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

To: Chuzzlewit who wrote (57220)	8/10/1998 10:30:00 AM
From: rudedog	Respond to of 176387

Chuz - I agree with your conclusion but disagree with a couple of points in the analysis - I believe that this is one of Compaq's missteps that makes Michael Dell smile the most. It probably made MSD smile but I don't think it was a misstep for CPQ. CPQ had looked carefully at the value of the partnering relationships with EDS and others and had determined that those outfits did not leverage CPQ hardware - overall, CPQ's share of the deals where they were involved was about the same as their share in general. Under those circumstances CPQ gives up the leverage of being the lead service partner with no revenue benefit. The same dynamics probably do not apply to Dell, which I think received a windfall here simply by being the only remaining game in town for those partners. But don't overestimate the value of those particular partners - those service vendors were 'riding' CPQ into some accounts, and are rarely proactive in recommending a hw vendor. As long as Dell is getting less than its 'fair share' in the markets these partners serve, they will be pulling Dell in, and at least for a while this will give Dell a way to do a full service offering and develop incremental sales in a key market. That advantage will diminish as Dell gets enterprise share equivalent to their mainstream share. EDS, Andersen et.al. just don't seem to leverage a lot of hardware, they are pretty likely to recommend the flavor of the day since they have a vested interest in maintaining a vendor-neutral stance with customers.