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

To: Mohan Marette who wrote (79889)	11/13/1998 1:10:00 PM
From: Uncle Frank	Read Replies (1) \| Respond to of 176387

I thought the Texas DellHead contingent might enjoy seeing how Dell's earnings report is viewed in Silicon Valley. Sorry if this repeats any earlier posts; I didn't have the time to search through all 5,327 items on the thread this morning <g>. Direct approach pays off for Dell BY DAN GILLMOR, Mercury News Technology Columnist IN a kinder, gentler era, imitation was the sincerest form of flattery. In the technology business, it's the sincerest form of combat. Dell Computer Corp. pioneered the direct-sales model for personal computers back in the 1980s, beginning when Michael Dell sold PCs out of his University of Texas dorm room, and perfected it in the 1990s. Now that his stock holdings dwarf the wealth of any Texas oilman in history -- and as his company blasted through yet another quarter Thursday of strong revenues and earnings -- other computer makers that once disdained the direct market are discovering its virtues. They won't find the direct-sales business as easy as it looks, because in most cases it's not part of their culture. And while Dell may be hard pressed to keep up the momentum that has made it Wall Street's oh-so-special sweetheart, it is pushing as hard as it can into the most direct medium of all: cyberspace. Earlier this week, Compaq Computer Corp. launched a widely publicized e-commerce Web site, part of its big push into direct sales. The company has made no bones about one motive: to combat Dell on its own turf while slowing Dell's powerful push into Compaq's bread-and-butter big-customer markets. Compaq claims confidence about its chances. It has some major strengths and industry clout. And it has taken on big challenges in the past. Consider how successfully Compaq went after the low end of the PC market a couple of years ago, when Packard Bell was riding high in the consumer-retail segment. Compaq moved handily ahead. As far as I can see, Dell has two things in common with Packard Bell: Both sell Intel-compatible PCs, and neither is especially innovative in its technology. The similarities end there. Dell doesn't aim at first-time buyers, for one thing. It consistently wins magazine surveys for the quality and reliability of its PCs, and its support is widely ranked among the industry's best. That isn't saying much, unfortunately, given the industry's track record; still, the surveys make Dell a paragon of virtue compared with Packard Bell and many others. But Dell's way of doing business has been enormously innovative. Selling directly to customers once seemed like a fine way to carve out a niche market -- customers who were computer-savvy and knew what they wanted -- but Dell realized better than anyone else what an advantage it enjoyed. For Dell, being direct isn't just a matter of taking orders on the phone or a Web site. It's an organic part of the operation, and becoming even more so with cyber-commerce. Direct sales tell you more about your customers than retail sales, because customers tell you -- not a middleman -- what they want in their products. They tell you what's wrong, and how you're doing, immediately. Dell is famous in the business for its strict inventory controls, and it's envied for its margins. Both are functions, to a large degree, of its way of doing business. The Internet is becoming Dell's best weapon, because it's such a natural extension of the direct-sales model. Remember the flurry, less than three years ago, when Dell announced it was selling $1 million per day online? Cybersales are now above $10 million each day, well over 10 percent of total sales, and the company says it'll be booking more than half of all orders on the Net within three years. Dell has a shot, because its customers are learning that the Net is an excellent venue -- and not just to order PCs. It may be fun as a consumer to play with the pull-down menus to configure a system precisely to your liking, but it's satisfying to be able to log onto a Web site and find the help you need to solve a problem after the sale. For a company that buys lots of PCs, ordering on the Web can save money and staff time, but linking the corporate help desk to Dell's support database is a huge boost. Over time, Dell is planning to take the direct-contact notion considerably further. It'll link customers' online feedback about quality and reliability directly with its suppliers' computer systems. If so-and-so's video-display adapter software conflicts with another company's software, or if a certain run of hard disks is failing unaccountably, everyone involved will learn quickly about the problem -- and presumably fix it faster. Wall Street took a whack out of Dell's stock price this week when Compaq launched its direct-sales campaign. That may have been a blessing for Dell. Its shares have been one of those momentum-investing plays, aloft at nosebleed altitudes and persistently rising. Investors are notoriously fickle when they see a potential flameout. But Dell executives seem worried these days mostly about which markets to target next -- which markets offer the greatest opportunity for the biggest profits -- rather than which rival is gaining on them. The reality, in recent years, is that Dell has done most of the gaining. This is one smart operation.

To: Mohan Marette who wrote (79889)	11/13/1998 9:49:00 PM
From: kemble s. matter	Read Replies (1) \| Respond to of 176387

Mohan, Hi!!! RE: Dell Computer Corp. Reiterated 'Accumulate' at Southwest Secs Bloomberg News November 13, 1998, 6:44 a.m. PT Princeton, New Jersey, Nov. 13 (Bloomberg Data) -- Dell Computer Corp. (DELL US) was reiterated ''accumulate'' by analyst Cody G. Acree at Southwest Securities, Inc. -- Donna McDonald in Princeton, New Jersey, (609)279-3731 Dell Computer Cut to 'Hold' at Wasserstein Perella Bloomberg News November 13, 1998, 7:25 a.m. PT Princeton, New Jersey, Nov. 13 (Bloomberg Data) -- Dell Computer Corp. (DELL US) was downgraded to ''hold'' from ''buy'' by analyst Stephen C. Dube at Wasserstein Perella Securities. -- Andrew Bekoff in Princeton, New Jersey, (609)279-3652 Do we really know that much more than what these guys do??? Best, kemble