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In some sense, Compaq has put together a relatively complete internal peripheral offering with the Thomas-Conrad and Microcom purchases. So, if you're heading out to buy a desktop or server system, Compaq thinks that the thought of one-stop shopping will be enough for you to forget about the likes of 3Com Corp. and Intel Corp. for your internal peripherals. In fact, Compaq refers to it as a "hamburger and fries" strategy--every time you buy a desktop, expect that Compaq rep to ask if you'd like a modem and network card with that.

Of course the analogy is so flawed just choosing where to start picking it apart is tough. If you love 3Com NICs, you buy a gross of them, stick them in a corner and haul one out whenever you purchase a new desktop. If you prefer McDonald's fries with your Burger King Whoppers, it's a little harder to stockpile.

Compaq feels that it can gain a pricing advantage because of the number of ASICs and other chips that it buys from the big chip houses. This seems hard to fathom considering that one of the players Compaq will go up against is Intel, which seems to have a fairly good source for chips too (its own fabrication plants).

Even harder to imagine is how Compaq will turn its second purchases of falling stars into product lines that compete with such companies as 3Com and Intel. I mean if the folks at Compaq have been watching how Cisco, 3Com and Intel do it, they haven't learned much. The idea is to let the small start-ups do what they do best: innovate. Then evaluate which company has the best technology and buy it. You'd have quite a tough time making a case to support the view that Thomas-Conrad, NetWorth and Microcom were anything more than quality, second-tier players in their respective markets.

Although I'm sure the good folks at Compaq would rather not hear, read or think about it, their foray into the printer industry seems like a lesson that they've now chosen to repeat. Purchases of things likes printers, modems, NICs and hubs are not commodity purchases. Companies still go through lengthy evaluation processes and look to market leaders with strong commitments to a technology before they buy. It just isn't as simple as deciding on a whim to munch some fries because some pimply faced kid asked if you wanted them.

Compaq says that it looks for markets that it can dominate before deciding to jump into the fray. Just as HP was unlikely to roll over in the printer market, 3Com and Intel, with their huge investments in NICs are certainly unlikely to give even a little room to Compaq. 3Com has cleverly started bundling value-added services on top of its NICs, making 3Com's NICs not only attractive in terms of pri ce and performance, but potentially the source of unique network services. Intel, on the other hand, strives for low price, high quality and high performance. And remember, Intel has the fabrication facilities to make the chips, so it's hard to see where Compaq can get a leg up.

Similar cases can be made when it comes to modems and network hubs. Even if it's wildly successful with this venture, Compaq will still find itself a distant third at best for these peripherals. That's hardly a dominant position and probably not a money-maker either.

Compaq could compete in new businesses, but not by taking a "would you like fries with that" marketing stance. It's clear that Compaq thinks it would be nice to leverage its dominance at the desktop to create new markets, but it had better do it with market-leading products. No one sees these peripheral purchases as no-brainers yet, so one-stop shopping just isn't enough.

Art Wittmann can be reached at awittmann@nwc.com.