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

To: kemble s. matter who wrote (66768)	9/22/1998 9:41:00 PM
From: Sonki	Respond to of 176387

tomorrow's IBD today.... who sez u can't have tomorrow's wallST today? have not had the time read it. .but fyi... Direct Whiz Dell Strives For Lock On Workstations Date: 9/23/98 Author: Michael Tarsala Dell Computer Corp. has already scored big points in the workstation market. Now the company is trying to tack on more. The company first sold workstations - high- powered desktop computers often used for complex engineering tasks - that run Microsoft Corp.'s Windows NT operating system in mid-'97. By the end of last year, Dell became the fourth-largest NT workstation company, judged by units shipped. Some market analysts claim Dell recently has climbed to No. 1 in NT workstation shipments, beating Hewlett- Packard Co., Compaq Computer Corp. and IBM Corp. Dell lags, though, in workstation revenue. Now Dell is planning to round out its product lineup and extend its lead. IBD spoke with Jeff Clarke, who heads Dell's workstation division, about planned product changes. IBD: What's the new game plan at Dell for workstations? Clarke: What you can look to us to do by year's end is broaden out the product line, adding entry-level workstations. Many companies in this space have chosen to address this space with uni- processor machines only. We will offer a dual processor (in one desktop machine), which will give us an advantage. IBD: Dell's workstation focus to date has been on mid- and high-level workstations only. Why would you want to sell lower-margin, entry-level machines? Clarke: That's where a number of our competitors have been successful. The low- end workstation business isn't a bad business to be in. It's not low- end PCs. One vendor that's been very successful in this area is Hewlett- Packard. A significant portion of their volume - about two-thirds - is in this entry-level space. The majority of our focus will be in driving demand to the high end. But you have customers today who want to buy a full range of products. And we're going to give them that choice from Dell. IBD: Is the new plan designed to take sales from Hewlett- Packard? Clarke: This isn't an HP direct attack. Other major competitors are also addressing this space as well - Compaq with their AP series and IBM with their E series of products. They introduced these products in the past 120 days or so. Compaq entered. IBM entered. Now we're coming. IBD: What's the significance of Dell selling low- end workstations? It already sells high-end PCs that can - for all practical purposes -serve as low-end workstations. Clarke: It all gets back to the application and what customers want to do. If you're a financial trader, there's a different service and support (plan) than the one for consumers. There's a dedicated number for all workstation customers with actual workstation engineers who know the application base supporting our product. And we certify and qualify workstation applications to make sure they work on our products. That's also very important. Consider you're the manager, and applications are qualified on one machine and not the other. Which one are you going to put in your environment? IBD: If service and support is so important in the workstation business, how can Dell be an expert in taking care of customers? The company has been selling workstations for little more than a year. Clarke: You need to take care of customers in the appropriate way. We've learned a lot from our server brethren and applied it to this business in a very short period of time. We've augmented that by hiring a number of workstation professionals from other companies to our team. I wouldn't comment on the number of people we've brought in. But we acquired the workstation knowledge base needed from past employees of Silicon Graphics (Inc.), Sun Microsystems (Inc.), Intergraph (Corp.) and IBM. These are both from the Unix and the NT side. IBD: Dell has put significant resources in its workstation and server operations. What are the growth goals for the so-called enterprise business? Clarke: The enterprise business, both servers and workstations, now represent about 12% of Dell's revenue. For seven consecutive quarters, we've had triple-digit growth rates in the enterprise business. Clearly, we want our enterprise business to be a greater part of our revenue stream. We can't say what our targets are. But it's fuel for the engine of Dell to continue to grow. IBD: Dell hasn't been a low-end competitor in anything before. Do you think Dell's direct model still holds an advantage in the competitive entry-level workstation market? Clarke: I'm quite confident we'll have a greater feature set at better price points. We've been able to undercut workstation prices of the competition by roughly 10% so far. That's where we're at today. IBD: Can you foresee any up-and-coming workstation makers that might challenge you? Clarke: Silicon Graphics is an interesting one to keep an eye on. Are they going to come up? I don't know. We're looking at them. (But) Dell, Compaq, IBM and HP are the leaders. It's as much as 85% market share among the four of us. There are opportunities in this market. Workstations are one of the fastest-growing segments in the (computer) industry.