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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: kemble s. matter who wrote (132706)	6/15/1999 5:59:00 AM
From: stockman_scott	Read Replies (2) \| Respond to of 176387

Kemble: DELL continues to take market share from the BIG customers...FYI... <<No Death Knell For Dell At Boeing (06/09/98, 4:10 p.m. ET) By Gabrielle Jonas, TechWeb Piper Jaffray attempted to put to rest Monday rumors IBM had displaced Dell at Boeing for an account worth about $60 million a year. "The rumors have as much accuracy as the International Astronomical Union's computations that put the mile-wide asteroid about as far above our heads as a TV satellite," said Ashok Kumar, in an equity research note Monday. On the contrary, if any PC company is going to displace any other PC company at Boeing, it will be Dell (company profile) displacing Compaq (company profile) for its high-end server and workstation segment, said Kumar. Early Friday, Dell [DELL] slumped but recovered to close at 84 9/16. Piper Jaffray Monday reiterated its aggressive April strong buy rating on Dell. At the time, Piper Jaffray rated Dell with a target price of 115. In late April, however, shares were trading at 68 1/2 and hit the high 90s by late May. Although IBM (companyprofile) has not historically been a vendor of choice at Boeing, according to Kumar, Boeing inherited an "IBM Global Service" contract as part of its acquisition of McDonnell Douglas. According to Kumar, IBM's contract with McDonnell Douglas runs out in two years. "But Boeing has the option of extracting itself from this contract by buying a predetermined number of units," Kumar said. "We believe that Boeing is exercising this option." Dell, as Boeing's preferred vendor for desktops and portables, has a contract guaranteeing that status for three years, according to Kumar. Dell is one year into that contract. "There is a good possibility that they could displace Compaq Computer at Boeing in this high-end segment," Kumar said. "That's a speculative comment -- pure speculation," said Compaq spokesman Arch Currid. "We compete all the time in this market with companies like Dell and IBM," he said. "That's the nature of the business." In early May, Compaq slashed server ProLiant and ProSignia prices by up to 20 percent. The cuts came at a time when the Houston company has been slogging through excess inventory and facing more competitive pricing from rivals. "Dell has been winning market share on the high end," said Paul Mansky, an associate analyst at Piper Jaffray. "It would not be out of the realm of reasonable thought that Dell could squeeze Compaq out for the winning share," he said. "Dell does have value-added product, with quicker time to market and a more attractive price point with extend service agreements with Unisys and Wang," Mansky said. They can provide global support on the server high end as well." A Dell spokesman said the company would not disclose details about contracts with customers. "While IBM might displace Dell in some pockets, IBM's cost structure inhibits them from underbidding Dell consistently," Kumar said. IBM did not return telephone calls. "The general perception is that Dell retains or acquires accounts by pricing aggressively," Kumar said. On the contrary, Dell offers a better value proposition that reflects the advantages of its business model, he said. "What prompted the rumors we do not know," said Boeing spokesman Bob Jorgensen. But he said it may have something to do with the merger of Boeing and McDonnell Douglas last August. "When we merged, a lot of duplicative types of contracts and services were found to exist," Jorgensen said. "We looked at the computing strategy differences between McDonnell Douglas and Boeing -- McDonnell's was to outsource, and most of those computing requirements were outsourced to IBM." Boeing determined that keeping computing resources within the company was the right strategy, Jorgensen said. "The decision of whether we outsource to IBM or stay internal -- where Dell is that standard -- may have something to do with it." "Dell is meeting our challenges and needs, and [has] supplied quality maintenance in a timely fashion that keeps everything working. We have been happy and are happy with them and plan that to be an ongoing [relationship]...." >> Thanks for all your comments and posts. The DELL marketing machine continues to set new standards. The momentum they have built up is incredible. Just consider Kumar's comments about the potential for Boeing to switch from Compaq to DELL for servers. He is usually not overly Bullish about DELL and their prospects <G>. Yet, I think he must KNOW something about what's going on. More and more companies want to GO DIRECT and STANDARDIZE on DELL products. It's a BETTER way to do business..!! Best Regards, Scott