And this is exactly what the proxy fight is about (among the major
shareholders and the Board of Directors).  Should HP pursue a commodity,
low-margin business?  The stakes are very, very high.

John Lee
Vaske Computer Solutions

At 06:42 AM 11/13/01 -0800, Duane Percox wrote:
>Mike Hornsby writes:
>
>> by
>> Lisa DiCarlo, Forbes
>>
>> http://www.forbes.com/2001/11/08/1108hpcpq.html
>
>
>Old news. Nothing of substance here.
>
>BTW - my personal opinion on this is that the merger
>is good and required. Here is my thinking:
>
>* The mid-range server market is going to be commiditized
>  with the availability of ia-64. Once McKinley ramps in
>  first of 2002 you will have mid-range systems being
>  sold from dell/compaq/hp that compete with what we
>  have been accustomed to only coming from one particular
>  vendor and costing big-bucks.
>
>* With a commodity mid-range server market the name of the
>  game is volume. Compaq and HP have realized they alone
>  won't have the volume to make a go of it. Combined they
>  will have enough unit-volume. Others will be forced out.
>
>* We are nearing the mid-point of a long sustained plan that
>  HP/Intel put in place back in 1994. For HP, it was to unseat
>  Sun and for Intel, it was to get into the datacenter in a
>  big way. Along the way Dell has risen in the Intel server
>  market and is now also a target of HP/Compaq.
>
>If you don't believe me, then I offer the following:
>
>Both from Dell (poweredge) and HP (netserver):
>
>4-way ia-64, 800mhz, 4gb memory, 36gb hot swappable disk,
>mirrored to 36gb disk, split backplane, cd-rom, floppy, etc.
>Linux/64 pre-installed or no-O/S: ~ $50,000
>
>For fun, try asking your HP reseller what a 2-way N4000-440
>MPE system will cost you (~300,000). Sorry, you might like
>MPE as much as I do, but do you believe its worth the price
>difference? Even if you do, would your boss? How about the
>CFO who signs the checks?
>
>Yes folks, we have a major shift in market dynamics for the
>mid-range server market. You might not like it, but its going
>to happen regardless.
>
>Duane Percox
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