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

To: BBG who wrote (145752)	10/25/1999 12:30:00 PM
From: BBG	Respond to of 176387

I just noticed that DELL is now offering Notebooks with the NEW Pentium III mobile CPU at 500Mhz... BBG

To: BBG who wrote (145752)	10/25/1999 1:03:00 PM
From: rudedog	Respond to of 176387

BBG - I agree with your post for the most part. Don't confuse my position on CPQ strategy with their absolutely terrible execution of that strategy. And I don't think they desire to give up market share - what I said was that #1 share is not the top priority. BTW CPQ has not given up any share - not to DELL, not to anyone. They have just not gained as fast as DELL. CPQ, like everyone in the industry, recognizes the benefits of direct selling - just as DELL is beginning to see some of the benefits of their competitors' techniques. I don't think CPQ intends or should shift entirely to direct for their PC business, especially given the huge portion of their revenue which is not in PCs and will never be sold direct. I also believe Pfeiffer had a "personal thing" about DELL, as did John Rose who headed CPQ's PC business and took it to #1. They did a lot of things which were not in CPQ's long term interest in their quest to "beat DELL". I don't sense that about the current management - they never talk about DELL, they don't seem to be spending money to "beat DELL"... re: CPQ is the worst run Mega Corp. in the U.S.... they cook the numbers, stuff the channel, paid way too much for Digital and don't have a clue as to how to integrate it, blundered big time with the Altavista deal, shopping.Com, and on and on and on Don't agree with much of this statement. There is no evidence that CPQ has cooked any numbers since Mason left, which was 1Q99, ancient history in the PC business. Likewise there is no evidence of channel stuffing, and appear instead to be shortages in the channel. Price protection which made stuffing possible is also gone. Digital was a great deal. They paid $9B for the company. They got more than $2B in cash, $1.7B in tax credits, sold AltaVista for more than $2B, and retained the cash cow VMS and services businesses which generate more than $9B in annual revenue, and the Alpha Unix business which is probably another $2B. Getting that business for what amounts to $3B is a steal. Integration was another issue. They should have done in 1998 what Capellas is doing now - shear off the unprofitable products, cut the headcount and infrastructure costs and get to a model that makes money. But I expect that will happen now. I don't see how you can call the AV deal a blunder - it was a distraction for CPQ, losing money, not linked to anything else CPQ was doing, and they got great value for it. Pie in the Sky dreamers may have pumped up the notion of what AV really was, but all it amounted to for CPQ was a money-losing venture play. Shopping. com and so on were undoubtedly part of the quid pro quo to make AV sellable. As far as the obsolete business model, it is the only business model for the high end which generates 55% of CPQ's revenue. Take off the DELL-colored glasses and look at the business CPQ is in. As evidenced by their #1 world-wide PC market share, it even works fairly well for selling PCs.