Dell Technologies Inc. Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Dell Technologies Inc.

DELL 133.92

-4.9%

Nov 13 3:59 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: OLDTRADER who wrote (118415)	4/18/1999 4:39:00 PM
From: rudedog	Read Replies (3) of 176387

If you have followed my posting on this and the CPQ board, you would know that Rosen determined in 1994 that the PC business was going to be an increasingly low margin business which would not fuel the needed growth for CPQ. This is what drove the current strategy to shift to a broader and more services led development. John Rose, who at that time had just made CPQ #1 in PCs, felt the same way, and also had doubts that CPQ could transform their model in the PC space. The plan was to Be the #1 or #2 PC player, and at the same time to make PCs less than 50% of revenue. That's why Rose left the PC group and created the Enterprise group in 1996. Even at that time PCs were less than 30% of profits. They correctly predicted as early as 1995 that DELL would surpass IBM and HP and challenge CPQ in the desktop space by 1998. CPQ has been engaged in a defensive game in the desktop space - their real focus is enterprise business. It looks to me like things have played out almost exactly as they predicted. It is IBM and HP who have had their desktop business destroyed, and both CPQ and DELL have contributed to that decline. DELL has certainly not destroyed CPQ's desktop business - have you been looking at the numbers? CPQ has also defended the server space quite well against DELL and managed to preserve margins at the same time - this is one of the reasons that DELL's enterprise business has not been growing as rapidly as Lambert would like. DELL will make inroads there but they are still a relatively small player in that space. What we are seeing is that CPQ and DELL are increasingly moving in different directions. Where EP failed was not in the execution of the defensive strategy against DELL, but in execution on integrating the acquisitions and getting the cost structure in line quickly enough. Mason was also accountable in that regard. You are a pretty smart guy, you should know this stuff....

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next