02/09/98 TABLE:...And Threaten Others

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..And Threaten Others

IBM:

REVENUES
$78.5 billion
REVENUE PER EMPLOYEE
$327,083
IBM must slash costs, particularly in PCs. Its overhead is 27% of revenues compared with 15% at Compaq. A stronger Compaq will push upstream into the core of IBM's corporate business. IBM also will face more competition in its $19 billion services business.

SUN MICROSYSTEMS:

REVENUES
$9.2 billion
REVENUE PER EMPLOYEE
$373,900
Sun's revenue will be less than a quarter the sales of a Compaq/Digital combo. And with Compaq giving Windows NT a huge boost, Sun will have to convince customers its Unix-only machines remain performance leaders. Meanwhile, Sun must boost its service skills.

HEWLETT-PACKARD*:

REVENUES
$42.9 billion
REVENUE PER EMPLOYEE
$346,620
Until now, HP was IBM's only real rival for corporate customers. Now it will face a leaner competitor with most of the same skills. What's more, Compaq may emerge as a more powerful Microsoft ally. Compared with HP, Compaq will have a much larger staff of 1,600 certified NT engineers.

GATEWAY 2000:

REVENUES
$6.3 billion
REVENUE PER EMPLOYEE
$484,615
Gateway is struggling to attract corporate buyers to offset razor-thin margins in the consumer-PC market. But a combined Compaq/Digital will make that a tougher market to penetrate. Gateway lacks corporate relationships, and its 40-person field sales force is a fraction of Compaq/Digital's 1,000-plus field sales team.

EDS:

REVENUES
$15 billion (est.)
REVENUE PER EMPLOYEE
$150,000
The largest independent computer service provider has made its fortune offering high-tech knowhow, primarily to corporations. Compaq will have a broad array of services along with a full suite of products to offer corporate clients. Companies may find it easier to fulfill all their computing needs in one place.

DELL COMPUTER**:

REVENUES
$11 billion
REVENUE PER EMPLOYEE
$738,389
Dell still has a stronghold in the corporate market and lower overhead--11.6% of sales, compared with Compaq's 15%. But corporate customers could be tempted to use a supplier with a broader range of products and consulting services.

All revenues are for 1997 except where noted.
*For year ended Oct. 31
**For year ended Nov. 2

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