The issue is the belief that the ability to produce cheaper and cheaper machines will supplant growth in high end segments. That belief is fundamentally and factually flawed.
The reason why there was no market for Wintel workstations 18mos
ago was because none of the UNIX power apps were ready for NT at
that time.... not because the Intel architecture lacked power.
We designed a dual Pentium Pro machine 2 1/2 years ago that could
smoke a SPARC 10 in benchmarks at a fraction of the cost. So at the low to midrange, the hardware/OS was ready to compete.
You can scream about slowing PC growth all you want. An industry still growing at double digit rates and a company stealing market share is a recipie for success... precisely Dell's positioning.
Dell will grow to 16-17B in revenues this year.. 30-40% growth..
I can live with that kind of slowdown. I can see Dell with 50-60B in revenues within 5 years.
Now I have two machines that are faster than the notebook, but in the real world, there ain't any difference
Again, you compare machines based solely on speed... this is why you continually miss the point of what a high end machine is. I don't think you have a clue as to what the real world of business computing needs and compatibility issues really are. That's becuase you understand it from the consumer side... 10% of Dell's business.. therefore you understand about 10% of Dell.
As for support, Dell is growing in this area nicely and as needed. You don't want to ramp up too fast in anything or you have excesses.
You can have excess service capacity. Dell does not want to be all
things to all people... but at their level, they have the right amount of service offerings and as they grow, their service menu will
also. You see, balancing offerings with service is key... another thing Dell does extremely well.
Another thing Dell knows and exploits is the fact that all large companies have their own full time on-site IT staff and don't need
a tremendous amount of support. Can you imagine companies like Ford
and Boeing relying solely on resellers to setup and maintain their
huge networks? The smaller accounts with more limited resources need this kind of service. Dell is far from saturating the big accounts.
DELL is running out of mature segments to avoid with out getting into another business.
Wrong. Dell could focus almost solely on WinTel servers and Workstations (which are right now in their infancy), become the dominant leader and become hugely profitable. The growth rate here
will be phenominal, especially servers, with the internet explosion.
The only mature segment is cheap PC's as it uses mature technology.
Leading edge desktops aren't mature. Do you really think 100Mhz BX system demand will be limited? Within 6 mos, 90% of all systems sold
by Dell will be BX based. For CPQ, it will be about 50%. They'll
still have a lot of older FX and LX based systems to flush. Last year you would have said the same thing about the 66Mhz LX/FX...
limited market. It quickly became 95% of all systems.
Now it's mature, you'll see it showing up in low end consumer boxes,
but before you can blink, Dell won't sell it because it's not very profitable anymore.
Dell plays in the parabolic profitability growth curve. When technology matures, they bail. They rely on moore's law better than anybody and their business model exploits it to it's fullest. That's another thing I love about this company.
MEATHEAD |
