Re: Minutes from Feb 21 LSE Call

Martin J. Bligh
2003-02-22T15:38:31Z

>> > Let's see, Dell has a $66B market cap, revenues of $8B/quarter and
>> > $500M/quarter in profit.
>>
>> While I understand these numbers are on the mark, there is a tertiary
>> issue to realize.
>>
>> Dell makes money on many things other than thin-margin PCs. And lo'
>> and behold one of those things is selling the larger Intel based
>> servers and support contracts to go along with that.
>
> I did some digging trying to find that ratio before I posted last night
> and couldn't. You obviously think that the servers are a significant
> part of their business. I'd be surprised at that, but that's cool,
> what are the numbers? PC's, monitors, disks, laptops, anything with less
> than 4 cpus is in the little bucket, so how much revenue does Dell generate
> on the 4 CPU and larger servers?

It's not a question of revenue, it's one of profit. Very few people buy
desktops for use with Linux, compared to those that buy them for Windows.
The profit on each PC is small, thus I still think a substantial proportion
of the profit made by hardware vendors by Linux is on servers rather than
desktop PCs. The numbers will be smaller for high end machines, but the
profit margins are much higher.

M.