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Technology Stocks : Dell Technologies Inc.
DELL 138.98+4.0%Dec 4 3:59 PM EST
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To: Meathead who wrote (164108)2/15/2001 11:29:08 PM
From: rudedog  Read Replies (1) of 176387
 
meat - I'm not suggesting that DELL is not a well run company. They are increasingly demonstrating that they can be the last man standing in the PC business.

But what about the move into storage? The current spin just repositions attached storage as a business. The overall numbers don't lie - servers and storage as a percent of overall revenue have not grown more than a percent or so in the last 8 quarters.

Where's the upscale move? They continue to drive a model which fits their admittedly successful PC sales and distribution model, but their pricing strategy just makes those boxes higher price PC sales. Their penetration of even the 4-way market, which is becoming a commodity business, is not strong, and they have little 8-way penetration.

The recent suggestions that DELL is going to drop investments that don't fit the model - combined with actions that tell the same story - tell me that they intend to drive whatever business they can with their highly leveraged fast follower strategy. Sure they can continue to show the best numbers in the PC business. But is that interesting?

Once they strip mine the commodity server space, they will have the same problem they have in the PC space. When you're the only game in town, it's hard to be a fast follower.

I think DELL had a chance to make some bold moves and transition into a new phase, and I am disappointed that they lack the vision or will to take that step. Now they have squandered much of the free ride that their superior model gave them, and they will have a much harder time affording the changes they should have made.
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