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Technology Stocks : Dell Technologies Inc.
DELL 126.59+0.1%3:59 PM EST
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To: Sig who wrote (51427)7/15/1998 1:02:00 PM
From: Chuzzlewit  Read Replies (1) of 176387
 
Sig, I think yours is a profound observation. Whenever there is a totally new way of doing things -- a major technological revolution or scientific discovery -- the financial people have no way of reckoning the potential. The funny thing is, I don't think of Dell as a technological revolution in the usual sense. The revolution really isn't all that revolutionary either! JIT manufacturing has been around (conceptually at least) for decades. It was taught at Harvard just after WWII. And BTO has been around for a long time. It's the execution that's revolutionary.

While a lot of companies have talked a good game, Dell has executed. And the interesting thing here, is that the old bromide "first to market" has been replaced with "first to manufacture and market". It is this combination that creates the chasm -- the barrier to entry. Any other company wanting to emulate Dell must first take a giant step backward (eliminating its channels) before it can move forward. But most companies are myopic -- they are incapable of thinking for the long term. But Dell did just that when it eliminated its retail operations. That puts Dell in a class of its own.

So, to get back to your point, Sig, when faced with a set of circumstances beyond the ken of the ordinary financial observers, the markets consistently underestimate the power of the innovation. That was clearly true of MSFT and CSCO. I think that is also true of ERP companies like PSFT, and I think that is true of DELL.

TTFN,
CTC
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