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To: WebDrone who wrote (4773)	3/8/1999 12:42:00 PM
From: Harry Landsiedel	Respond to of 8218

WebDrone. Re: "If the partnership works right, it is Compaq who is going to suffer." That is my concern. As a cpq shareholder, the playing field gets leveled a bit. I also think HP and the weaker players will get hurt. On the plus side for IBM, they are maximizing shareholder value by building on their strengths (at least in the short term). Clearly IBM does not add as much value in the desktop arena as in notebooks as you rightly point out. I noticed no deal on services. Why do you think that was? HL

To: WebDrone who wrote (4773)	3/8/1999 2:59:00 PM
From: Arrow Hd.	Read Replies (2) \| Respond to of 8218

Where can IBM rule? They call these PCs "IBM compatibles" for a reason. IBM owns the architecture, its patents and copyrights in most of the technology that goes into these machines no matter whose label is on the PC from manufacturing parts to maintenance parts to sub-assemblies and so on. IBM makes over a billion dollars a year in licensing this intellectual property and billions more in OEMing the hard product. Who gets hurt here is the other OEMs. Look at a DELL assembly operation, which is basically what DELL is, and you will see that assembly facility surrounded by facilities owned by Seagate, Western Digital, memory companies and the like. I had a Seagate product manager in their OEM business explain to me how it works. Dell gets an order over the Internet, bursts a bill of material, calls the Seagate facility among others, and has the disk commodity shipped over to the DELL facility. DELL takes the commodities and builds the PC holding title to all of it for no more than a short while. Once shipped which is within a day or two title transfers to the purchaser. Very efficient model and one that IBM would like to emulate. So there will be more to follow we can almost be assured of that. IBM will duplicate the OEM piece with others. IBM sells at the commodity level to most of them already but now it is a more complicated alliance with the services piece which is critical if you want to be world-wide and in the Enterprise space. Anyway, in my view it is the other OEMs whose ox is gored here.