jdhmnovel Chapter 163 Compaq Acquires DEC
Chapter 163 Compaq Acquires DEC
8:30 a.m., Microsoft headquarters, Building 34, top floor conference room.
Seven people sat around the oval conference table. Bill Gates was in the head seat, with Ballmer to his left and CFO Greg Maffei to his right. The other four were the heads of the strategy, legal, marketing, and technology departments, respectively.
The curtains were drawn, the projector was on, and the screen displayed the logos of Compaq and DEC, with a question mark in the middle.
"The news is confirmed." Ballmer hung up the phone. "The negotiations between Compaq and DEC have entered a substantial stage. Compaq is offering nine billion dollars for an all-stock acquisition. The DEC board is considering it."
The meeting room was silent for a few seconds.
"Nine billion?" CFO Ma Fei frowned. "DEC's market value is now less than seven billion. Has Compaq gone mad?"
"They just invested 60 million in Xingchen Technology, and now they're going to spend 9 billion to acquire DEC," said John, head of the strategy department. "Where will the money come from?"
"Issuing bonds, issuing new shares, and taking out bank loans," Ballmer said. "Compaq's stock price is currently high, and they want to capitalize on this momentum."
Bill pushed away the coffee cup in front of him.
What benefits would Compaq gain from acquiring DEC?
John pulled up another slide.
"DEC has two major assets: the Alpha chip and the OpenVMS operating system. Compaq wants to use Alpha to compete with Intel and OpenVMS to strengthen its enterprise server market. In addition, DEC's sales channels are very strong in Europe."
"Can the integration be successful?" Bill asked.
"It's difficult." John shook his head. "DEC's corporate culture is completely different from Compaq's. DEC is engineer-driven, while Compaq is sales-driven. DEC has lost two billion dollars in the past five years, and morale is low. If Compaq takes over, the first thing they'll have to do is lay off at least 30% of the workforce, which will cause turmoil."
Lisa, head of the legal department, added, "There's also the antitrust review. Compaq is already number one in the PC market, and if it acquires DEC, it will enter the top three in the server market. The Department of Justice may intervene."
Mark, the head of the technology department, began, "The Alpha chip technology is advanced, but its ecosystem is too weak. Compaq wants to use it to compete with Intel, and it needs to rebuild the entire software ecosystem. This will take at least five years and an investment of five billion dollars. Can Compaq afford to wait that long?"
"We can't afford to wait," Ballmer said. "The PC market is in a price war; Dell is chasing, and HP is grabbing. If Compaq's core business gets distracted, it will lose market share."
Bill leaned forward.
So what's the conclusion?
"The acquisition will cripple Compaq," John said. "Financially, it will saddle us with massive debt. Strategically, it will miss the window of opportunity for transformation. Organizationally, it will cause turmoil within the core team. Brand-wise, it will go from an innovator to a struggling company."
Bill looked at Ballmer.
"Your suggestion?"
"Two steps," Ballmer said. "First, we'll share the news with Dell and HP. They won't stand by and watch Compaq grow stronger. Dell will steal customers, and HP will poach talent. We'll put Compaq in a pincer movement."
"second?"
"They secretly created obstacles to the acquisition," Ballmer said. "They leaked information through the media that DEC had hidden debt and disputes over technology patents. They incited DEC shareholders to demand a higher offer and lobbied the Department of Justice to launch an antitrust investigation."
How many resources are needed?
"A budget of two million dollars, a team of ten, and three months."
Bill nodded.
"Go do it." He turned to Lisa. "On the antitrust front, you'll be in charge of contacting the Department of Justice. You don't need to get involved directly; just have a few senators pass on the message."
"clear."
"Mark," Bill said, looking at the head of the technology department, "compile a report on the technical weaknesses of the Alpha chip and send it anonymously to the media."
"OK."
"John," Bill said, "analyze the integration challenges following Compaq's acquisition, make a white paper, and send it to the strategy departments of Dell and HP. They'll know how to use it."
"Yes."
The meeting then moved into its second part.
"Compaq is a core member of the UHSB alliance," Ballmer said, pulling up a new slide. "This acquisition will distract them and divert their attention and resources. We can use this opportunity to cause trouble for the alliance."
"specific?"
"Sowing discord," Ballmer said. "They're spreading rumors that Compaq, after acquiring DEC, will prioritize supporting DEC's interface standard and reduce its investment in UHSB. Other alliance members will be uneasy."
Who is most likely to jump up in anger?
"AMD," Ballmer said. "If Compaq focuses on Alpha chips, AMD's K6 processor orders will be affected. AMD is currently closely tied to StarCraft, and they will put pressure on us."
"Anything else?"
"Dell and HP," Ballmer said. "They're also in the alliance, but they're competitors with Compaq. This could imply that Compaq wants to outpace them in the server market through DEC."
Bill thought for a moment.
"Don't intervene directly; let them create chaos on their own. We can just watch the show."
"clear."
Before the meeting ended, Bill gave his final remarks.
"StarCraft Technology just raised 260 million. Now that they have money, they'll move faster. UHSB standard, AMD optimization, gaming ecosystem... we need to keep a close eye on these."
Ballmer nodded.
"I've set up three teams specifically to monitor them. They'll report weekly on technological trends, market activities, and talent mobility."
"Okay." Bill stood up. "Meeting adjourned."
After the crowd left, Bill and Ballmer remained in the conference room.
"What are the chances that Compaq has a chance of successfully acquiring DEC?" Bill asked.
"Thirty percent," Ballmer said. "There's a lot of opposition within DEC. Many senior engineers would rather retire than go to Compaq."
"Then we'll help them reduce their success rate to 10%."
"It's already being done."
Ballmer walked to the window and drew back the curtains. Outside lay the lawns and woods of the Microsoft campus.
"Sometimes I think," he said, "that we're too passive. Always reacting instead of taking the initiative."
"Because we're the boss," Bill walked over. "The boss can't just step down easily. We have to wait for the opponent to make a mistake, and then deliver the fatal blow."
"Did Compaq make a mistake this time?"
"Yes," Bill said. "Greed. Wanting too much, forgetting their roots. The PC market was still fiercely contested, so they tried to grab servers. The UHSB alliance wasn't stable yet, so they went after chips. Scattering resources, defeat was inevitable."
"What about Star Technology?"
“They’re different.” Bill looked out the window. “Lingyun is very focused. Operating systems, browsers, hardware standards, the gaming ecosystem… all their actions revolve around one core: breaking our monopoly. This kind of opponent is more dangerous.”
"Should we nip it in the bud?"
"It's too early," Bill said. "Let them have their way. We'll make our move when they've made enough enemies."
Ballmer nodded.
The two left the meeting room.
In the corridor, employees walked briskly, carrying documents and coffee.
Microsoft, like a giant ship, continues its voyage forward.
Watching the small boats struggling nearby is also a kind of fun.
As long as it doesn't crash into you, it's fine.
If it crashes into us... then sink it.