Goldman Sachs Conference: Dell Sees a Future in Broadband

Wall Street, take note: Michael Dell, one of the five richest men in the world, has seen the future, and it's broadband communications. That is the message the chief executive of Dell (DELL Quote) delivered in his keynote address Tuesday morning at the Goldman Sachs Technology Investment Symposium to an overflowing crowd of money managers, Goldman clients and some very loyal fund managers.

Dell said that he expects the high-bandwidth market to grow into a $2 billion one in the U.S. alone by 2000. Diplomatically, he sees Dell working with both @Home (ATHM Quote) and other cable-related entities. Look for Dell to sell high-bandwidth options to its corporate customers as add-ons to its hardware products, which now include not just PCs, but servers, workstations and storage devices.

Dell is making a big bet on broadband and storage: "Our customers don't think they can get by anymore on the True Blue solution," Dell said, referring to IBM (IBM Quote), best known as Big Blue. "We are the new thing."

"They are such forward thinkers -- it's exciting and impressive," said James Ross, a portfolio manager with Campbell Cowperthwait who has Dell as a top-five holding. Ross, who runs the (UMLGX Quote)Excelsior Large Cap Growth fund, up 67% last year, added that "broadband is clearly where things are going, and Dell will help its large corporate accounts into this."

Dell just registered Dellauction.com as a domain name, which may lead investors to believe it will become another possible auction site like eBay (EBAY Quote). But Dell said he only sees his company selling PCs and PC-related products. "I don't think that means we want to get into Furbies and Ginzu knives or anything," he said, which got a big round of guffaws from the crowd.

Dell also stressed the company's continued desire to sell even its highest-end products online. "By the year 2000, we see us selling half of our revenue online," he says. Analysts estimate Dell will report $33 billion in revenue in 2000, so that means the Austin, Texas-based outfit will need to sell $16.5 billion online. By the third quarter of 1999, Dell expects to sell $800 million a quarter online, or $3.2 billion annually -- impressive, but still well off goals set for next year.

Dell reports fiscal fourth-quarter earnings next week, but since the company is in a quiet period, Dell himself was not able to provide guidance to attendees. But he did see more portal partnerships in the future even though the company recently signed a deal with Excite (XCIT Quote).

-- Eric Moskowitz

RealNetworks Uses the Force

Internet video company RealNetworks (RNWK Quote) resorted to alien powers to impress money managers and perhaps ward off the powers of the Redmond software giant, Microsoft (MSFT Quote). Presenting his view of the rapid developments in Internet technology, the company's chief executive, Rob Glaser, wowed the attendees with a high-speed demonstration of the latest installment of Star Wars saga, The Phantom Menace.

RealNetworks, whose video technology was used to transmit the Victoria's Secret fashion show live last week, is facing off the challenge of Microsoft's competing NetShow. As a former alumni of Microsoft, Glaser certainly has done his homework. "Ubiquity," is his weapon to see off rivals. This is how Microsoft overwhelmed Netscape (NSCP Quote).

-- George Mannes