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To: Nancy who wrote (11847)	7/12/1998 6:20:00 PM
From: Jack T. Pearson	Read Replies (1) \| Respond to of 42787

Re: Service and product integration. You wrote: "DELL doesn't see it necessary for it to provide service directly - that the service and product does not need to be integrated." I think you are correct on the first part of your statement, but not the last part. Michael Dell gave a presentation a month ago about virtual integration. There is also an article in the March-April 1998 Harvard Business Review titled: The Power of Virtual Integration: An Interview with Dell Computer's Michael Dell. Michael believes in integration of services, but not in the traditional manner. He is implementing strong virtual integration. "Virtual integration means you basically stitch together a business with partners that are treated as if they're inside the company." This is different than out-sourcing. Dell's partners have access to appropriate Dell information systems data and are fully integrated into the relevant Dell business systems. For example: In December 1996, I bought a Dell computer for home. I discovered that it contained a graphics card with a bad connector that occasionally caused strange color effects on the monitor. I called Dell. After I hung up, Dell ordered a replacement card from the vendor to be shipped overnight to Dell's DEC service representative in my area and contacted the service representative to get the repair scheduled. The DEC service representative contacted me within four hours of the time I called Dell and set up an appointment to install the graphics card the next day. I had a new graphics card installed within 24 hours of my first call. After the card was installed, I filled out a service questionair that went back to Dell to aid them in monitoring service quality. That's virtual integration! Works great! (Service representative worked for DEC, but Dell was using other service representatives as well at that time.) Based on my experience buying the PC and the service, I bought my first shares of Dell the next week. I've been buying Dell every since and now have many, many more shares.