Rude, re servers:
...But no matter what happens in desktops, the real story is servers. DELL ought to be growing that business at twice the market rate, not a few points ahead of the market, if they are to shift their revenue into servers.
Dell's Enterprise sales this year will amount to over $6.5 billion. SUNW's Enterprise will equal over $14 billion (factoring out their different divisions). If Sunw's $15 billion receives a market cap of $140 billion (discounting other divisions), while growing at a 46% per annum rate, then Dell's $6.5 billion should receive no less than a $65 billion market cap growing at about the same rate. Considering a 45% growth of that division over the next twelve months, Dell's Enterprise sales would equal $11 billion.
So giving it the 10X award given SUNW, Dell's Enterprise Division should have a $110 billion forward looking market cap. Thus, looking forward, the market is not only discounting Dell's Laptop and PC division it is giving it a forward looking value close to $0 (relative to SUNW).
Instead of consistent yadayada on Dell's Enterprise Division performance, why not value it equal to it's brethren given the same growth and earnings rates?
the market continues to award SUNW a proportionate marketshare relative to their growth rate. Yet it discounts the SAME growth rate for Dell using "absolute" numbers, as you so state! Dell's Enterprise division growth of 46% is somehow less honorable than SUNW's Enterprise growth of 46%. Guess who is chasing whom.
Otherwise, looking at Asia's "absolute" numbers in Enterprise/PC/laptop sales, brings them close to 22% of the world total. Yet, Asia contains nearly 65% of the world population. What "absolute" part of nearly 22% is not significant in your view? It is expected that by 2005 Asia will comprise over 50% of the world total computing sales. That 50% could represent over $350 billion in absolute sales by then given current projections and growth rates. What amount of this $350 billion in Asian sales would Dell eventually represent? |
