First, a story:
Once, back in the early 1980's, IBM's regional staff took us to a fancy lunch to discuss the future of
personal-computer retailing. The market was exploding, driven by IBM's entry and the emergence of Compaq and other
high-quality Intel-standard competitors, and IBM had just entered retail computing with the Product Centers, very new
territory for them. They asked us what we thought they should do to maximize their market share. We said, "Use your size
to compete agressively on price. You can get around 15% more for a given configuration, but -- unlike the mainframe market
-- personal-computer buyers are driven by price more than brands and technology." "You're wrong", said the Regional Manager.
They'd done surveys, he said, showing how buyers would pay way more for the IBM tag. "Computers will never be comodities",
Well, the Product Centers closed up within a couple of years, and IBM recently sold off the last of their personal-computer
divisions. They announced they were no longer interested in competing in "commodity markets". It took them over twenty years
to recognize (or at least accept) the similarity between personal computers and televisions and toasters.
Televisions and toasters
And yet, a problem remains, and it's a problem for buyers of televisions and toasters as well: How can you make a price-driven
purchase and get service too? Of course, the answer is you can't. There's no free lunch or something-for-nothing.
You pay for service or you don't.
Part of the reason it took IBM over twenty years to smell the coffee is that they arrogantly underestimated the public's
intelligence and interest in educating themselves, in acquiring the necessary know-how. Big mistake.
But, another part was that IBM had always dealt with businesses
, and businesses use a different paradigm in evaluating
cost feasibility. Businesses ask themselves, Is it cost-effective
to acquire the skills and staff necessary to manage
our in-house computers? This is where we try to focus our customers.
- If you have or can assume the resources to monitor the industry and manage your own systems, then that's the
way to go. Buy quality equipment at the best price. Period.
- If you want to outsource those resources, budget that at both the time of purchase and as an on-going
Cost Of Doing Business. Find the most efficient way to obtain the services you will continue to need after you buy!
Some of our customers are in the first group, and we help them with consulting advice only. Others are in the second and
buy some of their hardware through us.
Note: Some computer equipment -- especially monitors and printers --
require little or no service or very specialized repairs (printers for example) and truly are commodities, and the
"Buy quality based on price" rule applies completely.
In all cases, we see helping our customers with computer hardware as only a part of supporting their overall system.
We are very happy to provide as much or as little as they want.
Please call us for our latest feelings on the continually changing market for personal-computer hardware.
Click here for more on hardware configurations.