(FORTUNE Magazine) – MOST WEEKDAY mornings, around 7 a.m., a black Porsche convertible darts from an exclusive high-rise in Houston's ritzy Tanglewood section. Behind the wheel is a handsome, gray-haired 54-year-old German in expensive sunglasses, face impassive, foot on the pedal. Darting deftly in and out of traffic, as if Beltway 8 had suddenly become the autobahn, he heads 25 miles north to a sprawling complex of anonymous eight-story glass-and-steel buildings hidden in scrubby South Texas pine forest. The guy doesn't drive; he flies--sometimes at close to 100 mph.

Inside those buildings toil men and women who aim to dominate the world of computing; the speeder in the Porsche, Compaq Computer CEO Eckhard Pfeiffer, has convinced them they can do it. Under the leadership of this perfectionist, Compaq has proved itself a master of what may be the most critical task of business in the Nineties: doing everything fast. Since 1991, when the board ousted co-founder Rod Canion and put Pfeiffer in the driver's seat, annual revenues have nearly quintupled, from $3.3 billion to $14.8 billion. Pfeiffer sets outsize goals and meets them. In late 1993 he said he wanted Compaq to be the leading PC maker in the world by 1996 (at the time it was third). Compaq got there in 1994.

Now Pfeiffer is giving his charges even more audacious targets. He wants Compaq to own at least twice as much share as its nearest competitor in every market it enters. He wants Compaq to become one of the top three computer companies in the world. Today it's fifth, behind IBM, Fujitsu, Hewlett-Packard, and NEC. Finally, he wants $30 billion in yearly sales by 2000. That may not be as preposterous as it sounds--were Compaq to maintain last year's 36% growth rate, its sales in 2000 would be $68 billion, the equivalent of today's IBM.

LIKE PFEIFFER, Compaq does get the occasional speeding ticket. Wall Street served up a summons in early March, sending the stock skidding 18% after Pfeiffer announced that first-quarter earnings would fall below analysts' estimates. Sales had been unexpectedly sluggish, Pfeiffer said, so he was cutting PC prices by as much as 21% and beefing up promotions in an effort to increase market share. The resulting lower margins will jeopardize profit growth well into the second quarter. That's just the latest bad news Compaq has delivered to shareholders. After growing nearly fourfold between Pfeiffer's 1991 ascension and the end of 1994, the stock underperformed the market in 1995.

One reason the stock stalled last year is that analysts feared that the slowing growth of demand would intensify price warfare and further erode the industry's already thin margins. But Compaq has shown that it can make money where others can't. According to John Maxwell, a security analyst at SoundView Financial Group in Stamford, Connecticut, Compaq's operating profits of 9% are significantly higher than those of any other PC company. Gateway 2000, second best, makes only about 7%. Compaq dominates the PC industry's most profitable segment--servers, which connect to other PCs and host software applications--with 36% market share, according to International Data Corp. The No. 2 company, IBM, has only 14% of the server market; its share declined last year, while Compaq's didn't.

That's why Pfeiffer's price cuts may be worse for competitors than for Compaq shareholders: The company is taking its own bad news and putting the screws to its weaker competitors. Says Maxwell: "Apple, AST, and Packard Bell--all are not profitable. Even IBM doesn't make a profit in PCs. This price cut will just make things worse for all of them." Like several other observers, Maxwell predicts that Compaq and Hewlett-Packard, whose share of the PC market is growing rapidly, will prevail and compete for leadership.

In the long term, Wall Street worrywarts may regret selling when Compaq tumbled. Compaq is becoming far more than "just a PC company." Having mastered the art of making money on a product others can't sell profitably, it is now seeking new ways to differentiate its product line. Compaq is getting into networking on a large scale--it designs its PCs and servers so that they work best with one another, and even sells software to configure and manage computer networks. The goal: Give business customers incentive to set up entire networks based on Compaq components. The differentiation doesn't stop there. Believing that the home will eventually have many different kinds of computers (see box), Compaq is about to start selling children's software and hardware under the new Wonder Tools brand it developed with toymaker Fisher-Price.

