Sunday, April 22, 2012


What does Dell even do now?  Their supply chain competitive advantage no longer exists in any significant capacity and their hardware offerings have either been boring or a complete failure, especially in the mobile arena where growth has been most prominent.  The margins in desktops and laptops are now dismally low and prices will continue to fall.   I'm not sure their attempt to move into the services arena by acquiring companies has done them much good.  Their stock price has gone nowhere and I can't see it going anywhere in the near future.

Dell is one of the largest employers in the Austin area and everyone knows someone who works at Dell, has worked at Dell, or is Michael Dell.  Some have quite a lot of money because they joined the company when it was in its infancy.

But what the hell do Dell employees do?  I know a lot of them and as far as I can tell none of them actually create much value at all.  Everyone works in "customer service", "marketing", and "communications" and as far as I can tell Dell stinks in all these areas.  When they invited me to see what they actually did at work, I was flabbergasted because they did...nothing!.  Besides, their offices are so damn drab.  And for some reason, if anyone needs a job, and that anyone knows someone who has a modicum of decision making power, then that anyone is HIRED.  I have seen this many times and it confuses me because from my point of view it amounts to crony make work, which can't be good for the shareholders.  There aren't many engineers creating value at Dell.

Dell can't create value or transfer it effectively.  Is it time to short?

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