Compaq High Performance Computing (A)

By using standard components, Compaq's supercomputer line, known as the Alpha Server SC, attempted to avoid some of the risk associated with supercomputer development. However, more than five years after unveiling its first supercomputer, known as Turbozilla, Compaq's High Performance Technical Computing Group had yet to make a profit, despite rapidly growing demand. The bidding process for large government contracts typically resulted in discounts of up to 70 per cent, leaving little, if any, margin. More importantly, some Compaq managers had become anxious that HPTC systems had begun to consume significant company resources. Alpha servers that had previously been allocated to high margin commercial customers were increasingly being diverted to zero margin supercomputers. Highlighted is the stage by stage process of developing a new product development organization. In doing so, it demonstrates that an important capability and competitive advantage for effective knowledge transfer in global new product development is the ability to construct a network of relationships that are built over time, that lead to the creation of social capital, and that are strong and extensive enough to inhibit duplication by others. Supplement Compaq High Performance Computing (B), product 9B03M042 is available.

• Computer Industry
• Competitive Advantage
• International Management
• New Products
• Northeastern