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

To: D.J.Smyth who wrote (153414)	2/9/2000 7:03:00 PM
From: edamo	Respond to of 176387

darrell "dell has some opportunities here to reinvent pc centric designs"........interesting concept! been saying this for a year....only to be flamed by "not dell's job, they are a fast follower, let someone else establish the space then dell will fill it" problem is, just as last year, dell is the space...and to repeat "who are they going to follow...themselves???" a bit like a dog chasing his tail until he collapses in exhaustion...

To: D.J.Smyth who wrote (153414)	2/9/2000 9:32:00 PM
From: rudedog	Respond to of 176387

Darrell - I think you misunderstand my position. I do not think that the triumvirate will use PCs as a loss leader - just the opposite, their strategy is to make their PC operations, which are currently losing money, profitable. At the same time, they plan to reduce the proportion of overall revenues derived from PCs. They will do this for 2 reasons - 1) The PC business is showing decreasing growth, both from a unit and revenue perspective. Long term it becomes more of a "cash cow" then a growth engine. 2) Margins are being reduced as the space becomes commoditized. In order to improve overall GM, they need to shift percentage revenues to their higher-margin enterprise and service businesses. There will always be a place for the high-functionality, high-performance PC, but that space even today only accounts for about 20% of the business. Most commercial accounts are looking for the product that gives them adequate "productivity" capability (email, word processing, etc.) at the lowest overall cost. Most of that cost is related to administration and configuration of the desktop machines. By eliminating the "legacy" ports and reducing the number of options, computer vendors reduce the headaches that big IT shops have in managing their user base. These machines are not "stripped down" - they have fast processors and good functionality. But they are easier to configure, and because of the elimination of legacy ports, they support plug and play and other autoconfiguration capability much better than traditional PCs. The scheme the triumvirate is using is to maintain those machines as an integral part of an overall systems sale, offering the overall cost of ownership benefits as a key selling point, in addition to reduced acquisition cost. In addition, each will try to differentiate their products by providing better manageability if everything is from a single vendor - a strategy that has worked very effectively for Sun over the last few years. This creates a "beneficial circle" - the products work better because they are from a single vendor, so the bias is to stay with that vendor for additional components, either on the desktop or in the data center, which in turn decreases the cost of ownership, which is a further inducement to stay with the product family... As far as owning DELL the stock, I plan to retain a fairly substantial position - just not as much as I currently hold. DELL and CPQ comprise nearly half of my portfolio and were the worst performing stocks I held in 1999. Clearly some adjustments need to be made. While I think DELL will appreciate this year, I want to move some of my money into areas that I think will have better performance. CPQ, because it has been so beaten down, stands to perform a little better this year, but at some point I will reduce that holding also.