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Technology Stocks : Intel Corporation (INTC)
INTC 48.26-0.7%Feb 5 3:59 PM EST
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To: John Koligman who wrote (80214)4/28/1999 3:25:00 PM
From: Mary Cluney  Read Replies (4) of 186894
 
John, >>>I found it interesting that Intel wants in on the *server farm* business.... Intel in services??? Why would they do that??? <<<

The terrific thing about the services business is that it cost so little to get into it and is hugely profitable.

The bad thing about the services business is that it cost so little to get into it and is hugely profitable.

Nowadays, almost any two people (with or without a dog) can get into the services business and compete with the major players. In many cases the bigger players do not have any advantage. In fact they are frequently disadvantaged by a high cost structure.

So, if you are working for IBM and nearing retirement, instead of getting kicked out because you are getting "too old:, you take early retirement and you take with you some accounts that you have been working on for the last few years - and go out on your own.

Instead of making $100,000 a year at IBM, you could make $250,000 a year for a couple of years and cushion your retirement.

The "server farm" business is something a little different. You need $50 to $100 million dollars to get into the business. I guess that could be a barrier for some - maybe not for Paul - but for others it could be an insurmountable hurdle.

Mary
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