Here is an Interesting Article on how DELL is THRIVING in the workstation market. Mohan, thanks for your great updates from the Comerica Economic Forum and the breakfast with Michael Dell. It only motivated me to go out and buy more of this wonderful stock. DELL is a leader in their core market and in new markets that they choose to enter. The article below highlights why I feel DELL is becoming "the Lexus of hardware firms" -- it's better by design. DELL can apply its business model to multiple markets very quickly and very successfully. Check out the last paragraph of the enclosed article.
-Scott
------------------------------------------------------------------
Computer Reseller News
September 14, 1998, Issue: 807
Dell beats Compaq in workstations
by: Joe Wilcox
Round Rock, Texas -- Dell Computer Corp. took the coveted second-place position in workstation unit sales for the second quarter from rival Compaq Computer Corp., which dropped to fourth place, according to Dataquest.
Dell, based here, had a 16.2 percent share out of 188,543 Windows NT workstations shipped, followed by Armonk, N.Y.-based IBM Corp. with 13.8 percent, then Houston-based Compaq with 10.6 percent.
Hewlett-Packard Co., Palo Alto, Calif., continued to dominate with a 46.5 percent share, Dataquest said.
"They're doing all the right things in terms of relationships, and they've been able to take advantage of the manufacturing setup to be very quick to market with products based on the latest Intel [Corp.] processors," said Peter Ffoulkes, principal analyst at Dataquest, San Jose, Calif.
Dell currently is the only vendor shipping a Xeon model, the Workstation 610.
"Time-to-volume for Dell is one of our success factors," said David Altounian, Dell's director of workstation marketing. "The advantage we bring to the marketplace is the ability to deliver the latest and greatest technologies on these platforms faster than our competition."
Jay Moore, analyst at the Aberdeen Group, Boston, predicted Dell will be a sales leader for the next three quarters and has a six-month period to exploit its strength as HP sorts out its business model and Compaq brings together its Intel- and Alpha-based workstation lines and infrastructure.
Serious Threat?
Channel companies, especially weather-beaten Compaq, take the Dell threat seriously. But Compaq, which has no imminent aggressive channel counterstrike, believes Dell's direct model is fundamentally flawed when selling workstations to the enterprise.
"The people who are buying Xeon workstations are not necessarily buying on the Web," said Dave Parsons, Compaq's director of workstation marketing for North America.
But Parsons also conceded the workstation market is in transition and many customers are demanding low-cost systems with the latest technology configured to their needs.
Executives at HP, which controls nearly half of the market, do not see Dell closing the gap anytime soon. But HP takes the threat from Dell so seriously that it is copying some aspects of the Dell model.
"What has HP learned from Dell?" asked Dave Dupont, HP's worldwide product manager for Kayak PC workstations. "The name of the game is significantly execution, execution, execution. You can't come out late with products, and you can't not meet the price points."
Compaq's decline has been attributed to getting new products to market late, with bloated inventory and trouble rolling out a new proprietary architecture being key problems.
Analysts predicted HP's lead would at least ebb as competitors enter the market with new low-cost, mostly single-processor workstations. HP ships between 50,000 and 60,000 single-processor Kayak XA workstations per quarter, Ffoulkes said. That translates to about 65 percent of HP's workstation sales for the second quarter.
Dell also plans to enter the low-cost-workstation market space, but with a low-cost dual-processor-capable system targeted at single-processor workstations, analysts said.
"If you were a technical end user one year ago and someone told you one year from now Dell was going to be the sales leader or No. 2, you would have chuckled," Moore said. "Next year at this time you'll find that, more and more, Dell's name gets into every single bid for a workstation buy."
Copyright r 1998 CMP Media Inc. |
