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

To: Lizzie Tudor who wrote (67738)	9/26/1998 8:14:00 PM
From: rudedog	Read Replies (2) \| Respond to of 176387

Michelle - I think you are missing the momentum that Dell has to gain the dbms apps biz in the future I agree with you a hundred percent here. I'm not missing this - on the contrary, I think that the model Dell built to service the corporate desktop market is ideally suited for the future distributed application server business, and they will do very well there. CPQ basically created that market, and pushed the capability of Intel-based servers when no one else was doing it. That is what built the huge growth of CPQ's business in 1993-95. Just as in the desktop world, where CPQ initially took the crown by developing technical solutions that made corporate acceptance of standardized desktops easier. CPQ built the market, but Dell did a much better job in understanding what was really driving customer acceptance, and what the remaining challenges were in improving customer satisfaction. Then they used the unique strengths of their model to fashion a business practice which just did the job better. And they didn't stand still. They have continually raised the bar by creating innovative delivery systems, customer information and cost management structures, and increasingly 'personal' systems which none the less don't involve a huge Dell staff. And they concentrated on operational excellence in each phase of this program. Customers notice. Compaq invented the term 'fast follower' to describe their strategy against IBM. They did it so well that they eventually blew past IBM. But now they are the undisputed leader in the PC space, and Dell is the 'fast follower' pulling up in their rear-view mirror. Dell looks like the class act in the desktop space, in the low end server space, and, if they pull together their current strategy, in the midrange enterprise market as well. Success like this in a category builds its own challenges. Of course it invites more serious competitive pressure from the others in that space, but Dell is well poised to handle that. The more serious problem is that growth within each category becomes increasingly difficult as share increases, and virtually impossible once you dominate the category. Dell has succeeded by extending the strengths of their business practice and culture into related areas, and by perfecting their performance in every category where they are a player. But it is too simple to say they can succeed where they want. It would be more correct to say they move into markets where they can succeed. I (and others on the thread) are suggesting that to continue its current growth, Dell will need to either change its business model by introducing higher fixed cost operations like services and engineering, or by changing its image as a company by extending its real strengths into new business or product areas. My discussions with Drew and others are advancing my reasons why I don't think the first is very likely. Many here would like to see Dell 'take on' CPQ, HP and IBM and 'kick butt'. Creating success is not a football game. It doesn't matter if Dell beats those guys, especially if that would mean a slowdown in their growth and a related drop in stock price. And I don't think Dell senior management spends a lot of time on that particular topic. The second course is much more likely. But the discussions here on the thread are not nearly far enough out of the box to encompass the kinds of things Dell could do, and must do if they are to maintain their growth. However, the signs of what such a course would amount to are starting to emerge in Dell's public positioning. Having said all of that, Dell must execute perfectly on their current business, and that includes the midrange push you are talking about as well as continued building of their current strengths. I have every confidence that Dell will succeed in that effort.