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

To: rudedog who wrote (78481)	11/12/1998 9:10:00 AM
From: Mohan Marette	Read Replies (1) \| Respond to of 176387

Of Pigs,Fur coats and the size of the 'thing'. (small & Med business) Good morning Rude: Excellent observation but you have underestimated size of the small & medium-sized business' segment,it seems this market is quite large and growing.Now looking at the numbers and putting my bickering aside about DELL Vs CPQ,it looks as though the market is so huge not one vendor can possibly meet the demand.Thanks for brining the issue to the fore. We appreciate-ya. =============================================================== "According to Access Media International, small and medium-sized businesses spent about $62 billion on information technology in 1997, and that figure is expected to reach $120 billion by 2002." So what's the big deal? Some analysts said Compaq's strategy is meaningful, but it isn't like the company just turned on a switch and decided to sell direct. Robert Cihra, an analyst for ING Barings, said Compaq is just following through on what it's been talking about for years. "It's not like weren't offering anything direct," said Cihra. "They have a hybrid model." Analysts noted that Compaq has been selling direct to its largest customers for awhile just as Dell uses the channel to sell to the government and education markets. "There's plenty of evidence that the lines are blurring," said Pfeiffer. "We can mesh the two." One executive at a direct vendor disagreed. "A pig dressed in a fur coat is still a pig," said Joel Kocher, chairman and CEO of Micron. "Yes, I think Compaq got more competitive on price with the move, but they still have no affinity for nor understanding of the direct customer. zdnet.com

To: rudedog who wrote (78481)	11/12/1998 9:13:00 AM
From: Lee	Read Replies (1) \| Respond to of 176387

Morning Rudy,..Re:..The small-medium business market is a very large segment, something on the order of $35B, which has low penetration in comparison to the larger corporate market. Thanks for the explanation of VARs. I admit that I haven't given this business segment much thought as I assumed that eventually, they would go the way of the dinosaurs since the margins were so thin. However, there was a segment on TV last night which showed what these small VARs do and why they are being somewhat successful. This was helpful as far as understanding but it's hard to make the leap that this could be a long term profitable business. For one thing, they apparently get their fees from the fact that they charge a little more for the hand-holding aspect including troubleshooting and setup. They would have to get more here as the report stated that their margins on the PCs were 8%. At only 4 or 5 units per week, they really have to have other income. Additionally, it was mentioned that MSFT estimates that as many as 50% of these units contain illegal software. Now, even if this market is $35 billion annually, what would be the cost to CPQ or anyone else to provide technical support? Maybe Dell is not being arrogant by dismissing this market but rather realistic? I don't know the answer here but when you think of having to supply some 200k individual businesses with parts and technical support, it looks like a logistics nightmare, especially where warranty issues are concerned. Again thanks for the insights Lee