EDITORIAL

Building up to a clash of the titans

Nortel's buy-out of Bay is just the latest in a long line of mergers, partnerships and take-overs that is steadily whittling down the number of major industry players. Consolidation is the name of the game, but it is not confined to the big bully boys.

The smaller companies are but plankton to these computer whales, and are increasingly being snapped up before they get the chance to achieve the critical mass that would allow them to compete in the shark-infested waters.

The world's markets are being divided up into spheres of influence in much the same way as 1920s New York was divided between the rising Mafia gangs.

The Five Families of Computing is still some way off, but the foundations are being laid, with the dominant players selecting their alliances for the forthcoming battle. And there is very much more at stake than a few dollars in protection money from the local grocers.

The battles will not be fought by companies with more influence and money than many of the world's nations. The weapons will not be guns and bombs, but rather hostile take-overs, head-hunting and legal writs.

We will not see Don Billi Five-Servicepatches announcing that he has a stone in his shoe and dispatching minions to make sure Don Scotti Java and Don Larri Thin-client end up sleeping with the fishes or with the head of a dead horse. But the corporate conflicts will be just as messy and, in many cases, just as personal. Whoever emerges as the capo di capi will have more power than the world has ever seen.

Compaq wants to rule networks too

Compaq is determined to make it in the networking business. It may be established as the king of desktops and departmental servers, and its acquisitions of Digital and Tandem have positioned it to dominate the mid-range sector and beyond. But in networking circles, it is Nobby Nobody.

However, things change.

The company is one of the sharpest out there; the opportunities it is taking following its take-over of Digital prove this. Bob Palmer, Digital's former boss, spent a lot of time messing about restructuring the business, and one area he concentrated on was its reselling and services side. Compaq has taken this jewel, tried to keep existing customers sweet, and now plans not to sell any of them rival kit.

Compaq gets to dominate the NT space, and as a bonus it gets to nobble 3Com and Bay in the networking arena.