Dell Technologies Inc. Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Dell Technologies Inc.

DELL 115.95

+0.5%

3:59 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: arthur pritchard who wrote (142388)	9/20/1999 2:10:00 PM
From: rudedog	Read Replies (1) of 176388

arthur - I think Gerstner's thinking is correct, and the naysayers are just in denial about the way the industry has moved in the last 10 years. IBM is a technology powerhouse and that technology will yield a lot more value to IBM if it is broadly deployed. The notion that one can develop a proprietary hardware advantage which will justify the R&D cost without broad industry deployment has been disproved again and again. The Forbes article is full of rather silly statements about the risk of selling to rivals. For example - . In September 1997 IBM hailed a breakthrough in using copper instead of aluminum to carry current on a chip. The new design let chips run 30% faster yet use less power. Apple Computer was first to deploy the breakthrough, in a new desktop unveiled last January--four months ahead of IBM. Does the author think that IBM sells MACs? In what way does Apple compete with IBM in the hardware space? If the IBM product divisions, with better and earlier access to IBM technology, can not make competitive products in a timely way, then a few months of technical advantage will not save them. On the other hand, getting IBM technology in the hands of producers who CAN get it to market will be good for IBM. Intel has managed a quite successful business with no end user products at all. There is copious precedent for companies to make technology widely available in order to have that technology become "standard". Once standardized, the technology becomes a core part of the industry, like say Windows or the X86 architecture. IBM is not giving away the technology - they are giving access to it. I don't think this is any kind of "end game" strategy - just the opposite. This is a way for IBM to shift away from areas where it is increasingly uncompetitive and into areas where its capability is unmatched, which ought to ensure continued growth and good margins. The operating principle here is that 5% of everything is better than 100% of nothing. Gerstner's "barbell" does not mean that IBM has to exit any of its current product markets - but it does mean that they could do so if those businesses are not good for them.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next