NW,
Dell usually has multiple sources for components and services. If all of their service alternatives got bought at once, I'm sure Dell wouldn't do anything stupid. IMHO, Dell is investing where they can get the maximum return for the dollar. They make their investment decisions based on proprietary market data we don't have access to as well as public market data. Dell has stated that building or buying a service organization isn't in their immediate plans. Dell has thrived by maintaining multiple sources and shifting their purchases when it is to their advantage to do so for cost, quality, or performance reasons. Dell excels at managing these supplier relationships. Their successful manufacturing, distribution, and support systems are studied by a broad range other companies, including Compaq. Although I try to be sensitive potential problems of companies in which I invest, I have always been interested in why companies succeed, rather than how they can fail, because I can learn from their processes how to improve my own.
I own both DELL and CPQ in nearly equal numbers of shares. They are both good companies. They have both screwed up in the past--and probably will in the future. I expect both Dell and Compaq will succeed--by taking market share from everyone else.
Jack |
