re: When you consider that last week DELL built what they sell this week, while CPQ built that same unit weeks ago at much higher component prices. BTW, what exactly are the current TURNS comparisons
When DELL finally stumbles, It will be interesting to see how y'all react to dell's inventory. I think GTW did not have any inventory until some thing went wrong, then they had a $450 million inventory problem.
Please tell me how much DELL and GTW really are.
Your last comment on how DELL could really hurt CPQ by selling through the channel, Dell tried that and the stock corrected 70%. You point out that the Channel has a greater range of products, If DELL does anything to change their model, the stock goes down. If they don't do something to increase the range of their product line, IBM, HWP and CPQ/DEC may become the enterprise alternative.
Everyone talks about how Merced is the key to the future. Merced combined with PC100, is a very powerful product. Customers will look to vendors that can provide a wide range of services along with the hardware. This one of many reasons CPQ is buying DEC. To sell enterprise Merced based systems; CPQ needs a large experienced service and support division. They just got 20,000 folks from DEC. IBM and HWP already have the service business.
How is DELL going to compete against this? By this time, the actual PC and hardware will be very low margin with the money in service and support. DELL has no high level service or support that can compete with the Big three.
CPQ knows it can not beat Dell at its own game. Solution, change the rules and the game. We are seeing the first steps now. Step 1, Buying DEC, Step 2, Once you can't make EPS numbers any more, Take market share with Price until the merger is complete. When that is done, Re evaluate the new business landscape and go for the Big enterprise accounts. After all, there won't be any money anywhere else.
Jim |
