Compaq

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Compaq Computer Corporation
Compaq logo
Type of Company Subsidiary of HP
Founded February, 1982
Headquarters Houston, Texas, USA
Key people Rod Canion, Founder
Jim Harris, Founder
Bill Murto, Founder
Industry PDA and Computer Hardware
Products Presario desktops and notebooks, iPAQ
Revenue $86.696 billion USD (HP; 2006)
Net income ($2.398 billion ) USD (HP; 2006)
Employees 63,700 (2001)
Website compaq.com

Compaq Computer Corporation is an American personal computer company founded in 1982, and now a brand name of Hewlett-Packard.

The company was formed by Rod Canion, Jim Harris and Bill Murto — former Texas Instruments senior managers. The name "COMPAQ" was derived from "Compatibility and Quality", as at its formation Compaq produced some of the first IBM PC compatible computers.

Once the largest supplier of computing systems in the world it existed as an independent corporation until 2002, when it merged with Hewlett-Packard.

Contents

[edit] History

[edit] 1980s

Compaq was founded in February 1982 by Rod Canion, Jim Harris and Bill Murto, three senior managers from semiconductor manufacturer Texas Instruments. Each invested $1,000 to form the company. Their first venture capital came from Ben Rosen and Sevin-Rosen partners. It is often told that the architecture of the original Compaq PC was first sketched out on a placemat by the founders while dining in the Houston restaurant, House of Pies.

In its early years Compaq was in many respects what IBM's PC Group should have been, and indeed, two of Compaq's key marketing executives, Jim D'Arezzo and Sparky Sparks, had moved from there[1].

[edit] Compaq Portable

In November 1982 Compaq announced their first product, the Compaq Portable, a portable IBM PC compatible personal computer. It was released in March 1983 at $2995, considerably more affordable than competitors at the time. The Compaq Portable was one of the progenitors of today's laptop. It was the second IBM PC compatible, being capable of running all software that would run on an IBM PC. It was a commercial success, selling 53,000 units in its first year. The Compaq Portable was the first in the range of the Compaq Portable series. Compaq was able to market a legal IBM clone because IBM mostly used "off the shelf" parts for their PC. Furthermore, Microsoft had kept the right to license the operating system to other computer manufacturers. The only part which had to be duplicated was the BIOS, which Compaq did legally by using clean room reverse engineering for $1 million. Numerous other companies soon followed their lead.

[edit] Deskpro 286

In 1985, Compaq released the Compaq Deskpro 286, a 16-bit desktop computer using an Intel 80286 microprocessor running at 6 MHz and capable of supporting up to 7 MB of RAM. It cost $2000 for the 40-MB hard disk model. It was considerably faster than an IBM PC and was, like the Compaq Portable, also capable of running IBM software. This was the first of the Compaq Deskpro line of computers.

Compaq Portable 386
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Compaq Portable 386

After making half a billion dollars turnover, in 1986 Compaq released the Compaq Portable II. The Portable II was significantly lighter and smaller than its predecessor, featuring a revised design with an 8 MHz processor and 10 MB hard disk. It was cheaper than the IBM PC/AT at $3199, or $4799 with a hard disk.

[edit] Deskpro 386

When in 1986 Compaq introduced the first PC based on Intel's new 80386 microprocessor, the Compaq Deskpro 386[2], they began a period of increasing performance leadership over IBM, who were not yet using this processor. An IBM machine eventually reached the market seven months later, but by that time Compaq was the 386 supplier of choice and IBM had lost its image of technical leadership.

[edit] Systempro

This technical leadership and the rivalry with IBM was emphasised when the Systempro server was launched in late 1989 - this was a true server product with standard support for a second CPU and RAID, but also the first product to feature the EISA bus which was designed in reaction to IBM's MCA (MicroChannel Architecture).

[edit] 1990s

At the same time as they began to dominate the server market, in the early 1990s Compaq entered the retail computer market with the Presario, and was one of the first manufacturers in the mid-1990s to market a sub-$1000 PC. In order to maintain the prices it wanted, Compaq became the first first-tier computer manufacturer to utilize CPUs from AMD and Cyrix. The price war resulting from Compaq's actions ultimately drove numerous competitors, most notably IBM and Packard Bell, from this market.

In 1997, Compaq bought Tandem Computers, known for their NonStop server line. This acquisition instantly gave Compaq a presence in the higher end business computing market. In 1998, Compaq acquired Digital Equipment Corporation, the leading company in the previous generation of computing during the 1970s and early 1980s. This acquisition made Compaq, at the time, the world's second largest computer maker in the world in terms of revenue. Unfortunately for the company, CEO Eckhard Pfeiffer, who engineered both mergers, had little vision for what the combined companies should do, or indeed how the three dramatically different cultures could work as a single entity, and Compaq struggled as a result. Pfeiffer was forced out as CEO in 1999 in a coup led by board chairman Ben Rosen and was eventually replaced by Michael Capellas, formerly CIO of the company. Capellas was able to restore some of the luster lost in the latter part of the Pfeiffer era, but the company still struggled against lower-cost competitors such as Dell.

[edit] 2000s

A Hewlett-Packard Compaq computer and a Hewlett-Packard Deskjet 5740 printer owned by the Houston Independent School District; HP gained Compaq's contract with Houston ISD and took over Compaq's role in the contract.
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A Hewlett-Packard Compaq computer and a Hewlett-Packard Deskjet 5740 printer owned by the Houston Independent School District; HP gained Compaq's contract with Houston ISD and took over Compaq's role in the contract.

In 2001, Compaq engaged in a merger with Hewlett-Packard. Numerous large HP shareholders, including Walter Hewlett, publicly opposed the deal, which resulted in a nasty proxy battle between those for and against the deal. The merger was approved only after the narrowest of margins, and allegations of vote buying (primarily involving an alleged last-second back-room deal with Bank of America) haunted the new company. Capellas left the company after serving less than a year as President of HP and became CEO of MCI Worldcom before Verizon bought MCI. Carly Fiorina, the CEO of HP, added Capellas's responsibilities to her own. Fiorina helmed Compaq for nearly three years after Capellas left. During that time, HP laid off thousands of former Compaq employees, its stock price generally declined, profits did not perk up, and it continued to lose market share to Dell. Facing dismissal from a hostile Board of Directors, Fiorina opted to leave in February 2005 before the board could fire her. Mark Hurd took her place as CEO of HP. Some Compaq products were re-branded with the HP nameplate, while the Compaq brand remained on other products, notably PC. Hewlett-Packard merged their business computers line with Compaq's Business PC line to create the HP Compaq brand. The Servers and business products became part of the HP Compaq brand. PDAs became part of the HP line of products. Before the merger, its ticker symbol was CPQ, but this was melded with Hewlett-Packard's previous symbol (HWP) to create the current symbol of HPQ.

[edit] PC Products

[edit] Wireless LAN Products

[edit] Culture

Two sports stadiums were named after the company:

[edit] Competitors

HP Compaq competes against other computer manufacturers including Dell, Lenovo, Gateway, Sony and Toshiba among others. Originally the company competed against IBM, making affordable IBM PC compatibles often cheaper and faster than the IBM alternative. Lenovo, which purchased IBM's personal computer business in 2005, is a new competitor, especially in the People's Republic of China where it was founded.

[edit] See also

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    [edit] External links