Brave Tech World

August 20, 2006

SUN 20 AUG 2006

How to screw up in 8 easy step... by Dell. By Marcelo

    Over the past 8 years, I've bought many many Dell computers for me and my family. I also bought Dell servers and computers for my business (www.sampa.com).
    But the change over the last 2 years has been dramatic (anything to do w/ Michael Dell stepping out of the CEO role? Dunno.)
    Here is my list of 7 things Dell did that put them into trouble (and made HP look like a well-oiled money machine):

1) Support
    They had it coming. They think they could cut their support cost by 4X without any consequence. Did you ever call Dell recently? My last conversation not only I was treated as an idiot, but at one point I thought I was talking to a speach recognition system since the guy (from India, of course) kept repeating the same things over and over again.

2) Spam
    It used to be that I'd receive one email a month or so with some promotions. That didn't bother me. But now I receive about 2 emails per week on average. Some don't even look like they are coming from Dell, but they are certainly bringing revenue to Dell, so they must be responsible for it.

3) Pre-installed software
    First thing you should do when you buy a Dell: reformat the hard disk! That is the only way to get all the crappy software out of there. Before it would come with some Multimedia and anti-virus software, and that was cool, but now it comes with software that doesn't let you forget to buy the full version of Quicken every other week. How nice of them to add a reminder to the boot of Windows?
    And some other 30 useless crappy default changes. Dell, do you really think that when I open the Search Pane on IE I want to use Dell's Search Engine?

4) Insane Price Strategy
    Here is Dell's secret to hook you: Sell the base unit for very little money and make money on memory and HD upgrades. Before, Dell was more expensive then HP, Compaq, IBM, etc., but you'd be getting a premium hardware as well. Now, Dell is pretty much the same as everybody else, but they think they can use some Game Console strategy for pricing. Turns out that I can't buy a full system from Dell without feeling cheated. $200 for 1GB of RAM, $200 for a 160GB HD, etc. Heck, I buy a Dell for $500, add all the extras for $500 and just saved $800 from their site.

5) Exploding batteries
    Denial won't get you anywhere. Toshiba survived some bad times with their laptops as well, and they've got pretty bad PR back them. Why didn't Dell look a history to learn something?

6) Personal vs. Business (small vs. medium-sized)
    If any business is not buying Dimensions (instead of OptiPlex) it's loosing money. Their business line offers less than their personal line and costs more. Did Dell hire somebody from the aviation industry to teach them how to set price? Not only that, but they have server offerings that have such disparate prices. For example, an entry-level server on Dell might cost you $400, while the next level you'll need to pay around $2000. I assume they create this huge gap to force people to buy the more expensive ones, but again... that feeling of being cheated.
   True story: one time I've bought 4 servers from Dell for about $4000. The next day I've got a call from a sales rep telling me that I've bought the wrong servers since that line was too entry-level and not reliable enough. Really? The Pentium 4 is different? The HD is different? Thanks, but no thanks.

7) Dude, you're getting a Dell.
    Ok, maybe the "Dude" was not the coolest kid on the block, according to a teenager, but he sounded pretty cool for the teenager's parents. Dell had a pretty good marketing campaign, and had a very decent brand strategy: "Don't buy a PC, buy a Dell". I'm sure that it worked, since Dell grew steadily during that period, despite the fact it was during the low cycle of the tech industry.
    Now, quick, can you remember the last Dell commercial that you saw?

8) Promo, promo, promo.
    I can't buy a Dell anymore without thinking that I'm being duped. Is the price going to drop next week? Will I get double the RAM for free? Or a free upgrade to a flat panel? Has Dell become the Macy's of the PC world?
    I'm sure the have same SAP software that computes the optimum price and promotion for that week, but are they considering the long term consequences of this strategy?

   
    Dell needs a lot of fixing. It might take a few years after they start making some pretty deep changes for it to take effect. For now, I'll be looking into some HP Servers and some Lenovo or Toshiba Laptops.