Poll: Do pureplay hardware vendors have future?

Do pureplay hardware vendors like Dell, HPE have future?

  • Yes
  • No
  • May be but they will be a low margin business

0 voters

I put maybe because they have a low growth future. IMO.

Wayne

Does AAPL count?

I chose the 3rd option. But I suspect that HPE and Dell will both position themselves to grow their higher margin services business in the future (much like IBM did) - and gradually become less dependent hardware.

…Marc

I chose the 3rd option. But I suspect that HPE and Dell will both position themselves to grow their higher margin services business in the future (much like IBM did)

HPE had spun its services business (what used to be called enterprise services) and merged with erstwhile CSC and formed a new services focused company called DXC Technology. For HPE going forward, services will be more focused on installation, support of their HW business.

For Dell, the hosting part of the services is not big compared to their other divisions.

Services business margins will be better but the revenue will be declining due to cloud migration. The cloud model reduces the number of tasks performed manually and increases automation component and at some point, all the companies are going to be pass on the productivity improvements to the customer because new players like Azure, AWS will start from the base of passing on those benefits.

Coming back to the HW, I see most people view low margin with low growth. Right now, dell is not listed and the only option is HPE. So a somewhat low margin, low growth business has a place in the portfolio?

or differently stated, what kind of multiples you will be willing to buy?