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Technology Stocks : Dell Technologies Inc.
DELL 133.20+5.7%Nov 26 3:59 PM EST
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To: jim kelley who wrote (49693)7/5/1998 12:36:00 PM
From: rudedog  Read Replies (2) of 176387
 
Jim -
Rudedog is at it again. This is BS! The higher margins in the enterprise do not go to provide additional services. All the real services they offer are paid for at HIGH Premiums

You are showing ignorance of the dynamics of the high end market. Why is CPQ spending nearly $2B annually on R&D while Dell is about $100M? This is not a slam on Dell - I happen to think their R&D percentage is about right for their business model. But the difference in spending is entirely related to providing additional value at the high end of the food chain, and it is paid for by server margins.

Likewise I don't think Dell is serious about moving much higher in the enterprise than their current targets. MSD is just having a little fun at the expense of the big boys. His goal is not to compete with CPQ in CPQ's high end, it is to take share from the low end of CPQ's server business, where CPQ has already established a value proposition which Dell can fulfill better than CPQ.

Your understanding of the distribution and sales model in the high end is also naive. IBM, HP and now CPQ through the Tandem and DEC direct sales teams establish account presence where they become involved early in the design and development process with customers. How do you think Tandem got 65% of the EFT business? These sales are long term, and the sales staff does not even discuss hardware and software until the design is nearly complete.

Please don't accuse me of BS about a subject where you obviously have no knowledge or background. Stick to the areas where you can contribute.
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