The opportunity for Pfeiffer's well-oiled machine is enormous. Compaq is the largest company devoted solely to building computers out of industry-standard PC components: Windows operating systems from Microsoft, running on microprocessors from Intel. The "Wintel" architecture is relentlessly creeping into virtually every form of computer, from palmtops to multiprocessor servers that will soon be powerful enough to compete with mainframes. Pfeiffer has engineered the company so that the further PC technology goes, the further goes Compaq. Says he, with quiet conviction: "We've seen the power of the PC, and we've seen that it's unstoppable."

Compaq may be reaching further than ever before, but the business plan it's following is the one Pfeiffer introduced when he took over in 1991. Back then, Compaq built top-quality, high-priced PCs for corporate customers and enjoyed gross margins of 37%. Pfeiffer decided to give up those margins in order to build volume. Today the gross margin target is only 23%. Says Pfeiffer: "We said very clearly in November of 1991 that we are going for market share. That was a major change. We wanted to open up to the total PC opportunity."

When Compaq employees glance in the rear-view mirror and see Pfeiffer's Porsche barreling down on them as they cruise to work on Beltway 8, they change lanes to let him pass, then slip in line behind. No cop is going to bother them with Eckhard running interference. In effect, all 17,000 Compaq employees are in Pfeiffer's slipstream. Compaq thrives on speed--speedy revenue growth, speedy market share gains, speed in entering new businesses, speed in manufacturing.

Wandering around Compaq, you find that everyone you meet talks about the major changes they're effecting. Change seems normal in the woods north of Houston. Greg Petsch, the slight, soft-spoken chief of corporate operations, explains that he's turning around the ways Compaq handles raw materials, works with suppliers, organizes inventory, and tests its machines. He's also standardizing manufacturing processes at factories in Houston, Singapore, and Scotland. "When I started my career at Compaq, I didn't like change," he says. "Now I like to create change. I'm not satisfied just with continuous improvements. I like paradigm shifts." Adds John Rose, a beefy, intense (like all Compaq executives) Digital Equipment veteran who heads the division that makes desktop PCs for businesses: "Nothing's sacrosanct around here. We don't assume what made us successful in 1995 will work in 1996. The environment is changing, and you'd better be innovative--not just in your products but in every part of your business."

Head count has stayed low as sales have soared. Compaq has by far the highest revenues per employee among computer makers, close to $1 million. Pfeiffer's personal staff includes exactly one secretary.

While it sounds peculiar to say that Pfeiffer is the personification of Compaq, it's true. Pfeiffer is a highly competent, relentless, somewhat bland workaholic. Spend a few days around Compaq's monotonously identical office buildings, and you begin to realize just how archetypal the CEO is. Pfeiffer is typically on the job 65 to 70 hours per week. He drives the company no harder than he drives himself. Says chief strategist Bob Stearns: "I've never met anybody more competitive and tenacious. He does not lose. And he's never satisfied. You cannot satisfy him."

Oddly, Pfeiffer emanates reassuring calm even when moving at a breakneck pace. He is unflappable and supremely confident. Says Andreas Barth, a close friend who has Pfeiffer's old job, running Compaq's $5.3 billion European operations: "His patience and calmness in stressful situations are a tremendous strength, a comforting power for the team." Barth says he's seen Pfeiffer lose his temper only once, long ago.

Pfeiffer never shoots from the hip. His thoroughness when contemplating a business decision can drive subordinates crazy. When he finally does speak, his words are so carefully considered they seem rehearsed. He's a dull interview. But his meticulous nature helps the company avoid false steps. Says Gary Stimac, a legendary PC engineer who was Compaq employee No. 5 and now runs the systems division: "We might do weird things if we were purely a technology-driven company. He brings that sense of sanity back. Are we going to make money in it? How will customers respond?" Pfeiffer's acumen is widely admired. Both Bill Gates and Jack Welch have invited him to speak to their top managers.

The only place Pfeiffer shows abandon is on the dance floor. He loves to dance, especially at company gatherings, but employees can't get used to it. Pfeiffer seems to enjoy confounding expectations. At a company celebration last year in the Summit sports arena, home of the Rockets, Pfeiffer came out in lederhosen and had himself hoisted 70 feet up to the ceiling on a cable. At another company meeting, he arrived in a cowboy hat four feet across.

