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

To: JDN who wrote (4653)	3/4/1999 4:55:00 PM
From: SJS	Read Replies (1) \| Respond to of 17183

JDN, You took the words out of my mouth. I don't agree either. To a previous poster's concern, here more about the IBM/DELL deal. Nothing about Enterprise storage at all. _________________________ INTERNATIONAL BUSINESS MACHINES CORP. (IBM) 175 7/8 +9 1/8. In an effort to boost its top line and control costs, Big Blue announced a 7-year mega deal with Dell Computer (DELL 83 11/16 +2 3/4) this morning. The agreement calls for Dell to buy $16 billion worth of equipment from IBM and for both companies to jointly develop new computer technology. While the announcement is very promising for both companies, IBM seems to really benefit from the agreement. So far the deal appears to be very one-sided, with Dell receiving very little other than reliable access to a top supplier of computer software and components. Accordingly, shares of IBM popped at the open and have been able to maintain their upward momentum due to the implications for its bottom line, while shares of Dell are only modestly higher, in view of the size of the deal. While the announcement only briefly makes mention of the development of new products, utilizing the latest technology, it seems that this deal is strictly a component supply agreement, providing Dell with a reliable parts supplier. Nonetheless, the association with IBM should provide Dell with a broader sharing of technology possibilities that should keep Dell ahead of its competitors. Meanwhile, the deal is good for IBM because as noted before, the company has struggled to grow its sales line, commensurate with its earnings multiple. While the size of this deal represents less than 20% of IBM annual revenues, it is encouraging to see Big Blue striking out to make deals that can enhance its growth. Given the way the stock has traded today, shareholders appreciate it.