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Technology Stocks : DELL Bear Thread -- Ignore unavailable to you. Want to Upgrade?

To: Fangorn who wrote (240)	3/20/1998 11:35:00 AM
From: rudedog	Read Replies (2) \| Respond to of 2578

Dell has been very cautious (correctly IMO) in building infrastructure for direct support. Many of the large accounts which needed handholding had a single Dell program manager with the arms and legs provided by DEC MCS (that will change now of course, Unisys was the next most used sub). Dell's strategy for those accounts was to provide whatever support was needed to get the business, but not to add fixed cost to get there, and never to lead with support services. That was CPQ's model also, before the DEC merger, now CPQ seems to be on the path to lead with services. Margins in services are much harder to manage, a services business is the opposite of Dell's model (since costs can't quickly be adjusted to match customer interest). I suspect Dell will continue to build a services model which mirrors their HW model, i.e. touch and hold the cost components for as little time as possible, and only when there is an order in place.