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

To: jim kelley who wrote (49815)	7/5/1998 8:05:00 PM
From: Chuzzlewit	Read Replies (2) \| Respond to of 176387

Jim, thanks for a very informative post. I guess this was the point I was probing with my question to Rudedog. Is it fair to say that the vast bulk of Compaq's R&D spending is for proprietary components that are quickly superceded as industry standards emerge, and that the point behind developing these components is to lock future proprietary replacements from Compaq as a sole source in? TTFN, CTC

To: jim kelley who wrote (49815)	7/5/1998 11:50:00 PM
From: rudedog	Respond to of 176387

Jim (and Doug whoever he is) - Great post! this draws the key differences in approach very nicely. A couple of key issues which are mentioned in the reply but not explored - They have for example been offering an 8X server for some time. This is not standard Intel/Misrosoft technology. Intel bought Corollary, which was CPQ's partner in development of the 8-way chipset. I don't think you can get more standard than that - this will be Intel's Xeon 8-way chipset. And CPQ will get a royalty on each one sold since they own the intellectual property jointly with Corollary. As INTC and MSFT create industry standards, CPQ is forced to adopt these standards True, but it's a 2-way street. Intel and MSFT have had to adopt CPQ's standards on 66MHz PCI, hot-plug PCI, cluster interconnects, 8-way server technology, and a host of other technologies, simply because CPQ has such huge market presence that they can't afford a standards war. Unless there is a significant price-performance advantage, different and proprietary is not better Another great point, and one that was not lost on CPQ management. Since 1994 there has been almost no development of proprietary technology. If CPQ can not get agreement from MSFT and Intel around adoption of the technology within 9-12 months of introduction, they don't do it. CPQ's large R & D will have to be redirected if it is to provide any significant customer advantage or time to market advantage now that Intel and MSFT are providing the core technology Also true. CPQ will either need to shift R&D into areas where there is a unique advantage or drop back behind the 'lead sled' (which would be Intel in that case). Based on what I have seen they do not intend to drop back. Dell will win the battles they choose. CPQ will seek new ground where they can lead through differentiation in order to maintain the margins necessary to support their business model. My opinion exactly, except that I would qualify to say Dell will choose the battles they can win. Dell will continue to be successful if they build on their strengths and don't get sucked down any of the high-inertia models.