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Motley Fool: Dell: Internet Bricklayer

Apr 07, 2000, 19:06 (2 Talkback[s])

"Dell has made rapid progress growing its server and storage business over the last year. Its already captured 25% of the U.S. server market, more than Hewlett-Packard (NYSE: HWP) and IBM (NYSE: IBM) combined, according to CEO Michael Dell. Roughly 15% of Dell's $25 billion in sales last year came from servers."

"But Dell won't use Compaq as a benchmark. Rather, it will have to compare itself to Sun Microsystems (Nasdaq: SUNW) , the go-go manufacturer of high-end server products. Sun has positioned itself as the dot-com infrastructure leader. "This is ground zero for Dell's business," Dell told analysts when speaking about the server market for small businesses. "If we don't win here we are not succeeding. Sun is the number one competitor to measure us against.""

"Dell said his company has two key advantages. First, lower-cost servers now have the functionality to compete against higher-end products. Second, Dell doesn't think Sun will fully support Linux, the open source software system. "My belief is that Sun will not embrace Linux, and this is a huge opportunity for us to move right into their space," Dell said."

Press Release