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


To: D.J.Smyth who wrote (160143)8/29/2000 3:07:00 PM
From: GVTucker  Read Replies (1) | Respond to of 176387
 
Darrell, RE: from 89 to 95 SUNW was little more than a software-over-system promoter whose stock price was as stagnant as corked pickles (until about three years ago)

SUNW price, year end 1988: $1.03906
SUNW price, year end 1995: $5.70313

448% over 7 years is hardly stagnant.



To: D.J.Smyth who wrote (160143)8/29/2000 3:15:32 PM
From: dwdkc  Read Replies (3) | Respond to of 176387
 
One important question on two subjects much debated on the board today.

1. short term issue--INTC's problem with the 1.13 GHz processor and the delay. Comments heard that this is a nasty "crisis", implying an effect on Dell's nearterm results.

Investable question-- so what? If there are two other Pentium III processors at 1 GHz available, not to mention how much of Dell's revenue is expected from this highest end segment, what is the true impact on numbers expected to be?

2. LT issue--Rudedog's argument that Dell really can't truly penetrate SUNW's high end market.

Investable question-- so what? How big is the market that Dell can attack with great success--everything a little below SUNW's technology level. Rude is still a big investor so I know he's considered it.

I still think Dell's business model is just fine for the new world. If you can manufacture and sell hardware that is in huge demand faster, cheaper and more flexibly than just about anyone else, you will make money. I've seen no evidence that this is still not the case. Dell has merely matured into a 25-30% LT growth blue chip that will see a 50-75 P/E for a long time. Never to be your next home run anymore, and never to really hurt you again, but a nice LT holding.



To: D.J.Smyth who wrote (160143)8/29/2000 7:12:08 PM
From: rudedog  Read Replies (1) | Respond to of 176387
 
Darrell - your post actually reinforces my point. From its inception in 1982 until the early 90s, SUNW was a workstation company and saw themselves competing with Apollo and the like, on the proposition that their systems were more open and much less expensive. They had already started shifting their thinking by 1990, and began to make investments in engineering and marketing with Oracle, Informix and Sybase. They placed hardware into those companies, put engineering teams on-site, and began developing hardware which could more fully support big database applications. They did the same with a number of key ISVs in the Unix application space. Their first server products did not come out until years later, but when they did, there were developers and customers who had a long history of working with SUN products, and a sales force who knew the accounts and the barriers to entry, many of which were eliminated by the new products. This made possible the rapid penetration of Wall Street by SUN / Sybase products running a variety of specialty software, and penetration of Oracle accounts which had previously been strongholds for DEC VAX (which had about 35% of Oracle's platforms at that point) and HP. It would not have been possible without a careful and well funded effort by SUNW.

I have heard about the demise of the Unix strongholds at the hands of Intel workstations for some time now. Even the earlier versions of those products were more powerful and less expensive than their SPARC counterparts. I agree that sooner or later that business will be affected by the differential in price / performance, but it will not be a watershed - the Unix vendors will gradually see more and more margin erosion as they move price points down. This has been happening for several years.

But by most reckoning, say Gartner or Meta analysis, the workstation market will remain split between Unix and "other" for a long time - for the foreseeable future. Linux may capture some of the Unix workstation business on Intel hardware as well.

In servers, the battle is harder. What I see happening is not a shift from Unix to NT, or even Solaris to Linux, but contention for new business gradually shifting the installed base. Three years ago, it looked like NT would continue to take new business and move up in the enterprise, but that growth has been pretty flat for the last 2 years. Windows 2000 may re-ignite that growth if it lives up to expectations.