to Marci Meaux, Compaq director of worldwide channel services. Next week, the company will begin a "Premier Services Reseller" authorization for hardware VARs, granting them permission to quote non-standard services such as network configuration and integration, that Compaq would deliver. The vendor also aims to double its tightly controlled group of 250 "Systems Service Providers," enabling more consultants to perform asset management, network installation, and systems integration on behalf of Compaq.

"The big focus of Compaq Services Network is small and medium business. Compaq is taking more of a direct lead with our large enterprise customers, and we'll use VARs to extend our reach," Meaux says. "We have the capability ready to go. This isn't something we're talking about and will roll out later."

In addition, Compaq plans a "Professional Services Provider" designation for later this year, which would allow partners to share Compaq research and development information. Compaq will also grade consultants on customer satisfaction for integration services they perform.

The moves come as Compaq aligns its 27,000 service employees within the same division that sells enterprise servers, storage, and other hardware demanded by data centers. In a conference call with analysts this week, Compaq's new CEO, Michael Capellas, said increasing Compaq's 6% growth in 2Q service revenue by moving to market faster is a priority.

Yet analysts say that as Compaq tries to forge more direct relationships with large companies, the vendor needs to leave more than lower margin extended warranty service for its channel partners. "The problem is that you end up walking a tightrope," says Matthew Nordan, computing analyst at Forrester Research. "You have to capture deals that are large enough to be profitable, but you can't upset the channel so they go somewhere else for hardware."

According to Meaux, Compaq aims to double its annual service revenue to $15 billion by 2002 and drive another $85 billion through the channel.

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