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

To: Chuzzlewit who wrote (47010)	6/10/1998 8:31:00 AM
From: rudedog	Read Replies (2) \| Respond to of 176388

Chuz - As I understand it, CPQ's plan is to provide the infrastructure for direct sales but fulfill primarily from the channel. The channel gets less margin than for their own sales but also has less COGS. I also believe this is primarily a defensive move by CPQ and the real purpose of the change is to take some of the features of the Dell model and use them against HP, IBM and Sun. CPQ believes that they are in a better position to do this hybrid model than the other big players, although not likely to out-execute Dell. If they can maintain share against Dell then CPQ and Dell will take share from the others in the commercial space (CPQ on the high end and midrange, Dell on the midrange and low end). CPQ believes they can dominate the consumer space with their current model, which I believe is accurate. So I think the press will continue to look at this as competition with Dell but internally CPQ will look at it as borrowing a page from Dell's playbook to take share in a market where Dell will not go because of the other infrastructure costs (i.e. service offerings). I think you are right, that if overall growth slows then there will be increased competition for some of the same customers, with Dell and CPQ continuing to grow, HP maybe maintaining, IBM losing some share. On the high end CPQ and HP should take share from Sun and IBM midrange offerings.