Compaq is planning a series of acquisitions in an attempt to improve its enterprise software and services and fill gaps in its portfolio.
Chief executive Michael Capellas, confident after announcing fourth-quarter profit up to $757m compared to $332m in 1999, spoke about the company's plans to address the weaknesses in its product range.
"We need to increase our software content. People will want manageability. We have no plans to make large-scale acquisitions, but there are two or three areas to get into, and now is a good time," he said.
Mitul Mehta, managing director of analyst TekPlus, said acquisitions could be a way for Compaq to enter different markets. "There is a huge amount of money to be made in enterprise management software, and there are only a few companies well positioned," he said. "Compaq's not one of them yet, but it believes there is an opportunity to get into web management."
Capellas ruled out Linux as a major part in the company's high-end strategy. "We are looking at one or two smaller software players, and we could use more capability in customer relationship management," he said.
"We are interested in application integration, particularly cross-platform. We also have gaps in our professional services capability and are looking at smaller service companies," he added.
Sam Palmisano, president of IBM, claimed at LinuxWorld that 2001 will be "the year that Linux grows up in the enterprise".
But Capellas dismissed the operating system as a serious option for most firms. "We don't see Linux cannibalising Windows. It will sit on the periphery," he said.
In an apparent dig at the $1bn that IBM is spending on Linux, Capellas said: "It will take a huge investment to make Linux into an enterprise solution. We don't believe that's the way to go."
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