Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Lee who wrote (153673)	2/11/2000 12:50:00 PM
From: nolimitz	Read Replies (1) \| Respond to of 176387

Lee DDR stands for "double data rate"

To: Lee who wrote (153673)	2/11/2000 12:52:00 PM
From: rudedog	Read Replies (1) \| Respond to of 176387

lee - why are they so totally dependent on INTC? Is this because of tech support? No, it's profit and keeping costs down. DELL has a 1 1/2% R&D model - they MUST leverage development from their partners. One of the reasons for DELL's great ROIC numbers is that the "I" is so small. CPQ is now only about 30% bigger than DELL in revenue, yet spends 10 times as much on R&D... they have, across the board, about 8% R&D. CPQ develops most of what goes into their systems, chips as well as motherboards. DELL could not afford to do that with their current business model. The DELL culture is all about leverage, and that has been the strength of their model. But it comes with some strings attached, and the limited ability to innovate is one such string. In 1999, DELL missed market windows on several products due to their heavy dependence on Intel. The 8-way server fiasco cost DELL 6 months in the market - CPQ now has 90% of that business and DELL will have to overcome that lead. RAMBUS cost DELL pretty much their whole high end line - and what was left, floppermine killed. In addition, Intel could not deliver sufficient quantities of lower-end processors... But the alternative would be almost impossible for DELL to manage without an acquisition - the kind of engineering talent that can develop those products is scarce and in high demand. In addition, the shift in business model would have a big impact on DELL financials - CPQ spent more in R&D last year than DELL made in profits!! I think DELL is committed to the leveraged model, and that's probably right for them, but they may want to broaden the set of partners they depend on, but MSD has shown absolutely NO inclination to move away from Intel.