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To: Eggolas Moria who wrote (112024)	3/24/1999 11:08:00 PM
From: rudedog	Read Replies (1) \| Respond to of 176387

Gary - As I said I am not trying to bust your chops but to get the data right. If we generically substitute "Small RISC Machine" for PC than you are talking about exactly the displacement of VAX workstations by RISC Unix machines that I was describing. And Price/performance was only one selling point - the Unix machines also presented the "open systems" value proposition which was the real death blow. The reason that the overall margin appeared to erode was not a decline in minicomputer margins per se but rather a shift in product mix which introduced an increasing amount of lower-margin lines into the mix as DEC vainly tried to prove that Unix was a "tinker-toy" operating system and PCs were a "Fad" (both Ken Olsen quotes from the late 80's). But the fact remains that the first VAX 780 systems in 1982 were about 65% margin, and current VAX systems are about 62%, which is hardly a spectacular erosion. Your point on the macro-trend is well taken. A number of us have been looking at margin erosion in the mainstream DELL lines. This has been offset by higher-margin server and storage products. But it is short-sighted to ignore what is actually a quite rapid decline in desktop margins, since it places so much more weight on the success of DELL's enterprise play, which is far from assured.