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Technology Stocks : Dell Technologies Inc.
DELL 122.46-8.5%3:59 PM EST
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To: rudedog who wrote (144567)10/14/1999 11:53:00 AM
From: Mike Van Winkle  Read Replies (3) of 176387
 
Rudedog, re: response to Sig
sig -
Dell is oriented to eliminate the service business for their product by producing non-failing items/systems
That just does not work economically. Getting an additional 9 of reliability increases the price by a factor of 5. Neither DELL nor anyone else in the business can produce a product which is significantly more reliable than the accepted standard without pricing themselves out of the market.
But more importantly, this has nothing to do with fixing broken PCs. These services are system design and configuration professional services of the type IBM Global services and CPQ services provide. The steps you point out are a great way to reduce DELL's "back end" support costs but not part of the services discussion.<<<

First, Dr. Deming and other quality control innovators have shown that quality improvement results in lower costs, contrary to previous thoughts of manufacturers. This is very old news but should not be forgotten. Second, for other hardware and some software issues Dell has worked on their internet support strategy. A low cost method for handling the three year warranty was needed before they entered into the low cost consumer market and based on their announced plans, it is in place. Third, Dell has always made clear that they are not entering into the area of service that needs legions of service people. That does not negate growth of Dell's service revenue and earnings. I see no change except that Dell has upped their market share target from 25% to 50%! This optimism, as I see it, is tied to Dell's planned 50% cost reduction from their already stunning low manufacturing cost.
Cheers
Mike
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