There are a number of ways to look at this but the most important appears to be the life cycle of the process. Dell once had an advantage, now the way that they used to do things is commoditised. This article also points the way to valuation with the combination of PE ratio and what a regular discount factor implies for future earnings.
However, such hopes are not needed to build an investment case, because Dell’s shares are so cheap. Exclude the $6.5bn net cash pile and the interest income that it generates and Dell trades on just four times prospective earnings, according to Citigroup figures. Alternatively, to get a discounted cash flow valuation to the level implied by the current share price demands that investors assume operating margins decline to 2 per cent, from the 5 per cent expected this year, and that sales growth never returns. Struggling to run, the market is pricing Dell as if it has been put out to pasture.