Pfeiffer lives alone in his luxury high-rise but spends considerable time in Houston society with a female friend. His Houston is a rich brew. Pfeiffer has been known to hang out with the Rockets' Hakeem Olajuwon, and occasionally with George Bush. A Rockets season-ticket holder, Pfeiffer sometimes sits near bearded ZZ Top guitarist Billy Gibbons.

That's a strange place to find a German accountant. Pfeiffer started as a financial controller for Texas Instruments in Munich in the early Sixties, then stumbled into a new career when a colleague asked him to come along on a sales call as a translator. Pfeiffer switched from accounting to sales, and eventually headed European marketing for TI. Rod Canion, also a TI veteran, recruited Pfeiffer to launch Compaq's European operation in 1983. He was stunningly successful. By 1990 Europe accounted for 54% of company revenues. Canion brought Pfeiffer to Houston as chief operating officer in early 1991, and before the year was out had lost his job to the German.

The ouster was engineered by board chairman Ben Rosen, following an elaborate secret research project in which Rosen proved that Compaq was spending much too much money to build quality PCs. When Canion resisted changing the company's strategy, the board dumped him.

By all accounts, Rosen and Pfeiffer make quite the symbiotic pair. If Pfeiffer is the efficient master of detail, Rosen is the seer. Rosen helped fund Borland International, Lotus Development, and Silicon Graphics, among other investments, and before that was among the most respected Wall Street analysts following technology. He works from a lonely office high up in New York's Met Life Building. He visits Houston only monthly but stays on top of what's happening in the industry by talking to friends like Paul Allen and by traveling around the world to give speeches on behalf of Compaq.

That makes him the perfect sounding board for Pfeiffer, who speaks to him by phone several times a week. Pfeiffer needs the feedback now more than ever: He's trying to push Compaq further than any PC company has ever gone. "We want to continue to be the largest PC manufacturer while using that leverage to expand into totally new businesses," Pfeiffer told a meeting of security analysts in late January. "We want to evolve from a computing provider to a computing and communications platform provider, to become a developer and packager of complete hardware, software, and services offerings, a provider of both razors and razor blades to our customer base."

THE KEY to extending PC technology as far as it will go is forming partnerships with other industry leaders. Partnering is in Compaq's genetic code. The company was founded to build IBM-compatible machines (thus the name Compaq, which stands for compatibility and quality) with parts from Microsoft and Intel. Says Mark Specker, a research director at Stamford's Gartner Group: "Compaq didn't get sidetracked on their own operating system or their own chip. Instead they formed partnerships with other key companies. They replaced the vertically integrated model that big computer companies had had before with a partnership-integrated model." In a report for customers, Specker wrote: "Can Compaq rise to lead the enterprise computing industry in the early part of the next century? To lead in the layer-cake industry, a company must define for its customers a clear set of choices from best-of-breed partners...We believe Compaq is well positioned to don the mantle of leadership IBM wore in the 1970s and 1980s."

Says Gary Stimac, whose systems division is responsible for all servers and networking products: "Our view from the first day has been, if we can't do it ourselves, we need to find out who is best in each category and bring them into the solution." Company strategist Bob Stearns points out an added benefit of all these couplings: "Our partnerships are part of our research and development budget." Last year the company spent only 1.8% on R&D.

Polygamy, of course, can be risky. In late 1994 and through much of 1995, Compaq and Intel engaged in a very public squabble. Pfeiffer believed that Intel was promoting its own brand at the expense of its best customers, like Compaq. At the same time, Intel had upped its production of motherboards, the circuitboards that are the guts of PCs. Computer makers without the resources to design their own motherboards could now afford to stay at the cutting edge of the business by buying from Intel. That put pressure on Compaq, which engineers the motherboards that go into its PCs itself.

Like a weary spouse, Pfeiffer now describes the discord with Intel as "unrest." Compaq would have liked to buy Pentium-class microprocessors from companies like Advanced Micro Devices, Cyrix, and NexGen, but none were able to deliver. Meanwhile, Intel found the motherboard business more difficult than expected. Last year Intel took a significant write-off because of motherboard-related inventory problems. Not surprisingly, it seems to have downgraded its ambitions for the operation. The strife between the partners has simmered down as well. Says Pfeiffer, referring to Intel: "We have reached the conclusion we can work with it and deal with it."

