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

To: stock bull who wrote (49463)	7/1/1998 12:48:00 PM
From: Chuzzlewit	Read Replies (2) \| Respond to of 176387

Stock Bull, What do you think would happen to Dell if the other pc makers were to implement the model? Those that implement the model will initially lose market share because a significant portion of the marketing is due to the channel, and there is a learning curve on direct distribution. Within a year or so they will make it up. The result is that companies adhering to their current models, either direct or indirect, will gain market share over the short run. Thus, Dell ought to see a spurt in sales extending for a few quarters. But as this effect wears off, Dell and other direct sellers will see a decrease in growth with an increase in growth for the new entrant. But this overlooks the significant barrier that prevents the corporation from bridging the chasm. If Compaq, for example, attempted this strategy it would incur significant restructuring costs, and yet another year of losses. Since much of management's compensation is derived from stock options, and given the fact that management tends to act in its own best interests rather than the interests of either the corporation or the stockholders, greed will prevent this kind of revolutionary change. TTFN, CTC

To: stock bull who wrote (49463)	7/1/1998 12:49:00 PM
From: Lee	Read Replies (1) \| Respond to of 176387

SB,..Re:<<Dell has no legal protection on their model...as in copyrighted or patented.>> I believe Dell has a number of process or process related patents. JBN3 keeps track of these and could address this better. Lee

To: stock bull who wrote (49463)	7/2/1998 11:47:00 PM
From: jbn3	Read Replies (1) \| Respond to of 176387

re "Copying DELL's business model" Stock Bull, You said. "However, we should keep in mind that Dell has no legal protection on their model...as in copyrighted or patented. WRONG!!! DELL has a fair number of patents, including 33 this year: exchange2000.com I do not know how many of them are integral to the success of DELL's model, but I'm certain that copying DELL's process is not as simplistic as you (or a number of airhead analysts have proclaimed). Say, just for instance, that in order to emulate DELL's model, another company must pay to DELL one or more licensing fees. They will have to find economies elsewhere to offset their increased costs and continue to be cost competitive. And you said, "So, if Cpq, Hp, Ibm and the others were willing to take the disruptions into account, they could implement Dell's business plan." I believe that they have been trying to do just that for nearly a year. How long do you think their shareholders are going to hold still for these kind of 'disruptions'? And you finished, "What do you think would happen to Dell if the other pc makers were to implement the model?" Simple answer: they've been trying. they can't. By the time they get to where DELL is, the dust will already be settling on the road DELL took to tomorrow. I think that the only real hope for any of them to do it is to buy GTW. Then they could maintain their current customer and channel base, while modernizing and broadening GTWs offerings, gradually shifting their weight to GTW until they reach a viable channel/BTO balance. DELLish, 3.