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Innovators vs Copiers: HP vs Dell
eaglemoon writes ""The days of engineering-led technology companies are coming to an end," Mr. Dell declared. The NY Times outlines a modern version of a classic innovation theory. Who gets to win in the marketplace - the innovators who invest in R&D like crazy or those that just take cost out of standard products? The current fight between Dell and HP over the printer business is a great natural experiment in verifying this theory." The article does a good job of stating what the real contest is - it's the different theories of corporate structure that's being tested.
Sure, there's something to be said for running a solid business around commodity products, even if they do cost a lot (compared to say, paper plates). It really is a good business to be in. The printer business, which the article focuses on, fits Dell's ideas pretty well.
But when I look for a new computer to buy, I look to Apple and I look at Dell. There's a big difference there.
Provided they can outlast the drain on their development dollars and recoup the investment. I think Iridium was a good test for that. The people that bought them out for 10 cents on the dollar are making a killing now.
"I went on a diet, swore off drinking and heavy eating. And in fourteen days, I had lost exactly two weeks. Joe E. Lewis
I'm sorry, but am I missing something here? There will always be Innovators and there will always be copiers. It really doesn't matter, since the two are in a mutal parasitic relationship. The innovators make some money when they come out with something new in a market that's flooded with clones, and the copiers make money by driving down the bottom line for their clones...
stuff
Ex-innovators. Under Carly HP is a shadow of its former self.
sulli
RTFJ.
Will the pace of improvements decrease as fewer companies are willing to invest in research and development? It seems to be the case for the last 4 years.
I need to get out of the house more often...
Thanks to file sharing, I purchase more CDs
Thanks to the RIAA, I buy them used...
Blah blah lamesness filter blah blah blah.
Prevent email address forgery. Publish SPF records for y
VCs will generally not invest in companies that don't own their own IP. I'm not saying they know everything, but, to paraphrase Vizzini "never bet against a VC when money is on the line".
The real question is, whose technology will Dell copy if Apple and HP fall apart?
Click here or a puppy gets stomped!
Dell innovating? That's unpossible!
I hadn't known there were so many idiots in the world until I started using the Internet -Stanislaw Lem
Boy do things change... well at least labels.
HP was always known for not jumping on latest technologies and only entering market once it is well established, improving on existing technologies. I mean these are the people who passed on original Apple designs and were still proud of it when Apple became successful. They were by far not the first ones to enter laser printer market. It was part of their philosophy.
Now they are the innovators. Curious times. But then again, if Microsoft can claim to be innovators, HP is way ahead of them there.
-Em
RelevantElephants: A Somatic WebComic...
Who gets to win in the marketplace? The Innovators who invest in R&D like crazy or those that just take cost out of standard products.
The innovation was in creating products that filled a formerly unidentified need. Those lovely early HP calculators are an example. The first reliable laser printers are an example. The personal computer is an example.
When each of these was being developed, the technology industry - heck the whole personal computer industry - was in its infancy, and just about anything with a semi-conductor as "innovative".
Those are now mature products, which is where companies like Dell appear. Their role is not to address needs that other companies haven't seen, but to build a business that exploits mature technology with identified market.
Innovation will come from left field, and will involved products or processes that few of us will see coming.
Three Squirrels
All I can say is "Thank God I've still got my LaserJet III." I'm sure that it will long outlive every POS printer that's being sold today, and I'm sure I'll always be able to find toner cartridges for it.
I hate to see HP forced into competition with a company like Dell. Dell is the Walmart of computer hardware, it's cheap, it probably works okay for a while, but but eventually it's gonna crap the bed and you'll have to buy a new one. HP stuff USED to last forever, but now they're starting to sell wally-peripherals as well. It all goes back to our disposeable culture. But some of us (like me) would much rather pay a little more for something that will last a lot longer, or even pay a little less for something that's already old but that will STILL last a lot longer (like my LJ III).
-73, de n1ywb
www.n1ywb.com
I know that the majority of us are strongly opposed to software patents, but where would HP be right now without patents?
Clearly the only incentive for HP to be "innovators" is to be able to market the product without competition for a period of time. How are we opposed to patents, but yet I'm sure most of us will go with HP on this issue, not Dell.
Does the issue have to do with the scope of software patents? And what will likely be the inability of patent offices to find "prior art"?
Haven't read the article but I don't personally consider HP an innovator anymore. When someone says HP, I think "sore sight for a once great American Company." Morale is supposidly in the toilet in the American shops. Maybe morale is better over in India.
HP's test equipment is nice, and HP printers are great. I actually liked Compaq's x86 servers, and hated Compaq's non-business desktops. Never liked HP desktops, never seen much in the way of HP servers outside of the HP-UX systems. Hockey-PUX is wacked, I'd prefer Solaris or IRIX.
Toss the Dell servers in the trash where they belong, give me a used Compaq server over a new Dell rackmount turd any day. I guess Dell desktops are okay, but you really get what you pay for.
I'm not quite sure why Dell is so popular. Poor Gateway, why are they failing when Dell manages to ship such low grade product and run such poor customer service. And where did Austin, Northgate and Swan go.
Southeastern Virginia REPRESENT!
Well, my money is on the company whose ink's price by volume is seven times the cost of a good Dom Perignon.
'Don't worry' said the trees when they saw the axe coming, 'The handle is one of us.'
Competing on price alone seems pretty risky to me. The minute someone else provides the same commodity for a lower price, you're out of business.
Failing this there is a natrual advantage to innovators in legal regimes that allow local embryonic development without legal hassle (inventors get to eat)!
