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Technology Stocks : EMC How high can it go?
EMC 29.050.0%Sep 15 5:00 PM EST
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To: stockman_scott who wrote (11249)9/26/2000 10:27:15 AM
From: Bill Fischofer  Read Replies (1) of 17183
 
Re: Dell

The poster reflects a fundamental misconception about what EMC does and what it offers its customers as well as the dynamics of the market in which it operates. For many years Wall Street would refer to EMC as a "disk drive company" and EMC investors could be certain that as long as that misperception endured EMC would be grossly undervalued.

EMC's is not a hardware business and to focus on the cost of hardware is like trying to analyze DELL's business by examining the price of motherboards. The real cost of storage is in the people who manage it, not the purchase price of hardware. If DELL discovers a way to manufacture IT staff then EMC would rightly be concerned. Barring that, they will discover the same thing that IBM, HWP, Hitachi, and SUNW have discovered: Storage is a lot more complex than the single dimension of pricesheets. This is especially true at the high-end where growth rates and data volumes impose enormous management challenges which completely dominate the purchase and support equation almost to the exclusion of price.

Where DELL and other do have a likely inroad is at the low-end "appliance" end of the market where the administrative needs are small and raw price carries larger weight in the purchase decision. Small wonder that NTAP is "moving up" to larger more sophisticated storage offerings. Attacks come from below.
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