[Sm@rt Reseller] - As rumored since last fall, Compaq Computer Corp. has announced
its acquisition of Inacom Corp.'s distribution business for approximately $370
million in cash. The deal will let Compaq re-engineer its supply chain, while
cutting off indirect rivals Hewlett-Packard and IBM from a major distributor.
said it expected the deal would allow it to enhance its direct-sales capability
by giving it end-to-end order management and complex configuration capabilities.
Compaq officials said that Compaq currently accounts for 40 percent of Inacom's
product business. Inacom, meanwhile, positioned the deal as freeing its focus
on IT services, a direction in which the company has been moving for months.
terms of the deal, Inacom and Compaq entered into a three-year services, supply
and sales agreement, giving Inacom access to the product customization and logistics
capabilities it is selling to Compaq, an arrangement Inacom is expecting to
"provide substantial incremental services revenues."
terms of the deal, Compaq will use the acquired Inacom assets to create a separately
managed wholly owned subsidiary, reporting to Mike Winkler, senior VP and group
general manager of Compaq's Commercial Personal Computing Group.
is still trying to find its way to the Holy Grail of being "just like Dell",
i.e. streamlining the product delivery process to reduce costs, improve profits
and improve predictability. However, this move is aimed more at the custom-configuration
business than at the off-the-shelf market. Inacom should be viewed more as a
VAR (Value-Added Reseller) coming under Compaq's aegis than as a means to increase
the positive side, this may finally be an indication that Compaq has a strategy
for revamping its operations. After more than six months of fits, starts and
on-again-off-again initiatives, Compaq needs to get something going, and this
may be the first step.
move will not appreciably impact overall market growth, it will only shift customers
back to Compaq. This is not a "slam dunk" for Compaq, but it is a step.
and IBM must also now find someone to absorb the volume that would normally
be passed through Inacom. They will have some difficulty, but it is certainly
not an insurmountable problem.
Even though we are optimistic that Compaq is finally getting back on track,
users should still exercise some caution. Buying Inacom's unit does not mean
there will be successful integration of that unit into the Compaq structure
(witness the problems integrating Digital Equipment Corp. after that acquisition).
expect it will take, optimistically, a minimum of three to six months for the
unit to be functioning at optimum performance. Users who are committed to Compaq
should make sure they gain sufficient assurances that integration will not affect
delivery or quality of equipment.