Eckhard Pfeiffer: In Tandem With Tandem

A year ago, he vowed to double annual revenues by 2000, pushing Compaq Computer to $40 billion in sales. And CEO Eckhard Pfeiffer isn't one to miss a target. On June 23, he gave himself a little boost by agreeing to buy struggling Tandem Computers, the largest maker of "fault-tolerant" computers.

The stock deal, valued at around $3 billion, does two things: It gives Pfeiffer $2 billion a year from sales of Tandem systems, which are used to run bank ATM networks, stock exchanges, and phone switching centers. And it gives Compaq 4,000 sales and service experts used to dealing with big corporate buyers, doubling Compaq's force. "It accelerates our plans dramatically," says Pfeiffer. Compaq is also getting Tandem for a song, paying just 1.5 times sales.

The deal comes after Compaq kicked the tires at $14.5 billion Digital Equipment, among others. Is Tandem the consolation prize? Not according to Pfeiffer: "This is the one we wanted to make," he says. Now he has to make the combo work.

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