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Technology Stocks : Dell Technologies Inc.

DELL 121.41

+3.4%

12:12 PM EST

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To: D. Swiss who wrote (118125)	4/16/1999 8:57:00 PM
From: rudedog	Read Replies (2) of 176387

Drew - DELL certainly has EMC in their sights but they need to add a couple of key pieces to pull together a competitive offering. CPQ and IBM are going directly at EMC with a classic competitive play - the same service offerings, the same software integration, the same large storage systems, the same independence from a given server (even their own). EMC has a very high cost structure and is vulnerable to companies which can generate better economy of scale by creating offerings which use mainstream components. DELLs strategy is different, and classic DELL. They are putting together a "virtual EMC" through close partnerships and clever glue at key points. They still lack a credible high end support story for this class of system, and some of the software pieces are not yet competitive. But if DELL pulls this together, they will have a product with the same low R&D, low inventory and low fixed cost model that has worked so well in the PC business. This would put pressure on IBM and CPQ who would have to cut margins to compete, but I believe it would demolish EMC.

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