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Technology Stocks : Dell Technologies Inc.
DELL 140.77+1.4%Nov 12 3:59 PM EST
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To: Jock Hutchinson who wrote (105340)2/26/1999 1:21:00 PM
From: Chuzzlewit  Read Replies (3) of 176387
 
Good morning Jock,

For a company that is about to do $18 Billion is sales, an R&D budget of $300 million is chump change.

You are absolutely right. But what you are neglecting to factor in your discussion is that Dell is leveraging the R&D expenditures of its suppliers to fill its needs. There was a Harvard Business Review article that came out some time ago on Dell's business model, and this issue was a key point raised by Michael Dell. He pointed out that if there are a number of fast horses already in the race why enter yourself.

Some time ago there was a discussion on the thread about what kind of a company Dell really is. I took the view then that it is a mistake to view Dell as a technology company. What you are looking at is a light manufacturing/assembling company with absolutely superb management. It has discovered how to manufacture a commodity with virtually zero inventory and virtually zero R&D. It has used OPM (other people's money) to a fare thee well. But what you point out is that it is also using OPR (other people's research). This is a strength, not a weakness.

So what you have is a "virtually integrated" company in every sense of the word.

TTFN,
CTC
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