This is old news. Been kicked around here before.
Firstly, I am not a raging bull. I'm not a momentum investor. I'm a high growth at a [relatively] cheap price, then stick with it, investor.
Firstly Gateway is not Dell. Gateway cannot compete with Dell in the
corporate space. Only the consumer space. Whu is this?
Is it because Dell is more efficient? Yes. Is it because Dell has
lower costs? Yes. Is it because Dell as better brand recognition?
Yes. Is it because Dell has better service, espeically for major
corporate accounts? Yes. Is any of this key? NO.
Then what is? Because Dell has been annointed. Dell is the chosen one. Dell is the Direct Channel choice. Dell is OK. Dell is one
of the big boys. Dell is a major player. Dell will be around. You
can count on Dell. The CEO has heard of Dell. ETc
Now I realize that many of you don't realize the significance of the
past paragraph. That is because many of you don't realize the lemming
like behaviour, limited intellectual capacity, and basically, timidity
of most IT or MIS or whatever you want to call these days the Computer
Buying Department/Honcho at major corps. Most of these guys are over
their heads, don't understand the technology that well (ie they are
stuck some 10-20 years ago or whatever), scared, and want to do the safe thing. It has always been this way. (BTW, this is a major ingredient in CSCO's increasing dominance, IMHO.)
So what Dell did a while ago and the Street only started to get a feeling for this year is, they became ONE OF THE BIG BOYS. With IBM
and Compaq. What I mean is that that is how major corps started thinking of them. Smaller ones already had...
Now consider also that Dell has for serveral reasons that I could talk
about ad nausium, also become THE LOW COST PRODUCER in all of computer
dom.
Sounds like a sweet spot to me.....
Fragmented industry. Take losts of market share.....Grow at multiples
of the industry. Meanwhile invade higher margined businesses above
you that are ripe for the Wintel cost machine picking....[workstations, servers]. |
