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To: Lizzie Tudor who wrote (14254)	10/9/2002 8:04:33 PM
From: Bill Harmond	Read Replies (3) \| Respond to of 57684

biz.yahoo.com

To: Lizzie Tudor who wrote (14254)	10/10/2002 12:23:11 AM
From: techanalyst1	Read Replies (1) \| Respond to of 57684

story.news.yahoo.com

To: Lizzie Tudor who wrote (14254)	10/10/2002 7:24:25 AM
From: stockman_scott	Respond to of 57684

Michael Dell: The Eliminator By Dan Farber ZDNET Tech Update October 9, 2002 Michael Dell is the eliminator. It's in his and the company's genes. He eliminates costs and competitors with a relentless focus on driving costs down and in forming tight relationships with customers and suppliers. Yesterday, HP CEO Carly Fiorina categorized Dell as merely a distribution channel. Today, the Dell chairman and CEO responded by saying the direct model overshadows other skills the company has in R&D and manufacturing. In responding to a question at Gartner Symposium ITxpo about Dell's lack of innovation and R&D, Dell said that over 90 percent of the revenue comes from what the company designs and manufactures. He said that Dell has garnered 750 patents since the late 1980s. Patents and manufacturing acumen aside, innovation for Dell comes in understanding how to recognize market opportunities (like network switches and blades) at the right time, and applying the Dell direct model and supply chain management to squeeze out costs and competitors. "My belief is if you look at the entire $800 billion IT market, over time virtually all these products go through some sort of commoditization or standardization process. That is fantastic for customers because it cuts in half the cost of products, and it's fantastic for Dell because that's where the Dell business model really shines," Dell said. Invoking his reliance on industry standards, he took a shot at companies who use R&D as a way to protect proprietary franchises and lock in customers. Dell pointed to network switches as an example of how the business model works effectively beyond desktops, notebooks and servers. He said that Dell shipped 1.8 million network switch boards in a year, gaining a 10 percent share in very short time. He hopes to do the same with printers and handheld products next year. Regarding printers, Dell said he can dramatically lower the cost of printing and imaging for customers. "We think we can drive down the cost of owning printers, including consumables," Dell told the crowd of more than 6,000 IT executives. When asked about selling HP-compatible toner cartridges, Dell said that would not be part of the plan. That may give HP's Fiorina some relief, but only temporarily. Dell more than intimated that he will go after HP's business with its cost efficiency and direct model. Dell also touted the services business as its fastest growing division, saying that the company has applied its business model to drive costs out of that market. "If you look at same day, gold, or platinum support, we have brought down prices by 40 to 50 percent on average," Dell said. "It's part of our business model. We don't want to see customers charged an exorbitant rate. We fundamentally believe that every part of the market will find a way to dramatic decline in cost." Dell was somewhat vague is describing precisely how the company could maintain a high level of customer satisfaction at far less cost than other service providers for enterprise customers. He calls his offering "semi-custom services," which are services that, once created, can be redeployed by other customers without much further customization. Semi-custom may work for a range of customers installing Linux or e-mail servers and "close to the box" implementation, but many enterprises will need more individualized solutions. If Dell is going to be the price leader or take business away from IBM and HP, it will have to figure out a way to either eliminate people costs or convince them to use the semi-custom solutions. Besides being an eliminator, Dell is patient. Just as he has waited until the market is ripe to enter the handheld business, he will follow a measured path in growing the services. Dell currently has 8000 people in the services business, and said the division would grow organically and that he would be open to acquiring smaller, strategic service organizations to fuel faster growth. Dell says his job is to be the absolute best in the world at driving costs down to save customers money. So far, he is proving that his model is superior in many respects. As the company expands into services, printers, handhelds and other areas, it may become more difficult to keep the wheels on. Based on Dell's ability to grow and sustain its business even in this economic climate, I would look for the company to be a big factor as it enters those new markets. techupdate.zdnet.com ___________________________________________________ ________________________________________________ btw, I remember in 'the boom period' when SUNW and EMC had market caps that had surged up into the stratosphere well beyond DELL's...Check in today and you'll see DELL has weathered the downturn MUCH BETTER than some of these former tech powerhouses...DELL's market cap is more than 6 TIMES EMC's or SUNW's....Hmmm...Who's really making money today...??...FYI, here's a chart of how these firms have performed over the long haul... finance.yahoo.com

To: Lizzie Tudor who wrote (14254)	10/10/2002 9:15:22 AM
From: stockman_scott	Respond to of 57684

