Why Dell is a bank

A lot of computer companies are having difficulty competing with Dell because they think they're competing with a computer company. The truth of the matter is they are competing with a bank. Let me explain.

First you have Dell Computer here, who is in the middle and they have a bunch of companies that supply them with products, so around here would be a company that makes hard drives like Quantum or maybe somebody like Intel that makes processors, or different companies that make power supplies, all the parts that go into the computer. Now when you call on the telephone, here's your little telephone and you call into Dell and you say, "I would like to have a nice little desktop computer." They take these parts that have just arrived, just moments before you made that phone call and they assemble it in a computer and they ship it back to you and here's this nice little box with Dell on it. It's got that sideways, eeh, I can't really produce it here, but you get this box as it turns out. All of these parts that went into that box, Dell doesn't have to pay for those parts for at least like another 30 days. Meanwhile, they already have your money because you gave them your little credit card with that little security code on it and everything. They took your money already. This is why I call them the Bank of Dell. They're making so much money on the float that they don't have to worry about making a profit on the actual parts and all of the computers and everything.

Now if you are IBM or you are HP, here's IBM and HP, you have no way of competing with this model because you think you're competing with a computer company when indeed you're competing with a bank. Okay and it's very hard to compete with a bank when you are a computer company. IBM has nothing like this set up. Neither is HP. So what does IBM do? Well, IBM says, we're going to send our whole PC operation over to China and what's left is they make a bunch of servers. Now if they ask me, HP is not far behind. Those guys are in a significant amount of stress. They just let go of their CEO, Carly Fiorina. They're going to have to figure out how to restructure the whole company to survive. What that means is they're probably going to send their PCs over somewhere, maybe to Singapore or India or somewhere else like that and then what's next? Well, Dell does all the same stuff with their servers too, so pretty soon we'll push the servers over to China for IBM and servers for HP over to Singapore and next thing, you know, we got one big massive computer company. I'm sorry it's a bank in the United States and we call it Dell Computer.