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

To: jim kelley who wrote (148076)	11/27/1999 8:06:00 PM
From: jim kelley	Read Replies (1) \| Respond to of 176387

Courtesy of the CPQ thread: Message 12120712

To: jim kelley who wrote (148076)	11/28/1999 9:48:00 AM
From: rudedog	Respond to of 176387

Jim - The question really is "what percentage of the consumer market can DELL reach without having a retail channel?" Conventional wisdom said that the Small-Medium Business market was a "bricks and mortar" sell, much of it through small VARs who sold "white box" nearly at cost to get integration business. 2 years ago DELL had almost no presence in that segment, and almost no one bought SMB "direct". DELL did a number of innovative programs to counter the perception that "direct" was a disadvantage for VARs, including an "agent model" which gave the VARs a commission for DELL sales, leasing programs which allowed the VARs to provide hardware without carrying the inventory, and access to special configuration services "just like the big boys" which could make a small VAR more competitive on larger bids. They combined this with a careful education campaign in that segment showing the VARs how they could expand their business with less capital tied up through partnership with DELL. The result was that DELL went from nowhere to #2 in SMB in 2 years. With 12.5% of the business, they are on a path to overtake CPQ who has 13.3%. This was "out of the box" thinking combined with almost perfect execution. I don't know what they plan in the consumer space to counter the "conventional wisdom" about the advantages of brick and mortar. But I would assume that there will be some unusual offers or business arrangements which leverage DELL's model, as they did in the SMB space. IBM just withdrew their Aptiva consumer line from retail to offer it direct - I think they will run into a buzz saw from DELL.