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Technology Stocks : Dell Technologies Inc.

DELL 127.91

+4.4%

1:06 PM EST

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To: rudedog who wrote (144754)	10/18/1999 10:37:00 AM
From: Bruce Brown	Read Replies (1) of 176387

I thought hdl's post was just a comprehensive list of every argument made in the last year about why DELL's hypergrowth is in the past - rather than an attempt to present a case. I think HDL could benefit from a nice read like Inside the Tornado to see that just because the PC has been on Main Street for many years doesn't mean that the idea of whole product +1 marketing that Dell has targeted so well in the corporate market is such a bad thing. In fact, reading the book confirms that Dell and team have indeed taken the appropriate execution steps to put them where they are today. A little help from Compaq's woes (as well as choices) only helped and the annuity effect that Dell has created in their core market is set. Really set. We could certainly hash the arguments back and forth for many years to come. We know the PC is a commodity business. Nobody has every argued that. It was such before Dell made its big move from 1995 to 1999. Dell's business model was designed to manage this better than any other as ASP's dropped. However, Dell made many excellent niche whole product +1 moves to develop a customer base who would be willing to pay a little higher ASP (especially pragmatists and conservatives) than other companies could provide. I would rather see 'attack' arguments based on things like how long is the PC Technology Adoption Life Cycle going to last? What is the killer app that is going to cause paradigm shock? Where are we in the evolution of the whole product and what does the IBM out sourcing service contract represent within that evolution? In the meantime, Dell has executed most of the proper steps (even overcame some mistakes) throughout the cycle to create the annuity effect in terms of customers for life. They nailed the pragmatists and really nailed the late majority of conservatives thanks to all the industry buzz. Those are the customers you want. Lifers - most of them. There are plenty of laggards and skeptics in the world that haven't even entered the PC cycle yet. However, they aren't future customers - just critics. So, if you are going to be a bear - fight with some ammunition that is well founded. If all these corporate customers are going to stop spending for technology (current being PC technology) - tell us why. Prove their needs to not increase productivity through the use of technology. Prove why Dell's business model will not be successful at surviving the declining ASP's. Interesting that HP is still around when laser printers went from $10K to $5K to $3K to $1K then ink-jets from $1K to $500 to under $200. What is the industry buzz towards HP and printers in 1999? What is the size of HP's business in terms of revenues in 1999? BB

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