Editing Compaq (section)

====Management shuffle====
In 1996, despite record sales and profits at Compaq, Pfeiffer initiated a major management shakeup in the senior ranks.<ref>{{cite news |url = https://www.nytimes.com/1996/10/25/business/compaq-shakes-up-its-top-management.html?src=pm |work = The New York Times |first = Laurence |last = Zuckerman |title = Compaq Shakes Up Its Top Management |date = October 25, 1996 |url-access=limited }}</ref> John T. Rose, who previously ran Compaq's desktop PC division, took over the corporate server business from SVP Gary Stimac who had resigned. Rose had joined Compaq in 1993 from Digital Equipment Corporation where he oversaw the personal computer division and worldwide engineering, while Stimac had been with Compaq since 1982 and was one of the longest-serving executives. Senior Vice-president for North America Ross Cooley announced his resignation effective at the end of 1996. CFO Daryl J. White, who joined the company in January, 1983 resigned in May, 1996 after 8 years as CFO. Michael Winkler, who joined Compaq in 1995 to run its portable computer division, was promoted to general manager of the new PC products group.<ref name="nytimes1996">{{cite news |url = https://www.nytimes.com/1996/07/03/business/compaq-regroups-into-3-management-units.html |title = Compaq Regroups Into 3 Management Units – New York Times |work = [[The New York Times]] |date = 1996-07-03 |access-date = 2012-11-16 |url-access=limited }}</ref><ref name="businessweek1996">{{cite magazine |url = http://www.businessweek.com/stories/1996-07-21/compaq-at-the-crossroads |archive-url = https://web.archive.org/web/20141026092331/http://www.businessweek.com/stories/1996-07-21/compaq-at-the-crossroads |url-status = dead |archive-date = October 26, 2014 |title = Compaq At The 'Crossroads' |magazine = Businessweek |date = 1996-07-21 |access-date = 2012-11-16 }}</ref> Earl Mason, hired from Inland Steel effective in May 1996, immediately made an impact as the new CFO. Under Mason's guidance, Compaq utilized its assets more efficiently instead of focusing just on income and profits, which increased Compaq's cash from {{US$|long=no|700 million}} to nearly {{US$|long=no|5 billion}} in one year. Additionally, Compaq's return on invested capital (after-tax operating profit divided by operating assets) doubled to 50 percent from 25 percent in that period.<ref name="ReferenceA"/>

Compaq had been producing the PC chassis at its plant in [[Shenzhen]], [[China]] to cut costs. In 1996, instead of expanding its own plant, Compaq asked a Taiwanese supplier to set up a new factory nearby to produce the mechanicals, with the Taiwanese supplier owning the inventory until it reached Compaq in Houston.<ref name="businessweek1996"/> Pfeiffer also introduced a new distribution strategy, to build PCs made-to-order which would eliminate the stockpile of computers in warehouses and cut the components inventory down to two weeks, with the supply chain from supplier to dealer linked by complex software.<ref name="nytimes1996"/>

Vice-president for Corporate Development Kenneth E. Kurtzman assembled five teams to examine Compaq's businesses and assess each unit's strategy and that of key rivals. Kurtzman's teams recommended to Pfeiffer that each business unit had to be first or second in its market within three years—or else Compaq should exit that line. Also, the company should no longer use profits from high-margin businesses to carry marginally profitable ones, as instead each unit must show a return on investment.<ref name="businessweek1996"/> Pfeiffer's vision was to make Compaq a full-fledged computer company, moving beyond its main business of manufacturing retail PCs and into the more lucrative business services and solutions that IBM did well at, such as computer servers which would also require more "customer handholding" from either the dealers or Compaq staff themselves.<ref name="nytimes1996"/> Unlike IBM and HP, Compaq would not  build up field technicians and programmers in-house as those could be costly assets, instead Compaq would leverage its partnerships (including those with Andersen Consulting and software maker SAP) to install and maintain corporate systems. This allowed Compaq to compete in the "big-iron market" without incurring the costs of running its own services or software businesses.<ref>{{cite news |url = https://www.bloomberg.com/news/articles/1996-07-21/compaq-at-the-crossroads |title = Compaq At The 'Crossroads' |first = Gary |last = Mcwilliams |newspaper = Bloomberg.com |date = 22 July 1996 |access-date = 29 June 2016 | url-access=subscription}}</ref>

[[Image:Compaq and SCO baseball cap.jpg|thumb|right|upright=0.6|Promotional baseball cap showcasing the alliance between Compaq and SCO]]
Most of Compaq's server sales were for systems that would be running Microsoft's [[Windows NT]] operating system, and indeed Compaq was the largest hardware supplier for Windows NT.<ref name="cnet-1997"/>  However, some 20&nbsp;percent of Compaq servers went for systems that would be running the [[Unix operating system]].<ref name="cnet-1997"/> This was exemplified by a strategic alliance formed in 1997 between Compaq and the [[Santa Cruz Operation]] (SCO), which was known for its server Unix operating system products on Intel-architecture-based hardware.<ref name="cnet-1997">{{cite news | url=https://www.cnet.com/tech/tech-industry/compaq-partners-with-sco/ | title=Compaq partners with SCO | author-first= Brooke | author-last=Crothers | publisher=CNet | date=August 19, 1997 }}</ref> Compaq was also the largest hardware supplier for SCO's Unix products,<ref name="cnet-1997"/> and some 10&nbsp;percent of Compaq's [[ProLiant]] servers ran SCO's [[UnixWare]].<ref name="cnet-1998"/>

In January 1998, Compaq was at its height. CEO Pfeiffer boldly predicted that the [[Wintel|Microsoft/Intel "Wintel" duopoly]] would be replaced by "Wintelpaq".