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  • Compaq, Tandem Merger is Smooth: Compaq Japan's Pres.
  • April 29, 1998 (TOKYO) -- Hajime Takayanagi, president of Compaq Computer K.K., said that the company is performing well in terms of profits and sales, and he noted that no problems have arisen from the January merger with Tandem Computers Japan Ltd.
    Takayanagi, who had been the president of the former Tandem Computers Japan, answered questions in a recent interview.

    BizTech: In the months since the merger, has business been smooth?

    Takayanagi: The two companies are now completely consolidated in terms of organization and business. Synergy effects due to the consolidation are apparent.

    One example is that a salesman for the super-parallel processing Himalaya series server was able to obtain a large order by proposing the desktop PC Deskpro for client terminals.

    Before the merger, we didn't have specific preferences for personal computers as client terminals for the Himalaya series. But with the merger, we can offer Compaq products as client terminals in the business negotiations for a large order.

    BizTech: Were there any problems in the consolidation process of the two organizations?

    Takayanagi: I did not see any problems with the internal system including business rules, consolidation of product lines, marketing systems and other issues. The fact that both companies are young also helped considerably.

    Some differences were apparent in internal terminology between the former Compaq and the former Tandem, but that is of little significance. We are having a very smooth honeymoon.

    BizTech: Compaq Computer Corp. has a stagnant business in the United States, with little prospect for profits in the current quarter. What is the situation in Japan?

    Takayanagi: In the first quarter ending March, both sales and profits increased steadily from the first quarter of the last fiscal year.

    As for profits, the Himalaya series has contributed a lot, and personal computers are profitable.

    Compaq's poor business results in the United States in the first quarter were temporary. That was because of temporary inventory snags when the business model was changed from production based on projected demand to BTO/CTO (build-to-order/configure-to- order).

    Sales results for personal computers are good in the United States, Europe and Japan. Business is far from being bleak.

    BizTech: Why wasn't excess inventory seen in Japan?

    Takayanagi: Inventories at dealers never grew large in Japan.

    Compaq's Japan unit was not well equipped to accumulate inventories, and it was in a good position to transfer to the BTO/CTO mechanism.

    BizTech: Can you give concrete figures of business results?

    Takayanagi: I cannot disclose any concrete figures of units sold and the sales amount in Japan. This is the company policy of Compaq of the United States. However, I can say that business is going well.

    BizTech: A cooperation agreement was concluded with Otsuka Shokai Co., Ltd. in March to expand the PC business. Why did the company select Otsuka Shokai?

    Takayanagi: We concluded the agreement on the Channel Configuration Program (CCP) designed to build PCs for enterprises to exact user specifications.

    Under the CCP program, we demand that dealers clear dozens of strict standards regarding the fabrication facility.

    Compaq concluded the agreement with Otsuka Shokai because its CTO Center, the PC assembly facility inside its logistics center, met our high standards.

    We couldn't find other domestic PC dealers with assembly facilities comparable to those of Otsuka Shokai.

    BizTech: Compaq will merge with Digital Equipment Corp. What will be the result in Japan?

    Takayanagi: I cannot make any specific comments now. However, the Japan units of the two U.S. companies will not merge by any means, although newspapers have reported that there would be a merger in June.

    (Hi-Tech News Center)

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    Updated: Tue Apr 28 17:58:31 1998