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

To: Chuzzlewit who wrote (147298)	11/12/1999 1:58:00 PM
From: Edwarda	Respond to of 176387

There you've put your finger on the eventual problem: To what new businesses is Dell's model applicable?

To: Chuzzlewit who wrote (147298)	11/12/1999 2:26:00 PM
From: Lee	Read Replies (1) \| Respond to of 176387

Hi Chuzz,..Re:. As I see it, the major hurdle (and opportunity) facing Dell is its entrance into new businesses where it can extend its superb business model. Ashok Kumar alluded to a new direction this morning when he stated Dell would be moving more into the Enterprise market with some help from IBM, (presumably on a service/consulting basis). But if this is the path toward higher margin business, it seems to me that the business model will have to be modified, even if Dell had the service/consultant capability 'in house'. Also, the ratio of operating/net income is slowly decreasing (from Nov.'98 through Oct.'99) so even if Dell concentrates on core businesses with a focus on making inroads in the Enterprise business segment, it seems they will have to step up considerably the push into Enterprise. We discussed the entrance into new businesses last year and some thought of some kind of parallel hardware business closely connected with the current product mix while others speculated on a completely different kind of commodity type business. It was my understanding that either of these two types would make the best use of the business model. But if any expansion goes into the service/consulting arena, then other metrics will have to be used. Just puzzling over some crossroads. <g> Cheers, Lee

To: Chuzzlewit who wrote (147298)	11/12/1999 2:54:00 PM
From: LemurHouse	Read Replies (1) \| Respond to of 176387

<<<<As I see it, the major hurdle (and opportunity) facing Dell is its entrance into new businesses where it can extend its superb business model.>>>> I think they are doing this with their entry into the storage, and storage area network markets, don't you agree? Both of these are immature markets and both hold tremenous opportunity. I would be concerned if Dell added too much too fast, and compromised execution of either their core or their new businesses. I also think there is still plenty of room for them to grow organically within their existing markets, at least for the next couple of years. (Meaning sustained growth at around 40%. And I'll take a secure 40% growth in the underlying business any time.) The numbers would seem to support that. Granted, at some point you reach a degree of market penetration where you either enter new markets or accept the industry growth rate. But I think we're at least two or three years away from that kind of constraint, don't you? There have been a lot of worries expressed on the thread about the stock price and the future of the company. While I certainly understand people's concern over the stock price, I think Dell's action over the past three quarters is neither very surprising nor overly bothersome. The stock was ahead of itself last Jan/Feb, and its been taking a breather ever since. It was the stock of the 90's for heaven's sake, and provided superlative returns to those of us who were smart or lucky enough to stay long. A little patience is in order, I think, until the fundamentals catch up with the price. And I do believe they are catching up. I think Dell will be "fasionable" again soon, and we'll see the PE expansion that we all love so much. Cheers.