Other Compaq partners earn the CEO's praise. Besides Fisher-Price, Intel, and Microsoft, the company has linked with Cisco Systems, Digital Equipment, Novell, and German software manufacturer SAP. Most corporate local area networks (LANs) use Novell's NetWare operating system--and Compaq sells more PC servers for those LANs than anyone else. SAP makes increasingly popular management programs that run entire enterprises--more than 50% of new SAP installations running on Microsoft's Windows NT operating system now use Compaq servers. Says Andreas Barth: "SAP is the killer application for us for the true client-server network."

Compaq's most ambitious effort to insinuate itself throughout the corporate network is its partnership with Cisco. The company dominates the market for routers, special devices that combine hardware and software to move information around networks. Until now, any company wanting to buy Cisco's software had to buy Cisco hardware. Compaq is the first company to get a license to sell Cisco-compatible routers. Says Cisco CEO John Chambers: "Our two companies see the industry growing at the enterprise level, at the medium and small account level, and in the home." He laughs. "Our strategies are similar in that we're both trying to play across the board--in everything."

Overseeing the Cisco partnership is systems boss Stimac, who is as intense and driven as Pfeiffer. For fun, he pilots cigarette boats at high speed. Stimac wants to offer corporate customers a soup-to-nuts network--PCs, servers, routers, even technical support. Last year he cut a deal to use DEC's vast worldwide service operation for Compaq's customers. That put the finishing touch on what some wags call the "LAN-in-a-can." Let them laugh--Stimac's gross margins are almost double the company's average, analysts estimate.

The next step for Compaq is to provide such network services to consumers. Compaq expects to work with others to eventually offer homeowners videoconferencing and Internet access, as well as networking for any machine in the home that has a computer chip--whether it's a so-called Internet "appliance" or a gas meter. Says Laurie Frick, a kinetic recent refugee from Hewlett-Packard who heads the emerging markets group in the consumer products division: "Consumers are looking for products that are ready to go, with services, applications, and hardware ready to use every day. Say we'll have an appliance that connects to a network for 6 cents a day. Compaq gets a piece of that 6 cents." Strategist Stearns hints at an even broader reach: "We have to do something for the consumer until the phone companies can deliver bandwidth access. We're going to do that using satellites."

The big risk in reaching for the stars is that the company will spread itself too thin. Says Bill Gurley, a security analyst at CS First Boston: "Every time companies get into trouble, it's because in an effort to find growth, they move away from their core competencies into markets where they have no competitive advantage." Gurley thinks Pfeiffer should concentrate his investments in his most profitable businesses, systems and servers.

FAR FROM the Houston hubbub, curled up in an armchair in his New York City office, Chairman Rosen is puzzled by such worries. "The biggest risk we face is complacency," he says, "and we're more paranoid now than we were in the Eighties. We've shown that we can differentiate the product sufficiently, and we have a strong enough brand and installed base that the vulnerability is de minimus now. Since our turnaround in 1991, we've had astonishing financial results, in a maelstrom."

The stall and decline in Compaq's share price drives Rosen crazy. "It's interesting how fast we're growing compared with some of the new darlings that have received both press and financial adulation--like Sun Microsystems. Five years ago we were each $3 billion. Today we are 2.5 times Sun's size. In the last quarter, their volume was up 19% year to year, while we were up 45%." Yet according to Paine Webber analyst Michael Kwatinetz, Sun's P/E multiple, based on estimated earnings for the next year, is 17.2. Compaq's, on the other hand, is just 9.2--well below the average for the S&P 500.

Of course, Rosen's sad song--my company's a star, but my stock gets no respect--has been sung so often it's a corporate standard. Andy Grove trots it out every once in a while, and before Java came along to dazzle investors, Sun's Scott McNealy used to wail it as loudly as anyone. Investors want Compaq to astound them--they want to gawk at the company the way slack-jawed employees watch Eckhard Pfeiffer dance the night away at company sales conferences. But those late-night boogies are the exception, not the rule. Rosen--and investors looking for a quick profit--may have to console themselves with this: As long as Pfeiffer is at the wheel, Compaq will continue to execute with relentless efficiency.