The Street.Com On Dell: 'Who Cares?'

I admit, it's not something I ever thought I'd be doing. But I have to write a post to compliment The Street.com.

Finally, someone there said something with which I can strongly identify. Not that I ever expected it from staffers at firm, founded by Jim Cramer. But one of their number spoke truth to power last week on CNBC, boldly contending, about Dell's recent malaise and accounting troubles,

'who cares? it's an old tech has been,' or words to that effect.

When the CNBC on-air anchor/interviewer sputtered unbelievingly, and stated that many people have a lot of money in Dell, and it's a big company, the Street guy retorted something like,

'so is Xerox. How big is its market cap? Does anyone think it is a leading tech firm anymore?'

Very well put. Big does by no means equal important. Often, it simply means 'still bloated and primed to collapse like a souffle' when sufficient technological change finally sweeps away the last of its ancient underpinnings. Like Kodak. A victim of corporate senescence. Its best days of profitable growth are in the rear view mirror. Consistently superior returns, if they ever happened at Kodak, are a thing long past.

This is yet another example of Schumpeterian dynamics in action. Dell's model went out of fashion some years ago. The guy from the Street echoed my own analysis, noting that Dell hasn't been an outperformer in many years- nearly a decade. It's not just 'having a few bad years.' It's history, as an outperforming company. So are Xerox, Kodak, IBM, and Microsoft. Their earlier technological breakthroughs are now parts of the fabric of our current world, and no longer offer the potential for consistently profitable growth that distinguishes a consistently superior company in terms of total returns.

The truth is, companies, like athletes, slow with age, then die. Aging may be prolonged. Death may come by acquisition, dissolution, or bankruptcy. But it inevitably comes. In the meantime, watching some companies is like going to a baseball game and seeing the 'oldtimers' play between halves of a doubleheader. I guess somebody has to be CEO of Kodak, IBM and Xerox, but does anyone really care anymore? Personally, I can no longer name those people off the top of my head, as I can with Google.

The guy from The Street.com has it right. These firms may once have been fast-growing, leading tech icons. But now, they are just old, large, slow tech has-beens.