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Business Week: HP-Compaq's Great Software Challenge

Sep 07, 2001, 11:34 (8 Talkback[s])
(Other stories by Sam Jaffe)
"Imagine that you run a computer company that oversaw the development of seven different operating systems. It's not pretty. Microsoft (NASDAQ:MSFT) struggled mightily to get the latest version of its OS, Windows XP, out the door. Meanwhile, Apple had to delay the launch of its OS X several times. What if either Apple or Microsoft had to deal with shepherding seven of these puppies, and do so all at once? Microsoft CEO Bill Gates might tear his hair out. Apple CEO Steve Jobs would be a candidate for an ulcer.

So what about Carly Fiorina, CEO of the to-be-merged Compaq and Hewlett-Packard (NYSE:HWP) ? We'll soon find out. When it comes to operating systems, "they've got Himalaya, VMS, Tru64, HPUX, and others," notes Laurie McCabe, an analyst with Summit Strategies. "It makes my head swim trying to keep track of each one." That could create a huge opportunity for Linux, the so-called open-source OS that's becoming an increasingly prominent player in the field. If the new HP adopts Linux as its primary platform outside the Windows arena, it would break down the obstacles that have been standing in the way of Linux' growth and further market penetration. As for HP, by winnowing the OS plethora and unifying software-development efforts around two systems, Windows and Linux, the new company could create desperately needed economies of scale -- and perhaps save hundreds of millions of dollars in wasted development costs. More important, it could ease the integration of the two companies by giving them a common goal. Smart investors will watch what Fiorina does very carefully."

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