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"I don't want to...appear to be trying to tinker with the market." -- Energy Secretary Hazel O'Leary, Apr. 29, before a White House order to tap the Strategic Petroleum Reserve "This is an almost elegant idea." -- O'Leary, Apr. 30, after the order. She says her first statement refers to doing it in future yearsEDITED BY LARRY LIGHTReturn to top


COMPAQ COMPUTER CHIEF Executive Eckhard Pfeiffer is primed for another bout with Sun Microsystems. The two already compete in the Internet-server arena. Now, Houston-based Compaq plans to enter the lucrative market for workstations, which Sun dominates.

Pfeiffer no doubt is eyeing the 45%-plus gross profit margins on the powerful, pricey ($6,000-plus) machines. His are due out this fall. Margins for Compaq's main business, manufacturing PCs, are less than half that. Like PCs, sales of workstations--used for computer-aided design and scientific computing--are growing about 20% annually.

In 1995, Sun made 35% of all units bought, followed by Hewlett-Packard, IBM, and Silicon Graphics. Pfeiffer, who years ago stole the No.1 PC sales ranking from IBM by cutting costs and boosting volume, has a similar strategy now. He plans to leverage technology from Compaq's servers and enlist brand-name components--namely Intel's Pentium Pro microprocessor and Microsoft's Windows NT software--where Sun designs its own.

Pfeiffer's use of off-the-shelf chips and software gives Sun CEO Scott McNealy another chance to scoff at Compaq, which he has long called a mere repackager of technology rather than an innovator.By Gary McWilliams EDITED BY LARRY LIGHTReturn to top


DIGITAL EQUIPMENT PLANS a major expansion of its venture into cyberspace. On May 7, the company will launch an Internet software division aimed at selling to corporate users.

Six months ago, mentioning DEC and the Internet in the same breath would have seemed a stretch. But Digital's superfast Alta Vista Internet search engine, which premiered Dec. 15, put the computer maker on the cybermap--at The Web site draws over 6 million hits daily.

Digital now plans to license the Alta Vista technology to companies seeking to index information for quick user access. Digital says it has no plans to spin off Alta Vista and will keep offering its Web site indefinitely. Other Web-search sites have been the basis for hot startups such as Yahoo!

Digital already sells Internet security software to companies, including a "firewall" to keep out intruders and "tunneling" software to secure the link between a company's internal network and customers. But Net software still is a tiny fraction of DEC's $1 billion software business, and DEC execs say it won't add to the bottom line for at least a year.By Paul C. Judge EDITED BY LARRY LIGHTReturn to top


THE ENERGY DEPT.'S CLAIMS of success in creating energy and conservation technologies are mostly hot air. So say analysts from Congress' General Accounting Office, who picked apart an Energy report crowing about vast economic benefits from 61 of its R&D programs. In a sample of 15 programs, they spotted errors in 11, ranging from misstatements to math flubs.

Example: A new method Energy says can boost natural gas production by a huge $20 million per well during a small well's typical seven-year lifetime. The average small well pumps only about $300,000. The GAO says the agency miscalculated big time: The actual benefit is only 1/80 as much, or $216,000 to $294,000 a well. Besides, the GAO adds, the process was developed and patented in Canada.

The political stakes are high, since Hill Republicans want to zero out the agency's $1 billion R&D budget for energy-saving. The report the nonpartisan GAO skewered was written to blunt GOP criticism. Energy official Joseph Romm admits they made a few errors but deems the overall message correct and says the GAO made mistakes in its assessment, too. He says two government-funded innovations the GAO didn't challenge--energy-saving software for buildings and more efficient refrigerators--have saved the economy $7.9 billion since 1980, exceeding the total energy-saving R&D payout.By John Carey EDITED BY LARRY LIGHTReturn to top

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