Accenture Profit Falls Amid Downturn Reuters Business Report Thursday October 10, 7:48 am ET NEW YORK - Accenture Ltd. (NYSE:ACN - News), the world's largest consulting firm, on Thursday reported quarterly profits fell more than 10 percent, dragged down by a charge for consolidating excess office space amid a brutal consulting climate. But the company said it would meet earnings and revenue targets for the current fiscal year, reassuring jittery investors after a rocky summer for consultants. Investors dumped shares of consulting firms after computer services giant Electronic Data Systems Corp.(NYSE:EDS - News) issued a mammoth profit warning last month, citing a virtual stop in technology spending by customers. "The fact that they reiterated guidance should make investors feel very comfortable with the story," UBS Warburg analyst Adam Frisch said. "People are just looking for basic execution here." Specifically, the company said it expected to report earnings of $1.05 a share in fiscal 2003, assuming revenue growth that ranged from flat to an increase of 2 percent. For the fiscal fourth quarter ended Aug. 31, the Bermuda company reported its net profit dropped to $38.1 million, or 8 cents a share, from $42.7 million, or 10 cents a share, a year earlier. Excluding investment losses and a $111 million charge for shrinking office space around the world in a bid to cut costs, Accenture reported a profit of 16 cents a share. On that basis, analysts on average expected the firm to post a profit of 16 cents a share in the fourth quarter, according to research firm Thomson First Call. Net revenues for the quarter slipped 3 percent to $2.69 billion. Faced with a reluctance by clients to spend on big-ticket technology and management consulting projects during the economic downturn, the company has moved aggressively to cuts costs by slashing jobs and pay for its partners. In the fourth quarter alone, the company said it recorded $125 million in costs to realign its workforce. It also slashed annual bonuses and other compensation for partners by $140 million. Accenture shares, which have largely been on a downward trend since April as investors fretted about the prolonged downturn in the consulting sector, closed at $12.46 on the New York Stock Exchange on Wednesday. They have dropped more than 53 percent since the start of the year, underperforming the broader S&P 500 index, which has dropped more than 32 percent in the same period.

To: Lizzie Tudor who wrote (14254)	10/10/2002 2:50:49 PM
From: stockman_scott	Respond to of 57684

Carly, You Got A Dell By Quentin Hardy Forbes.com 10.09.02, 4:00 PM ET forbes.com ORLANDO, FLA. - Michael Dell is Carly Fiorina's worst nightmare. Hewlett-Packard (nyse: HPQ - news - people ) Chief Executive Fiorina spent $19 billion on Compaq Computer. The acquisition was not so much for Compaq's PC business--Dell Computer's (nasdaq: DELL - news - people ) relentless cost-cutting model has taken out most of its competitors' profits there--but in the hope of building a consulting business, particularly in managed services, that could complement HP's highly profitable printing business. The consultants could also help sell a full line of PCs, servers and high-end computer gear from the combined operations of HP and Compaq. Now, here comes Michael Dell, vowing to turn his company's low-cost, process-based manufacturing model directly onto both the printing and managed-services businesses. Let the price wars begin. "Commoditization is our whole business model," says Dell. "Our plan is to grow, no matter what happens to the market." Fiorina may already see him coming. In a testy performance at a Gartner analyst conference yesterday, Fiorina dismissed Dell Computer as merely "a channel of distribution," adding that "imaging and printing is a capital-intensive, intellectual property-intensive business." Dell's move into printing comes through an alliance with Lexmark International (nyse: LXK - news - people ), long a distant No. 2 printer company behind HP. Dell notes that his company has $8.6 billion in cash and some 750 patents, but he doesn't think that's really the point. "There's a lot of 'emperor's new clothes' around research and development," he says. "How much R&D is just designed to lock in customers?" As for being a channel, Dell says, "We think working directly with customers makes a lot of sense." Dell isn't planning to sell HP-compatible printer cartridges--a huge profit center for Hewlett-Packard. Instead, he says, early next year Dell will begin offering lower-priced printers for individuals and work groups, and will likely offer direct delivery of cheap replacement cartridges. "We've looked at the supply chain [of printer manufacturing] and seen a lot of inefficiencies," Dell says. Likewise with services. Fiorina is pushing HP as "the only system business" among the big IT players. Her lieutenants say they'll attack No. 1 player IBM Global Services on the basis of cost. It's a nice angle, since there has been no big hardware/consulting shop around against which to benchmark IBM's performance. But Dell aims to bring his hyperefficient approach to managed services, too, effectively benchmarking both HP and IBM. "There's a lot we can do, taking the business from a custom to a semi-custom approach," says Dell. "The new model [for services] will be focused on cost cutting." That's also bad news for consultant businesses like Electronic Data Systems (nyse: EDS - news - people ) and Accenture (nyse: ACN - news - people ), which aren't used to this kind of price pressure. If the besieged consultants are looking for Dell to grow through acquisition, as HP did, forget it. "You might see a small, and I mean really small, acquisition from us," says Dell, "but nothing big." Dell Computer currently has a services staff of 8,000, delivering 10% of its revenue. Fiorina went out of her way to dis Dell, but does Dell fear Fiorina? "I love being told I can't do something," he says. "It's great when you show them you can."