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Technology Stocks : EMC How high can it go? -- Ignore unavailable to you. Want to Upgrade?

To: Tony Viola who wrote (4620)	3/2/1999 12:34:00 PM
From: JRI	Respond to of 17183

Tony- Dell partners with Clarion on the storage units...I believe Microsoft also helped in developing the software, although I think Dell did develop a lot of the software in-house... While I agree with you that Dell spending a lot less in R&D than traditional tech companies, they are surprising effective with their partnerships and surfing off others technologies (fast-followers)..Dell has never tried to be the technology leader..that is not their game....they take the easy money by leveraging their superior manufacturing model, and sticking to niches they can win.. Another quick point, on a total dollar basis...Dell compares more favorably...last year, Dell spent around $400 million dollars on R&D....EMC about $850m....given Dell will grow revenues at 40% the next couple years (on a current run rate of $20billion revenues) well, you get the idea...if Dell starts to increase the % of sales spent on R&D...well, that could accerlerate things certainly.. However, I don't imagine that in the next couple years that Dell will go a different route than in the past....ie. I expect that Dell will continue to attack the areas of storage which best lend itself to commodization (low, middle end), and pick off % points of share from the elephants (EMC, CPQ, IBM) while not trying to get into a mano-y-mano with the elephants......they will likely be successful (look at the amazing, fast success in workstations, servers, etc..in the last couple years)...I don't think EMC has to be too worried here...yet...