Hewlett-Packard's $25 billion Compaq deal could effect on education. (News connection: up-to-date and usable education information froms schools, government, business, research and professional organizations).

The planned $25 billion acquisition of Compaq by rival computer giant Hewlett-Packard may be big news to consumers, corporations and shareholders. On the education front, it will likely not mean much immediate change, though H-P may decide to go more aggressively after the education market in the future.

Where it could pay off is in marketing and overall sales to the education community if Hewlett-Packard decides to spend more money to make Compaq the leading player in hardware sales to schools. Currently, Compaq trails Apple and Dell in school sales, according to industry tracking firms. H-P, itself does not hold much market share in education, except in printers, but some say that H-P may want to increase its presence in education.

"Aligning with Compaq will likely help Hewlett-Packard in some ways in the education arena," says Trace Urden, education industry analyst at the investment bank W.R. Hambrecht. "Compaq has a much larger share of the education market than H-P, though it was becoming more of a focus at H-P."

While there will be "specifics regarding company strategy" in the coming weeks and months, it was still too early to say how the merger would effect the two companies education sales, Steve Sievert, spokesman for Compaq, told DISTRICT ADMINISTRATION. "At this time, there's not much to discuss."

Overall, a merged Compaq and Hewlett-Packard would be second only to IBM in revenues in the computer industry.

More so than other businesses in the current economy, technology companies--especially PC manufacturers, Internet companies and software publishers--are particularly vulnerable to mergers and/or acquisitions because bigger companies often have a better chance at survival.

But the education market, with its steep discounts and long purchasing periods, can be tricky. Even though most companies want a piece of it, it can take a while before a company will see any significant headway. For example, Apple's strategy for years was to pump computers into schools in order to build future customers. Though Apple is a dominant brand in education, it's consumer sales have never risen above more than 20 percent of the market.

"This is more of a financially driven deal," says one industry analyst of why H-P is seeking to buy Compaq. "I don't see it having much direct effect on education."