Compaq puts network firms on shopping list

Compaq has admitted that it will have to buy networking firms in order to compete with Cisco and 3Com in the enterprise market.

The hardware manufacturer wants to provide tools to network all the kit inherited from its long list of acquisitions, which includes Digital and Tandem, as it builds on its base of selling desktop network interface cards. It is working with a number of partners, including Cabletron, Intel and Extreme Networks, to design a range of switches and routers.

Ian Whiting, director of Compaq's network access and communications division EMEA, said : 'It's true we focused on desktop networking and not where Cisco or Bay are, which is at odds with Compaq's strategy to be an enterprise class products supplier.'

The Texas company insisted that it would achieve its ambitions despite the fact that it missed out on buying a key Digital division - the enterprise networking business which was sold to Cabletron nearly a year ago.

Compaq is now turning to the owner to develop high-end networking equipment.

The manufacturer also wants to attract independent software vendors to its NT remote access servers and is aiming to have developers writing systems for unified messaging, security and management tasks.

Meanwhile, Compaq saw its third quarter profit down 78 per cent to $115 million from $517 million last time. Turnover was up 36 per cent to $8.8 billion from $6.5 billion. In the nine months, net loss was $3.5 billion, against profit of $1.2 billion for the same period last year.