If you were around in the early days of computing, you might remember Compaq.com. Compaq was a computer company that competed with IBM in the older days. Compaq started as a direct rival to IBM, standing at just 1% the size of its contender company when it began. However, some smart manufacturing and business decisions led to an incredible rise to glory for Compaq.
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In 1982, Compaq.com was founded by Rod Canion, Jim Harris, and Bill Murto. Unlike the other computer supergiants at the time, the goal of Compaq was to create smaller, more portable, and more affordable computers. They managed to achieve this goal, and a lot of their explosive growth was due to this.
Another point in Compaq’s favor was how they built the devices themselves. Instead of building solely proprietary products like many of the companies of the time, Compaq decided to make their computers compatible with IBM. Because they combined compatibility with an excellent price, they cornered the market quickly. Their systems match IBM’s in terms of power and quality, too.
Along the way, Compaq became the youngest ever Fortune 500 Company at four years old. By 1987, they’d already made a full one billion dollars in revenue, and by 1991, they tripled that number.
Some might argue that the initial success of Compaq could be partially attributed to their CEO at the time, Rod Canion. However, in the early 1990s, he was removed from his position at CEO due to internal differences. Presently, Eckhard Pfeiffer was brought in as the new CEO. From then on, Compaq went in a much different direction.
Under Pfeiffer’s leadership, Compaq soared in both popularity and revenue, eventually emerging as the top PC manufacturer above both Apple and IBM. However, Pfeiffer’s adventurous ideas didn’t always result in success, and they ultimately lost that new ground they had gained over their competitors.
The Fall of Compaq.com
As you’re already aware, Compaq and its website, Compaq.com, are no longer around today. The sudden and unexpected downfall of Compaq, who once did so well, can be attributed mainly to a lack of real direction. While it held its niche in affordable, functional personal computers under Rod Canion and the beginning of Eckhard Pfeiffer’s reign, Compaq eventually – and to their detriment – attempted to expand into other markets.
To be fair, at the time, it was a somewhat sensible decision. Compaq’s competitors were also working on expanding into other markets, but the way that Compaq did so was inadequate. Instead of fortifying or focusing on their niche, the company seemingly acquired resources that competed with their original direction.
For example, the first company that Compaq acquired in its expansion was Tandem Computers in 1997. This went reasonably well, but their second acquisition, DEC (Digital Equipment Corporation) in 1998, wasn’t so successful. Tandem Computers was acquired for $3 billion, while DEC was acquired for $9.6 billion.
It’s not hard to extrapolate as to why acquiring DEC was not a wise decision. The company’s specialty was the production and design of computer chips, but their chips weren’t compatible with Compaq’s products – they were too small and not powerful enough to boot. Additionally, while Compaq did create and manufacture their own computer chips at the time, they had plans in the works to discontinue this.
To top things off, DEC created products primarily designed to run UNIX, while Compaq was focused on Intel and Windows-based products at the time. While this merger could theoretically have allowed for greater compatibility for their products, it doesn’t seem that they were able to make it work this way.
Unfortunately, the incompatibility of mergers like these created a working environment that was stressful and unpleasant, which only further sped Compaq’s downfall. This low sense of morale led to the ousting of Pfeiffer from the position of CEO, as many believed he was partly or wholly responsible.
Merging HP and Compaq
When it looked like all was lost for Compaq, an interesting new deal started to come into the works: a large-scale merger with the computer giant Hewlett-Packard. While the merger was relatively successful, Compaq definitely received the short end of the deal.
Internal friction during the merger resulted in layoffs and an overall drop in share value that crippled both companies. Eventually, any and all Compaq products were phased out of production. Today, all that’s left of the once-revolutionary computer company is HP, which retains no traces of Compaq’s former branding. In 2013, all Compaq brands were officially discontinued, and the official Compaq.com website was shut down shortly after the merger.
However, the deal wasn’t all bad in the end. While Compaq ended up being fully absorbed into HP, the company did end up thriving and becoming the tech supergiant it is today as a result.
Today, however, Compaq is still around, albeit not in a place where you would find it easily. The Newsan Group, a tech company based in South America, acquired a license to make Compaq notebooks in 2015, and the company survives today as Compaq Brazil, a brand that produces consumer-friendly laptop notebooks.