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

To: rudedog who wrote (144567)	10/14/1999 11:53:00 AM
From: Mike Van Winkle	Read Replies (3) \| Respond to of 176387

Rudedog, re: response to Sig sig - Dell is oriented to eliminate the service business for their product by producing non-failing items/systems That just does not work economically. Getting an additional 9 of reliability increases the price by a factor of 5. Neither DELL nor anyone else in the business can produce a product which is significantly more reliable than the accepted standard without pricing themselves out of the market. But more importantly, this has nothing to do with fixing broken PCs. These services are system design and configuration professional services of the type IBM Global services and CPQ services provide. The steps you point out are a great way to reduce DELL's "back end" support costs but not part of the services discussion.<<< First, Dr. Deming and other quality control innovators have shown that quality improvement results in lower costs, contrary to previous thoughts of manufacturers. This is very old news but should not be forgotten. Second, for other hardware and some software issues Dell has worked on their internet support strategy. A low cost method for handling the three year warranty was needed before they entered into the low cost consumer market and based on their announced plans, it is in place. Third, Dell has always made clear that they are not entering into the area of service that needs legions of service people. That does not negate growth of Dell's service revenue and earnings. I see no change except that Dell has upped their market share target from 25% to 50%! This optimism, as I see it, is tied to Dell's planned 50% cost reduction from their already stunning low manufacturing cost. Cheers Mike

To: rudedog who wrote (144567)	10/14/1999 12:13:00 PM
From: Sig	Read Replies (2) \| Respond to of 176387

<<<I don't know what internal issues kept them from executing on their "roll your own" services initiative, but they know a lot more about what they can and can not do than I do. If they really could not get the services business going the way they wanted, then the current strategy is the best to maintain growth in the key enterprise sector. >>> Dog: I realise you are discussing a higher level of 'service' beyond my experience, but here are some other comments FWIW. One big problem at Dell is finding enough qualified people. Wages increasing, States offering $10K bonuses for technology people just to stay in their jobs, Government trying to ease permits for foreign workers to come here. Its not a good time for Dell to spend their money to build up services against the competition beyond that required for their major customers. My DIL works in a related field, received two $25K bonuses this year -so far But many say now Dell should go for the high margins in the service area. Yet Dell has done and will do very well with the 22% gross,8% net earnings which permits them to be the low-cost producer and build market share. Another point here is that building a complete service organization to 'fix' only Dell computers would not be efficient because of the dispersed locations. A Dell man in Fort Stockton would not be ahhhhhhhhhhh--- too busy. But if he fixed all types of computers it may be profitable. And also with the Air Force, each repairman would require clearance and background checks. One for IBM, one for CPQ, one for Dell, one for HWP,one for (old Dec), one for (old Tandem),etc. So if the IBM on-site group could service the 'other guys' equipment it would be a cost saving operation. To do that IBM would need access to the Dell configurations thru WWW.Dell. com, and I assume that is part of the IBM/Dell agreement. Companies that learn to work together in this manner will be the ultimate survivors and prosper. Guess I'm just wordy today.Sorry Regards Sig