Compaq was founded in 1982 by three former Texas Instruments managers who reportedly sketched the idea on a placemat. Its first product, an IBM-compatible portable, produced more first-year revenue than any startup in US history to that point. The company reached the Fortune 500 faster than any prior firm, hit $1 billion in annual sales by 1987, and by 1995 had passed IBM to become the world’s largest PC maker with over $14 billion in revenue.
The end came from two directions. Dell’s build-to-order direct model stripped away the margin advantage of Compaq’s reseller channel. Then two large acquisitions — Tandem in 1997 and Digital Equipment Corporation in 1998 — created integration problems that consumed management and slowed the response to Dell. Revenue fell, losses grew, and CEO Eckhard Pfeiffer was ousted in 1999. Hewlett-Packard acquired Compaq on 3 May 2002 in a contested $25 billion deal, and Compaq ceased to exist as an independent company that day.
Worth remembering
- Compaq's first portable IBM-compatible PC sold tens of thousands of units and generated over $100 million in revenue in 1983, among the most successful first years of any US company at the time.
- In 1986 Compaq beat IBM to market with the first PC built on Intel's 80386 chip, taking the industry's pace-setting role away from IBM.
Sources
- Compaq was acquired by Hewlett-Packard on 3 May 2002 in an approximately $25 billion all-stock deal, ending 20 years of independence. Wikipedia
- Compaq reached the Fortune 500 faster than any prior company and was the world's top PC seller by 1995. Encyclopaedia Britannica
- Dell's direct-sales model exposed a cost structure Compaq could not fix, while its acquisitions of DEC and Tandem created integration problems that slowed its response. Wikipedia
A graveyard tradition: leave a stone to show you came, and remembered.