Hi
I see a lot of rhetoric about how naive it would be trust Dell, and so on. I am sure there is some truth in it; besides it's not too wise to count the chickens before they hatch; etc.
But, when you look at it from Dell's perspective, the X86 market is no longer a one horse race. There is the technology, the endorsements from other tier-1 vendors, and a potential for a genuine two-horse race to emerge. If you ran Dell, would you rather focus on growing your market share in a shrinking sub-sector, or focus on the whole pie instead? Would you not want to play one supplier against the other? Intel can't possibly have locks on some fantastic pricing model.
Maybe Michael Dell is indeed a snake (I really don't know). But he has definitely proven himself to be a very smart, shrewd, opportunistic businessman for so long. Starting from scratch against IBMs, HPs and DECs wasn't that easy I am sure. But we all know the whole story. They all could have replicated Dell's model, surely after Dell validated with its first billion. Who knows, AMD might learn something from Dell this time, perhaps about pricing.
Dell may now indeed have merely bought an option on AMD and I may be totally off base here. But I'll take my odds. IMHO if it failed to follow on, it will lose its ability to acquire similar options in the future. That would be a strategic failure.
Just my two cents. Of course, all will be revealed in time.
regards
-d |
