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Technology Stocks : EMC How high can it go? -- Ignore unavailable to you. Want to Upgrade?

To: Road Walker who wrote (12896)	7/17/2001 4:35:27 PM
From: Gus	Respond to of 17183

But when the economy turns, I wonder what the competitive advantage will be worth......JMHO, a portfolio limited to companies that are increasing IT spending this year might be a pretty good portfolio a few years from now..... That's a very interesting idea, John. Large scale IT projects like data warehousing, ERP (Enterprise Resource Planning), SCM (Supply Chain Management), CRM (Customer Resource Management) and EAI (Enterprise Application Integration) actually have very high failure rates (50%-70%) partly because customers abandon them before completion so the companies who persevere with those investments are bound to have an advantage over those who don't. As Jack Welch put it: "In this company we are driving the hell out of IT spending. We think it is the lifeblood of the company, and digitization's the most important thing we've undertaken. So this is the moment to widen the gap as far as we're concerned, and you won't see one ounce of slowdown in tech spending from us. But there will be companies that will hold back their IT spending and, frankly, I hope our competitors do." Anyway, here's a profile of a major ERP deployment from a Meta Group presentation in Germany. The ERP project is expected to cost anywhere from 1.7% to 3.1% of the company's annual revenues. Total Cost of Storage accounts for 15% of that estimated annual cost of this ERP deployment -- or 0.26% to 0.46% of the company's annual revenues -- with Storage Hardware accounting for a mere 10% of Total Cost of Storage -- or 0.026% to 0.046% of the company's annual revenues. This dovetails with the general view that storage hardware represents only 10% to 20% of the total cost of storage since the cost of managing storage is growing faster than the decline in the cost of storage. Total Cost of Storage Business Continuity 28% Application Testing 26% Storage Network 15% Backup/Restore 15% Data Sharing 10% Storage Array Management 6% Total Storage 100% ERP deployments are typically multi-year deployments that can range from $300,000 to $400 million so obviously mileage varies from company to company.