Compaq fuels service provider market –

In a move to capture a bigger share of ecommerce-related growth, Compaq Computer, of Houston, has agreed to commit more than $1.1 billion to service providers in years to come. Such service providers include application service providers (ASPs), Internet service providers (ISPs), and network service providers (NSPs). The $1.1-billion commitment will be spent on financing, equity investments, and comarketing funds. Irv Rothman, CEO of Compaq Financial Services, said that the financing money would be used for everything from the smallest service providers to behemoths that might need as much as $50 million for expansion.

Compaq's launch comes at a time of heavy interest in service providers on the part of big computer houses. Last month, Sun announced its iForce program to continue to foster its image as a network server powerhouse. Dell Computer recently said it will target ISPs as a group. Just today, Hewlett-Packard unveiled the HP Garage Program at the VentureOne Summit conference in San Francisco.

Several of these programs include not just technology but also comarketing and novel financing.

For his part, Compaq's Rothman said that a new program called Storage on Demand would enable service providers to immediately deploy several years' worth of storage capacity, while only paying for annual storage needs. Along the same vein, the company announced the StorageWorks Service Provider 24000, or "Terabytes in a Cabinet." It is designed to provide massive storage in data centers where floor space is at a premium.

The company is hoping this investment will make it the technology supplier of choice for service providers. The company believes the market for those companies will grow to $16 billion in the next three years.

Keith McAuliffe, vice president and general manager of Compaq's Service Provider Business Unit, said the Compaq approach of focusing on the whole business, and its wide range of technical offerings, set it apart from competitors such as Dell Computer.

"The financial model we have in place is unprecedented," McAuliffe said. "When you look at what service providers are trying to do, it is a business offering, and technology is an important element." He also pointed out that Compaq has developed a high-end technical support offering on a global basis to support service providers who might not have enough of the technical competency on board that's required to meet growing demands. He cast Compaq's service offerings favorably versus Dell's.

Another feature said to set Compaq apart is its system management capabilities, which enable service providers to manage their systems at both the device and network level. McAuliffe noted that Compaq's acquisition of Tandem has given it nonstop competence in the high-end server arena, while its acquisition of Digital provided it with network design competencies.

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