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SubjectRe: Minutes from Feb 21 LSE Call
On Sat, Feb 22, 2003 at 11:42:55AM -0800, Martin J. Bligh wrote:
> >> Dell makes money on many things other than thin-margin PCs. And lo'
> >
> > Dell's revenue is 53/29/18% desktop/notebook/server;
> > 80% of US sales are to businesses. their annual report doesn't
> > break out service revenue.
>
> Interesting. Given the profit margins involved, I bet they still
> make more money on servers than desktops and notebooks combined
> (the annual report doesn't seem to list that). And that's before
> you take account of the "linux weighting" on top of that ...

Err, here's a news flash. Dell has just one server with more than
4 CPUS and it tops out at 8. Everything else is clusters. And they
call any machine that doesn't have a head a server, they have servers
starting $299. Yeah, that's right, $299.

http://www.dell.com/us/en/bsd/products/series_pedge_servers.htm

How much do you want to bet that more than 95% of their server revenue
comes from 4CPU or less boxes? I wouldn't be surprised if it is more
like 99.5%. And you can configure yourself a pretty nice quad xeon box
for $25K. Yeah, there is some profit in there but nowhere near the huge
margins you are counting on to make your case.
--
---
Larry McVoy lm at bitmover.com http://www.bitmover.com/lm
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