DELL is entering a new space with the acquisition of EqualLogic.  I see the acquisition of growth in this very important space as very positive.  What more, I like the acquisition using cash instead of shares.  I my view, DELL's shares are under appreciated and under valued and to use shares to finance acquisitions is negative.

In EqualLogic DELL has an amazing opportunity to accelerate growth & margins.  We believe any dilution can be offset through share buybacks and while a dilution of 2 to 5 cents may well be expected based on where EqualLogic is today, I do not believe dilution to this extent will occur because of the growth and margin potential embedded in EqualLogic.

I fail to understand DELL valuations.  Deployment of cash in say $3 billion in sharebuybacks will limit dilution from acquisitions.  The residual $12 billion if deployed for growth (organic & acquired) has a value of $48 billion using a very high benchmark 25% discount rate - are you telling me that the rest of DELL is worth $5.5 billion.  Just the ongoing very secure annual earnings of  $2.9 billion using a harsh discount factor of 15% (given the low risk because at an EPS of $1.3 there is little risk) is worth over $19 billion.  So really $67 billion (near $30) is a pessimistic valuation; with plenty of upside from successful future execution which will lower risk & result in higher valuations.

With DELL's earnings I can see opportunities from growth being created through refocus on new growth markets. I actually viewed the lack of growth in desktop as positive; desktops are yesterdays story, notebooks are tomorrows story & it would appear that mobility is where DELL's focus is.

 The way I look at it DELL has good science, it has a re-energised and re-newed management, it has a sound plan.  There is huge future potential with minimal risk (real only negative market sentiment and investors sulk).  What is lacking is DELL's expression of confidence.  I do not mean abrasive dismissive overconfidence, just the confidence in the management's ability to achieve what are very conservative benchmarks/targets.  And this is worrying; I have the confidence in the management, why do they not have confidence in themselves - confidence is perhaps one of the most important ingradient of success.  No doubt bumps can be expected along the way, but even with a degree of failure, the valuations are low; market perceptions of risk are higher than is justified and this is likely because of a management failure to express conservative confidence.

EqualLogic will not dilute EPS.  2 to 5 c dilution from amortization will be totally offset by growth in storage, particularly when growth is ignited through the Dell franchise.

Buyback at $10 b is incremental positive; additional growth can be financed from incremental cash flows running at $1 b/qtr.  Share trades below intrinsic value & is a great use of cash (mine included!).

The lack of guidance & highlighting bumps along the way is not a lack of confidence.  It is cautious conservatism coming from lessons learned from ecent regulatory issues.

Strengthening new consumer products, small business platform, growth in emerging markets are all great ideas. Would like to see the supply chain expertise come back; your business buyers love the ability to eliminate down time because of the supply chains ability to deliver within very short time frames.  2008 is important, Vista upgrade cycle has started which provides an opportunity for all existing business segments; it is an opportunity which needs to be taken.