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

To: Patrick E.McDaniel who wrote (143190)	9/29/1999 6:56:00 PM
From: LENNY PADRON	Read Replies (2) \| Respond to of 176387

Kemble's Dream shared by others. I dont know if this has been posted yet, but it could be interesting. Gerstner should call Dell By Charles Cooper, ZDNN September 29, 1999 11:17 AM PT URL: zdnet.com Sometime in the near future, Lou Gerstner and his board will need to sit down and deal with the albatross that is IBM's Personal Systems Group. Short of enlisting motivational assistance from Sammy (The Bull) Gravano, Big Blue has tried everything to fix this perennial money loser -- $240 million during the first six months of this year -- which still remains a work in progress. And there's little indication that change is in the offing. The latest numbers from ZDNet Infobeads place IBM a lame fourth with a 10 percent share of the retail market in August, down from around 12 percent a year ago. To borrow a pet phrase from my favorite Martian politician, that's just sad. I suppose IBM could turn to another McKinsey-trained marketing whiz, whack a few hundred people and see what sticks on the wall. But why go through the motions yet again? IBM might as well get really radical and turn to the prince of freaking darkness himself. I'm talking about none other than His Directness, Michael Dell. The fact of the matter is that Dell has forgotten more about how to profitably sell computers to the public than IBM has ever learned. And the time may be ripe to explore a possible deal, according to some industry insiders who say Dell Computer's founder is itching for a new challenge. For the record, Michael Dell is not interested in a change of venue. Or at least that's what he recently said in public. But I wonder if he meant any change of venue. "Never underestimate one's ego," the CEO of a Top 10 computer maker told me confidentially. "I don't think Mike's the type to pack it in. I think Mike wants to be Gerstner's replacement. Gerstner buys Dell when he wants out and Mike needs a change to keep excited." Dell does the big vision thing as well as anyone. You think Gerstner is God's gift to the computer industry? Hey, the guy didn't know a PC XT from an AS 400 until he arrived to take charge. In presiding over the fastest-growing and most profitable computer company in the industry, Dell already has the Wall Street palaver down pat. This would just be a bigger stage to parade around. Even if he's not promised the No. 1 job, Dell has an incentive to do a deal before the constellation of forces weighs against him. Of late his company has run into trouble servicing new corporate accounts, according to analysts. The miscues include misconfigured hardware and product delivery delays, two big no-no's when dealing with corporate America. Coincidentally, Dell earlier this week contracted IBM to handle installation and service for big corporate accounts, schools and government agencies. (In March, Dell inked a deal that gave it access to IBM components.) Even without immediately anointing Dell as Gerstner's successor-in-waiting, IBM would gain a lot by acquiring Dell Computer and allowing it function as an independent subsidiary as it subsumes the personal systems division. The combination -- assuming it's not mishandled -- would be unstoppable. When it comes to managing direct customer relationships, nobody does it better than Dell. And in the realm of services, IBM remains the best. With the 1995 Lotus acquisition, Gerstner orchestrated a delicate merger without triggering a mass exodus. Before permanently heading out the door to polish his golf swing, a Dell/IBM merger would crown Gerstner's place in the history books. siliconinvestor.com