Hewlett-Packard and Compaq Customers Weigh in on Proposed Merger

Between Feb. 25 and March 4, 2002 Technology Business Research Inc. conducted a completely independent survey of 243 Compaq and Hewlett-Packard corporate end users to determine their views of the proposed HP-Compaq merger. This survey was not conducted on behalf of any corporation, organization, fund, brokerage firm, director, stockholder or individual.

Hewlett-Packard and Compaq Customers
Weigh in on Proposed Merger

Concerns Appear to be Limited, with Many Adopting
a Wait-and-see" Attitude While Remaining Supportive of Their Vendors

HAMPTON, N.H. (March 6, 2002) - Between Feb. 25 and March 4, 2002 Technology Business Research Inc. conducted a completely independent survey of 243 Compaq and Hewlett-Packard corporate end users to determine their views of the proposed HP-Compaq merger. This survey was not conducted on behalf of any corporation, organization, fund, brokerage firm, director, stockholder or individual.
Although customers favoring the merger ran higher than those against (29.6% in favor versus 24.3% against) the largest percentage, 46.1%, remained undecided as respondents granted the proposed merger the benefit of the doubt".
Other survey results were more pronounced. In contrast to the much-publicized negative views of the merger from some quarters, Compaq and HP customers appear to be far less concerned with the impact of a merger to their IT departments. When asked if the merger would have any impact on their IT organization 59.7% indicated they would experience a zero or a positive impact. Only 9.5% of the respondents felt there would be a negative impact while 30.9% were undecided.
When customers were asked if they believed the post-merger management team could successfully complete the merger, 48.6% answered yes and 33.7% were undecided. 17.7% did not believe the team could succeed.
Customers were also queried to determine if a successful merger would force them to consider switching vendors. While 14.4% indicated they would consider" switching vendors, an overwhelming 66.3% said no and 19.3% were undecided. This switch rate" falls within that rate found in TBRs quarterly customer satisfaction surveys, suggesting the merger is of marginal impact on the decision to switch.
Clearly a substantial segment of the IT community, in general, has adopted a wait-and-see" attitude regarding the proposed merger. Although 24.3% of the respondents were against the proposed merger, a much smaller number (9.5%) currently believe their IT organization would experience a negative impact should the merger occur. Given the mergers much touted uncertainty and FUD spread by competitors, this is a small number. Of even greater significance are the 66.3% of respondents who indicated they would not consider a vendor switch, suggesting the cost of a switch far outweighed the risks associated with the proposed merger.
Still, with so many respondents undecided post-merger execution excellence across the board remains the single most important factor affecting customer retention.
The surveys were conducted with IT managers in more than 243 large U.S. companies identified as Compaq and/or Hewlett-Packard customers. The respondent group represented an installed base of over 1 million desktop systems, 266,800 notebooks and 66,600 servers and an intent to purchase" 271,000 systems during the next six months.
The survey error is plus or minus 5% at the 95% confidence interval. Detailed results will be posted at www.tbri.com after 5:00 p.m. on March 6, 2002. The survey was funded entirely by TBR and has been made available at no cost to any and all interested parties. Survey results are the sole property of TBR and may be reproduced only with prior permission.
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For more information, please visit TBRs Web site at www.tbri.com, or contact:

Brooks Gray, Director, Computer Business Quarterly
Technology Business Research Inc.
Phone: 603-929-1166; Fax: 603-926-9801
e-mail: gray@tbri.com

Jon Lindy, Vice President Sales/Marketing
Technology Business Research Inc.
Phone: 603-929-1166; Fax: 603-926-9801
e-mail: lindy@tbri.com