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

To: Boplicity who wrote (161076)	9/26/2000 7:02:31 PM
From: Meathead	Read Replies (2) \| Respond to of 176387

Re: I can see you have not done any research in the storage sector... I wouldn't formulate such a bold proclamation on just one SI posting on the subject... Re: I suggest you spend time on the NTAP thread with DownSouth to get educated This is perhaps the BIGGEST mistake a would be investor could make. You can't hope to become educated by perusing a thread and getting caught up in the hype. I would suggest people avoid doing that. I 'get educated' by having lunch with the guys who work in the development labs. Actually Greg, a close engineering friend of mine is currently doing some part time consulting work for a storage category killer start up that will remain unnamed. I am no expert in all facets (my work is focused) but I have connections who are and have done enough research to be fairly familiar with where this sector is going as well some of the technical aspects and appeal of different products for the fragmenting market segments. Storage isn't just a bunch of hard drives hooked together... I'm well aware of that. At this very moment, management, protection and optimization software is being re-defined and radically improved by a host of companies... many of them startups right here in Austin. Investors are going to be blindsided if they don't understand what's in the works and what products will soon be coming to market. You probably won't hear about these developments on the NTAP and EMC threads who are more focused on their own developments and gushing over their dominance -- not on what anybody else is doing. Nor will you find many analysts or journalists who know squat about these privately funded innovations. Another start-up that I know of, if they get their way and their product gets to market and does what it's supposed to do, will turn the entire storage market on it's head by reducing physical storage requirements for certain applications. Re: The storage companies are not tied to their servers as the computer companies are, this kind of flexibility is appealing to the CIO's Dell can go after the same markets EMC does but SUNW can't. The first rollout from the ConvergeNet acquisition is purported to be a hertogeneous SAN so Dell won't be tied to WinTel. They will have the same flexibility a pure storage play company enjoys. But I don't expect Dell to go after EMC's highest end of the market anytime soon -- they won't have to. There are dozens of companies paving the way for them right now who will be rolling out open standards products that are far better, cheaper and easier to use than anything on the market today. And they will be task optimized from delivering rich media content to IO flogging applications. Ask yourself where you think the biggest demand areas will be in terms of sheer volume? That's probably where Dell will be positioning themselves. The point I'm making is in valuations and how dangerous it is to pay these premiums for companies who are directly in the line of fire from IBM, HWP, CPQ, DELL and a myriad of start-up companies. Re: it's not the hardware, it's the software As opposed to PC's which don't need software? All hardware needs software and just like PC's, storage will become commoditized at some point. Dell is currently a small player in their 2yr old business from what I understand, targeting the low to mid-range end of the market and still trying to round out their product offerings. They didn't make much of a dent in servers in the first 24mos either. By 2004-2005, the whole storage playing field will have been re-arranged. So answer me this. How do you justify EMC's current market cap of 224B when the entire market for storage will only grow to 40B-50B by 2003? How can EMC be worth more than IBM when there is no chance that they will ever achieve IBM like revenue or profits unless they go on an acquisition binge? Those who are predicting huge growth in petabyte terms are probably still underestimating. But to scale it linearly into revenue dollars is seriously discounting the effect of innovation... simple example circa 1993 -- a 10GB hard drive for $100 by 2001? No way! If you are listening to the investors and analysts of these companies blowing happy gas about how impervious their business is to competition, you are following blindly. Do some research regarding the potential 'disruptive' technologies currently under development... and I don't mean by Dell. Lots and lots of new stuff coming that will challenge the established leaders and open entirely new markets. EMC and NTAP will not be able to serve them all. MEATHEAD