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Technology Stocks : Dell Technologies Inc.

DELL 131.76

-1.1%

10:41 AM EST

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To: Chuzzlewit who wrote (65801)	9/16/1998 6:01:00 PM
From: rudedog	Read Replies (3) of 176387

Chuz - The category of interest for Dell growth is 'multi-vendor storage', the category of large enterprise storage where the storage components have a life of their own independent of the servers which use them. This is a relatively new and growing category which used to be dominated by IBM, EMC and DEC, with DG Clarrion as an interesting 4th (mostly through their OEM program to HP). The whole market is approaching $30B. Currently IBM and CPQ/DEC are tied for #1 in this space, with EMC a close #2. IBM and CPQ do a little more than $7B, EMC just under $6B. DG Clariion is under $1B, I don't know the exact number. DG Clariion does most of their sales through HP but recently announced a similar program with Dell. DG has excellent quality and technology. This market is growing at better than 30% per year and may really take off (>50% /yr) as fibre channel storage builds momentum, as the fibre based systems can more easily attach in an independent storage area network which has many benefits for large IT shops. Getting to both a technology agreement with DG Clariion and development of in-house capability to do the base storage components (which is where most of the profit is anyway) was a really solid move for Dell IMO. I think that was another of Mike Lambert's initiatives, he was a strong proponent of this when he was at CPQ in 1995-96. CPQ saw storage business rapidly grow to rival the base server business in revenue, and it is also a high margin line. If this happens at Dell, the storage business alone could add something close to $1B to the top line in '99.

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