Compaq aims to keep edge in price discord

Pfeiffer commits to a price-competitive edge over Compaq's rivals as consolidation increasingly becomes the industry norm.

Compaq chief executive officer Eckhard Pfeiffer has hit out at Dells consolidation increasingly becomes the industry norm. and described it as a second-tier vendor, saying that cheap machines will not deliver the total cost of ownership.

Pfeiffer flew into London to attend the Computa-center-hosted event, Platforms of the Future 97, giving a 25-minute presentation, and then flew back to Texas.

He said: 'There is a lot of consolidation in the industry. In the past two years, the top four vendors have moved from 24 per cent of the market to 35 per cent.' He claimed that Compaq re-engineered itself in July.

'Compaq is racing ahead in the consolidation process. We have prices that are between five and 10 per cent lower than Dell's.'

He added: 'This is not a one-time event, we are committed to being price competitive. Most customers can't deal with the direct model and need value-added dealers, even if it adds between $110 and $150 on a box.'

Referring to Dell, Pfeiffer insisted: 'We have 65 per cent greater residual values than two-tier vendors and have achieved leadership in the total cost of ownership argument. Our products have real service and support, which is impressive compared to direct competitors.'

He illustrated his point by saying that Anderson Consulting, which uses purely Compaq machines, had shown a 45 per cent improvement in cost of ownership.

Mike Davies, general manager of IT technical services at Computacenter, said the reseller's role is to sell its customers the systems they want.

That means the arguments about the total cost of ownership differ, depending on the corporation it questions.

Dell was unavailable to comment.

Three weeks ago, Mike Norris, chief executive officer of Computacenter, said he preferred IBM as a channel partner to Compaq.