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

To: jhg_in_kc who wrote (137533)	7/25/1999 12:42:00 PM
From: rudedog	Respond to of 176387

jhg - I have been interested in Citrix for more than 4 years and have held a small position for most of that time (which I still hold). The development of thin clients is not necessarily at the expense of DELL revenue, especially given DELL's desire to move more server hardware on a percentage basis. CPQ has built a very substantial business selling systems built around Citrix, even though CPQ does not make a thin client (they work primarily with Wyse on those systems). I don't know the exact numbers but an engineer who works with those products says that there is more than $500M in CPQ HW business directly leveraged by the Citrix-based system sales, all servers. That kind of revenue pop would be a big boost for DELL and the partnering model is a natural for DELL as well. They could do a deal like the one they did with Sony on monitors, where the parts all come together seamlessly on the customer's dock as though they were all ordered from DELL but in fact the thin clients come from somewhere else. Many thin client apps are in areas where the sale just would not happen if "fat" clients were required, so this could be incremental server revenue for DELL without any significant loss in client revenue. On a reveune basis, the hardware in a total thin client system still dominates the software by more than 5 to 1. A typical server configuration to support a hundred thin clients might be a full-dress Xeon (and in the future 8-way Xeon) with as much memory as the box will hold and lots of disk. A server like that might dress out at $100K or more. The clients might be in total $25K, and the software another $25K. Compare that to a "fat" client solution. The 100 clients would be more like $250K. The server would be smaller, maybe $30K, but the combination of client software would probably be another $100K or more. From DELL's perspective, getting a higher-margin server sale on a larger percentage of deals would be a win.