Compaq Gets Piece Of GTSI Military Contract

Hewlett-Packard may think twice before phasing out any Compaq systems after the deal that was revealed Monday. Compaq could get a significant piece of a five-year military contract awarded to systems integrator GTSI Corp., which has selected the computer maker as a subcontractor. The contract, which calls for $857 million worth of Alpha chips to be supplied to the Air Force, Army, and Navy, could mean significant sales of Compaq's AlphaServer computers running Tru64 Unix.

"It could be the biggest-ever Alpha chip sale," says analyst Terry Shannon of Shannon Knows Compaq. "If it's not the biggest, it's among the biggest." Rich Marcello, Compaq's VP and general manager of high-performance computing, has no doubt. "It's the largest single deal ever for Alpha," he says. "This was a performance and RAS [reliability, availability, and serviceability] win for us."

Joel Lipkin, senior VP of marketing and customer support at GTSI, says his company turned to Compaq because of the Army's insistence on a combination of performance; reliability, availability, and serviceability; and global reach. "Government customers will come to us with problems, and we'll take a building-block approach to beat their requirements with our resources and the resources of our partners," Lipkin says. He says he's not concerned about Compaq's pending merger with HP because he's already been preparing for the transition from the Alpha chip to the Itanium.

Compaq's Marcello says that, even if the merger with HP goes through, there will be a new Alpha chip in 2003, and some form of Compaq will sell and support those systems for three more years. Shannon doesn't expect user problems from the merging of Tru64 and HP-UX and the transition from Alpha to Itanium. "At the end of the day, it shouldn't mean a lick of difference with the apps."