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

To: Lee who wrote (74140)	10/24/1998 10:53:00 AM
From: rudedog	Read Replies (4) \| Respond to of 176387

Lee - CPQ and Dell will react to the current shifts in the PC market in very different ways. Gerstner's remarks are an indicator of a fundamental realignment of the major players. Intel is moving to alliance with IBM and Sun around 64 bit and non-MSFT technologies as a way of expanding their base and moving into the enterprise, after cementing the deal with HP around merced development. This strategy implies 'enterprise java' or something like it as a direction. CPQ has evidently moved closer to MSFT both in technology development and market strategy. The implication is 'WinPaq' vs. 'SunTel' (or whatever you would call a coalition of non-MSFT technologists). MSFT refers to this camp as 'NOISE' which is short for Netscape, Oracle, IBM, Sun, and Everybody else... The CPQ/MSFT axis is aimed at the enterprise business of IBM and Sun, with HP playing both sides of the field. The goal IMHO will be to pressure those players with increasingly competitive 'broad-based' enterprise offerings including complete services offerings. The recent analyst briefings from the two companies seem to indicate that MSFT will endorse a strong interoperability play embracing CPQ's high end offerings (Tandem Himalaya and high end Alpha systems) which can challenge the best that IBM and Sun can offer today, while gradually infiltrating that customer base with NT over time. Ballmer's recent remarks reflect strong support for that message also - MSFT has backed off considerably on their NT5 rhetoric and now is talking about several more generations before core products from MSFT can do the whole job, while beginning to play up the interop story. Dell benefits as the logical inheritor of the dominant 'mainstream' position. While CPQ and MSFT play the long game and seed the ground for expansion in '99 and '00 with a strong play in '01 and '02, they reduce the ability of IBM and HP to maintain share in the PC desktop space. Dell clearly has the advantage in filling that need. So Dell only needs to continue to execute strongly with their current model to get the largest share of the market ceded by IBM and HP, while incidentally picking up a big chunk of the 'white box' business as well. Dell's real challenge is building a plan for late '00 as the current shift draws to conclusion. In the meantime they have clear running room.