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

To: Chuzzlewit who wrote (47855)	6/16/1998 5:57:00 PM
From: JRI	Read Replies (2) \| Respond to of 176387

Chuzz- The flaw in the logic pattern (patterson?) is becoming more clear to me now... CPQ buys DEC (primarily) so that they are BOTH a hardware and services firm...by their logic, services is where the margins are.....so every time they get their hardware installed (and they make a little money), they open a bigger "profit door" by also providing the service.....Convenient, you buy my hardware, and now I am "one-stop shopping" for the services, too. However, there is a problem...a big problem. If Compaq has spent billions and billions of dollars to restructure their company in this manner (hardware and services)...basically, betting the future of the company on this "new" strategy....how can they go back now, and tell the Cap Gemini's/Andersen's/EDS etc. you have nothing to worry about....keep recommending our machines.....it is not our intention to take business away from you.... OF COURSE IT IS THEIR INTENTION....THAT IS THEIR STRATEGY! THEY WANT TO BE KING OF SERVICES! So, at this point, if you are Cap Gemini, etc.....Why would you take the risk of recommending Compaq when there are equivelent hardware solutions (or close, or better) out there? It would not make sense. You should not take the business risk (of losing future service business as CPQ tried to implement the strategy that THEY HAVE BET THEIR COMPANY ON) I mean, isn't CPQ going to use the fact that they manufactured the equipment (OEM), (so they know it best) as one of their mantras to win the service business...given this, wouldn't CPQ's competitors on the service end be wary of letting CPQ's hardware in their accounts? With Dell, these service players have nothing to worry about.... CPQ can not have it both ways...They have committed to a "closed" strategy....other service providers have a right to worry...They would be foolish (and would not be compromising their business) by not recommending alternate solution than CPQ, where applicable. This sounds like a long-term winner for Dell to me. Maybe this was blatently obvious to you....but the more I think about it, what MD said the other day on this issue (on CNN) makes more and more sense, and is not just "PR" as Rudedog would claim....Any thoughts? Am I missing anything? (Feel free to jump in, Rude!)