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

To: kaka who wrote (163975)	2/8/2001 12:13:19 PM
From: rudedog	Read Replies (1) \| Respond to of 176387

kaka - I'm not making any assumptions about the layoffs, which I just see as prudent management if they need to cut costs. But I have also been pretty vocal for a couple of years on the moves I think DELL needs to make to maintain their growth and expand their business. They started down the road on storage a couple of times and aborted the efforts. They have been timid about investing in server technology, preferring instead to mine the low end where they can get penetration and unit volume with products which are "good enough" and based mostly on the standard engineering from Intel. This also carries with it the lower margins more typical of PCs and does not support any particular differentiation - so a customer of a DELL server would be buying primarily on price, and would probably choose the lowest cost box for his next purchase with little brand loyalty. This is a strategy which fits the DELL model, is easy to do with their existing distribution, and allows them to exploit their advantages to gain quick share. So I can understand why they did that, short term. Long term, they should be using that time to build the next layer of the business. It now appears to me that they have no intention of going after the more difficult high end market unless they can do it using their traditional methods, which I don't believe will work. Take a look at linuxgram.com in particular, the part that says "Dell is also expected to cease funding any long-shot or long-term technology and focus, as it has historically, on what can be productized immediately in volume."