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

To: edamo who wrote (133538)	6/20/1999 10:17:00 PM
From: stockman_scott	Read Replies (2) \| Respond to of 176387

More from SG Cowen and a follow up to edamo on CPQ...<<so tell me about dell "storage" play...how much of the market do they have...how long will it take them to surpass emc and ibm....while you're at it how large is dell's service force..bigger than ibm or cpq?...not to detract a thing from dell, but i stand on my comment, cpq has more capabilities than dell...nothing to do with current profitability...>> edamo: Compaq may have great R&D and a lot of capabilities BUT they have lost a great deal of their top talent and the company's workforce has a morale that is at an all-time low. Human capital is essential for any company to succeed. The best and the brightest going into high tech want to work for the DELLs, Microsofts, IBMs and NOT the Compaqs. People like to work for a winner. A recent poll of MBAs from top programs around the country showed that only two technology firms were in their "top ten companies to work for"....it was all leading consulting firms, investment banks, Microsoft AND NOW DELL on that list. DELL has access to the BEST talent on the market and the workforce is inspired and motivated to achieve even greater things in the years ahead. Michael Dell realizes how important his people are and he constantly challenges his team to set and achieve stretch goals -- and often they do. Now at Compaq we have a work force that is demoralized and frustrated and updating their resumes. Much of the top talent has already left and more is leaving. There are still many innocent victims at CPQ but why will they sacrifice and go the extra mile -- now that the company is starting ANOTHER round of layoffs..?? It will take much more than a new CEO to turn CPQ around....DELL is one of the Most Admired Companies in America...and for good reasons. Compaq is one of the most troubled firms. IMO, it will be many years before the best and the brightest want to work there. In fact, I expect that some of the outstanding talent from Compaq will migrate to DELL -- if they want to stay in Texas and in the hardware industry. Now you asked about DELL and the enterprise space. A few more quotes from SG Cowen's new report on DELL that was released last Thursday.... <<...Even assuming that Desktop ASP's for DELL plummet from about $1870 last calendar year (our estimate) to perhaps $1200 by 2002 (about a 10%/annum rate of decline), overall systems revenue/unit will decline much less due to the increasing importance of enterprise systems revenues (servers, storage, enterprise services); in fact, we would not be surprised to see enterprise server ASP's migrate north from recent $8000+ levels to north of $14,000 in 3 years as DELL attacks storage and successfully attaches services revenue components. By 2002, therefore, the desktop revenue stream could amount to just half of total systems revenues, and perhaps no more than 45% of total DELL revenues. More importantly DELL's business model is ideally architected to convert customer acquisition into downstream revenue; we think the opportunity is significant in both the home/consumer/small business markets as well as DELL's traditional large corporate accounts......In the enterprise arena, DELL is extending its offerings along several well-defined axes: product (broaden from classic desktop, to notebooks - including most recent aggressive Celeron-based corporate notebook effort, sourced in the US, to Enterprise systems); services (offer "SKUable" services products: warranty, installation, 24 hour support, etc) and e-commerce (third party products, tight integration with Premiere Pages structure)....Obviously, DELL's competitors are attempting to go down a similar path. However, we attach a much higher probability of success to DELL's efforts because it has better relationships.>> I couldn't have said it any better. SG Cowen understands the power of DELL's business model and their focus on delivering in a BIG way in the high end of the enterprise space. I sure wouldn't bet against Michael Dell. His company and his partners will continue to surprise the skeptics. DELL has the talent, the vision, the business model, and the culture to execute. I am sorry I can not say the same thing about Compaq. DELL will continue to prove they are the next DELL. Best Regards, Scott