Compaq Message Board - Msg: 8437872

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Technology Stocks : Compaq

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To: Windseye who wrote (54317)	3/21/1999 12:20:00 PM
From: rudedog	Read Replies (1) of 97611

Doug - I have heard rumors of a variety of activities between DELL and IBM. One pretty reliable source at DELL told me that the intent was to form a kind of "virtual corporation" which would effectively create the arrangement described in K's post but without an actual merger - DELL would become an OEM supplier to IBM and would also provide distribution infrastructure for IBM products for a significant cut of the action, and IBM would give DELL a very tight supply chain linkage for PC product components, further reducing DELL's costs. This gets around the branding issues of having essentially identical IBM and DELL products. Many purchasers of IBM PCs are big blue customers who want the whole magilla from IBM and don't care much what is behind the nameplate. IBM also has a much stronger technical base in their server line than DELL does so DELL's server products would benefit. If we combine IBM and DELL pc share, this "virtual company" would be right at CPQ's doorstep in the PC space. According to this source the deal is hung up on long term checks and balances to keep the deal solid over time.

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