Scott -
I agree that DELL continues to show almost no weakness as a company and that they have a good strategy, but they are entering a difficult transition in '99 - that is one of the reasons I am more cautious in my growth assumptions. Brilliant execution and favorable market conditions could make your projection true, but "easily" is a little more bullish than my current take.
CPQ is in a different position - but unlike DELL, they have already taken the hit for revised expectations, and I believe that they are a lot healthier than the current perception. They are in a much better position than either HP or IBM to consolidate the new paradigm for high end computing. They have 2 key problems to overcome. 1 - complete the shift to their new PC business model, whatever it is, and develop a simple message around that which customers, distributors and investors can understand. 2 - complete the integration and market positioning for their high end products. If they had done those things last year, the stock could hardly have suffered more no matter what the consequences.
I have a lot of faith in both of these companies, especially now that the senior management of CPQ has been replaced. I hope you are right about DELL, but in any event it is a sound investment which needs to be a core holding in any tech portfolio, whether it grows at 30%, 50% or 100%. |
