Compaq and Digital will launch a federal subsidiary

Compaq Computer Corp. and its new acquisition, Digital Equipment Corp., will unveil a
federal subsidiary by Oct. 1, company officials said.

During the next six months, Digital will begin replacing its PCs and servers on federal
contracts with Compaq products, following the normal product modification process, said
Jim White, vice president and general manager of Digital’s federal operations.

As a result of the acquisition, White said, Compaq’s federal division will
continue to supply PCs, servers and peripherals to agencies through resellers.

Compaq’s federal division will begin integrating Microsoft Corp. software and
supplying 64-bit Digital Unix and OpenVMS products, White said.

“Those who have a strong preference for Digital products will be fulfilled,”
said Don Weatherson, vice president of Compaq’s government, education and medical

Federal customers will have the option of buying direct from Compaq’s federal
division or through resellers, he said.

Compaq and Digital must form the federal subsidiary because intelligence agencies buy
many Digital products, and Compaq chief executive officer Eckhard Pfeiffer is a German

U.S. law does not allow foreign nationals to oversee companies that do business with
classified agencies, Weatherson said.

At the Veterans Affairs Department, a spokesman said VA expects the transition of
Digital’s Procurement of Computer Hardware and Software contract to go smoothly under

Compaq’s federal subsidiary will supply other vendors’ products on certain
contracts, as Digital does on its Acquisition of Desktop Extended Processing Technology
contract with the Postal Service, White said.

On ADEPT, Digital has supplied notebook PCs from Packard Bell NEC Inc. of Westlake
Village, Calif., and Dell Computer Corp. in addition to its own PCs and servers.

The customer can choose either brand, White said.  

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