Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Thomas J Pittman who wrote (54624)	4/27/1998 5:17:00 PM
From: Joey Smith	Read Replies (2) \| Respond to of 186894

All: a little glimpse of what awaits Intel's bottom line 2H98: 4-8 Way Servers (04/27/98; 4:27 p.m. ET) By Tom Davey, InformationWeek Dell Computer's low-cost, direct-distribution business model has driven the company's booming sales and low pricing, contributing to the intense price competition in the PC market. Dell last week stepped up its efforts to drive more aggressively into the server market by unveiling the PowerEdge 2300 workgroup server, its first server based on Intel's new 350-MHz and 400-MHz Pentium II processors. The server starts at about $3,200. Chairman and CEO Michael Dell recently discussed the server market and other topics with InformationWeek senior editor Tom Davey. Here are excerpts from that interview. How rapidly will Dell move to the higher end of the server market? With the Slot II announcement, we will be there with a strong enterprise data-center-oriented solution, along with multiterabyte storage that will facilitate the trend toward server consolidation. We're going to start with a four-way system. Like a lot of companies, we are waiting for eight-way technology to become more mainstream [with Intel's eight-way processor boards due late this year]. How widespread do you think the server consolidation trend is among your customers? I think with large customers, its huge. What's happening with servers is what happened with PCs, when PCs started popping up all over the enterprise. You have chaos. Now companies are looking to ensure data integrity, backup, reliability -- and having several hundred servers sitting in closets all the way around an organization is not the way to do it. So we're looking at delivering "rack-dense" server solutions with the right storage and performance. Which are the fastest-growing areas of your R&D budget? The R&D budget is growing in desktops, but not as fast as in servers and storage, because those are new areas. [Sales of] notebooks, servers, storage, and workstations last year together were about 33 percent of our revenue. And we'd obviously like to drive that in the next couple of years to more than half our revenue. Do you have big plans for the Unix market? Yes -- it's called NT. We like to think of ourselves as going where the puck is going to be, and I think it's going to NT. [Dell also sells servers that run Unix. -- Ed.] Your online sales have attracted a lot of attention. To what extent are major customers actually buying over the Web, and how does the Web affect the sales process? The role of the salesperson is not going away; it's changing. We've created premier Web pages with our 2,000 largest customers, and an increasing number of them are actually ordering online, although it's still a small percentage. What they are mainly doing is getting information online. They're using it to implement their IT standards. We put online all the elements of the relationship -- who the Dell contacts are in every country, the product road map, pricing, the support they have acquired. That makes the role of our sales and support people really much more consultative and problem-solving.

To: Thomas J Pittman who wrote (54624)	4/27/1998 5:50:00 PM
From: Dale J.	Respond to of 186894

re: <<I dont doubt for a minute that TK is doing his level best to make money by saying whatever he wants whenever he wants, but no matter what he says, the market is not going to grant Intel a PE like Pfizer's. They dont deserve it. >> Well said. I think the Market is at an unsustainable level. The Nasdaq is trading at a PE of 80. I few years ago it was trading at about 30 (which use to seem high). If interest rates move up (or threaten to move up), the party is over. Dale

To: Thomas J Pittman who wrote (54624)	4/27/1998 5:59:00 PM
From: Mary Cluney	Read Replies (1) \| Respond to of 186894

J,>>>I had intend to stop, but some of the stuff above is just wrong.<<< I didn't intend to get into this further either, but today is such a lousy day - well why not? >>>But, Mary, Intel has to spend 5 or 6 billion per year in research to keep that technology at the top of the heap. <<< Intel is in the driver's seat here. They could choose to spend any amount they want. They have chosen to spend more on R&D than their competitors combined gross revenues - instead of viewing this as a negative - look at it realistically as a tremendous barrier for competition. I can't realistically see this in any other way. >>>The PE that they are accorded by the market is reflective of that and other risks associated with the company.<<< You sound so certain - without any doubts - that the market is completely rational and almost as if their is an algorithm that determines P/E ratios. I have a lot of doubt in this respect. >>>Many of us remember that for a long time DEC was king, Cray was king, and heaven only knows how many other companies ruled the road.<<< Yes I remember those good ole days too. There was DEC, WANG, Prime, Nixdorf, Basic IV, Datapoint, Olivetti, NBI and a lot of the others. This time things are different Apple and Radio Shack capitulated early on - leaving only knock-offs. Like the Rolex & Philip Patek you find in Indonesia for $10.00. However, you aren't really the one whose posts upset me. It is those one liners that state unequivicably the case for a particular P/E valuation - the certainty and absoluteness about it. Mary