Subject: Compaq's Purchase of Digital: Let the dust settle
Date: Mon, 26 Jan 98 12:38:26 -0500
From: "Jon 'maddog' Hall, USG Senior Leader" <>

Remember all the mail messages on this list when the rumors of Intel's
"purchase of the Alpha" came out?

Before we spend hours and days debating this on this list, let's take
a breather to see what rolls out.  In the meantime, since I just came back
from a meeting on this, let me give some insight:

First of all, in a merger like this, nothing happens real suddenly.  People
at the top make the decision to have the merger, then the reality of things
trickle down.  Even if this meger goes through smoothly (i.e. FTC does not
make any waves), it will take a quarter or two for PLANS to be created,
much less action to be taken.

Secondly, Digital has agreements with Intel, Samsung and Mitsubishi regarding
the Alpha which we (and Compaq) have to honor.

Third, one of the "selling points" of Digital is the Alpha, and our ability to
make world-class servers out of it.

What I see in this deal (and this is definitely "maddog" speaking, not Bob
Palmer) is:

	o Digital gets both more and better channel support than before
	o Compaq gets a world-wide support group and larger direct sales force
	o The merged companies become #2 in the industry, with $37.9 Billion
	  in revenue last year
	o Compaq gets access to several world-class operating systems
	o Digital products get name recognition through Compaq (yes, I dare
	  say that to the general public, Compaq has better name recognition
	  than Digital)
	o I would dare say that Compaq advertises far more than Digital
	o Digital's PC technologies will blend with Compaq's, and Compaq
	  will then market them
	o As before, when we sold the FAB plant to Intel, we predicted lower
	  prices of Alphas due to increased utilization of the plant.  Compaq's
	  quantity purchasing power of components and volume line-production
	  should help our production of boards and systems drop.

As to the specific questions about the Alpha boards, Alpha Linux and Digital's
support of Linux, I see no reason for that changing.  The investment we make
is a good business proposition.  There is no reason for Compaq to change that.

On the other hand, it now gives Linux a chance to approach Compaq "from inside"
to convince them to give better support of Linux on Compaq Intel systems, as
well as Alpha.

Jon "maddog" Hall                     Internet:
Senior Leader, UNIX Software Group    Executive Director, Linux International

Digital Equipment Corporation         Linux International
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