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

To: K. M. Strickler who wrote (51366)	7/15/1998 10:48:00 AM
From: rudedog	Read Replies (2) \| Respond to of 176387

Ken - DEC's service business was more than $7B last year and is predicted to be $12B over the next 12 months. This is big business. Service contracts of the type you discuss are less than 25% of the business. The big bucks are in planning and design services where DEC is absolutely the NT leader. For example they installed more than 60% of the exchange seats out there. About 75% of the exchange business was installed by either CPQ or DEC. There is currently no discussion of supporting any aspect of the service business with revenues from other product groups. CPQ doesn't work that way. Group general managers have pretty much total control over their P&L, and it would be a cold day in the south before they gave anything away without a quid pro quo. the computer requires less and less 'support'. Actually the trend is in the other direction in big companies. Hardware costs have been dropping but support costs for PC type systems have been rising. The 5 year cost of ownership is now about 12% hardware costs, about 35% support costs. In the old days, the equipment was not as reliable as the equipment of today Unfortunately not true. Base level hardware reliability has risen somewhat for PC class machines (especially servers) but is still several orders of magnitude below the 'big iron'. S390 and VAX systems routinely show availability of 99.95 and many are set up for 99.99. The best managed PC based systems (using RAID, failover networks etc.) are at about 98.5. The problem is not hardware, it is the ability to keep the system up during routine operations. Every time a device is added to the configuration, or a driver is upgraded, or the network topology or security is changed, the system must be taken down and restarted, and the whole system loses performance while the changes propagate. It will be at least another 2 or 3 years before these systems can begin to approach the minimum standards that S390, VAX, and other 'big iron' achieved routinely in the mid-80's.