And if you thought that was boring you obviously havn't read my Journal ;-)
Jim Morgan, who used to be the CEO of Applied Materials used to say there are three phases of competition: innovation, differentiation, and commoditization. AMAT wanted to win in the first phase and make do in the second and get out of the game in the third.
A company needs to pick which phase it will focus on in and stick to that. If HP wants to be an innovation company, they need to know when to bail out of a market with no innovation left (like printers).
The Innovators (HP) could always just raise the licensing prices to the copying companies (Dell).
Without companies like HP that can afford to dump large sums of money into innovation, the industry would be pretty stagnant.
That's exactly why patents exist...to promote innovation....and to protect the innovators from someone who could just take the technology the innovators worked so hard to develop, then mass-produce it for less (and without the R&D cost), effectivly putting the innovators out of business.
How could I say to men: "Speak louder, shout! For I am deaf!"? -Ludwig van Beethoven
No commodoties would *exist* as such, without some *invention*(*) first
Dell and MS are leeches, and as such they work. Now, without any hosts, leeches die.
"/Dread"
(*) I use the term loosely.
Sadly, I see Dell's quote as probably accurate. And, one of the things the patent system was supposed to help prevent. The innovators were supposed to be able to profit (for a time) from their efforts. Assuming bad business practices and/or poor financial handling, they should be able to stay in business. Even if they are not the market leaders - their technology would be, and they'd still be making revenue from the licensing.
It's the mentality of the Dell's that are hurting us. Innovation is required. Yet, to compete with the Dell's, innovation (and R&D) often suffer because R&D costs money. The companies that truly innovate, that really study and work hard with R&D, will have a harder time in our current greed-driven, shareholder value is the only goal mentality market place. Why? Because the R&D takes money from profits, making margins smaller. Therefore, the copycats (Dell) have better margins because the ride the coat tails of the innovator, without having the spend the money to innovate.
. 62,400 repetitions make one truth -- Brave New World, Aldous Huxley
One of the problems with a pure-manufacturing business model is that without R&D, you are dependent on your competitor's innovations to get out of the "valleys" when demand for current products slackens.
Dell is one of the last great US manufacturers -- everyone else has contracted everything out and become a drop-shipper.
If you look at the great manufacturing businesses of the past, you'll see that once demand starts to get quenched, the business dies. Dell has a need to push out huge amounts of product to make up for the deflationary PC industry... which is a strategy that will eventually catch up.
Conformity is the jailer of freedom and enemy of growth. -JFK
HP is not and has not been an engineering company for the past 10 years, and some would argue that I'm being generous.
I would think Dell being the distributor would be the better strategy over beging the inventor. If you look as MS as they have done, pay the royalties (if you have no choice), sell sell sell, profit and then build or buy the invention/technology. Simple.
How do you sell sell sell? Look at McDonald's strategy, "Would you like a printer with that Sir?", cross sell and bundling is the way to success. How to sell even more and profit? Sell Dell branded consumerables (eg cartridges, paper, cable peripherials).
I wouldn't be suprised if Dell at a later stage invents some other proprietary printing technology beside BJ/Laser (please don't reply and say 'Enhanced Dot Matrix'). Thank you.
"but where would HP be right now without patents?"
Same place as they are today.
Patent the printer, copyright the printer driver.
But patent the printer driver? Only someone not versed in the art of software development would say something so ridiculous. And I think I'm putting that very kindly.
Dell doesn't design its own printers! They're simply run-of-the-mill Lexmark units with a Dell logo. But here's the shady part. The Dell printers are modified so that only the special Dell cartridges fit. The Lexmark cartridges had the same pin configuration, but the Dell cartridge holders are shaped a bit differently. If the cheaper Lexmark (or generic) cart is modified a little bit, they work just fine.
I have a laser printer--but Canon seems to be the best deal in inkjets right now. Black carts for most of their printers are only like $7.
Over time, Dell contends it can drive down the cost of printing by 25 percent to 35 percent a page. Shave a third off the cost of a standard color inkjet cartridge for a home printer, now typically $29.95, and the price tag would fall to $19.95.
:(
If it's like their free double memory offer (as if 128Mb is enough to load the damn thing) then the Dell page is A5.
(Expires 26/05/2004)
However, one thing I noticed many years ago, when Dell first became known, was that they built their PC cases with simple one-screw-and-open panels pretty much by default. This was a stark constrast to the cases you'd get from any other PC maker. What a joy to be able to easily access the innards of the PC. I think a lot of companies make cases this way now. I'm not sure that Dell started it, but they were the first I'd seen do it and Compaq and HP definitely were *not* at that time ...
Thinking like this stagnates the industry. Copying existing technology is easy money, but don't forget that some aspects of PC design are nearly 25 years old. The market is ripe for something new...and the company that comes up with something other than a variation on a theme will make lots of money in the long run.
This is the same kind of thinking that has CIOs everywhere shipping jobs off to outsourcers; they figure one sysadmin is much like the other. Technically they are, but if you train your staff well, they learn much more about your core business than any outsourcer would.
Especially in tough times, it's tempting to cut R&D budgets. However, comapnies that abandon basic research do so at their own peril!
Dell has sold printers for a long time. As far as I can tell, they target buyers who like to buy everything through one web site. The peripherals they sell are nothing special, and the prices aren't that good, but it's easy and convenient to buy everything with one click.
People who want the best are usually willing to shop around for it. Hopefully HP won't be run out of business if Dell is successful in undermining their market, and the next time I want a good, dependable printer I won't have to buy a re-branded Lexmark or some other similar junk.
Am I part of the core demographic for Swedish Fish?
I work at a relatively small company (~120 users) and we're pretty much standardized on Dell equipment. Other than the laptops (which IME are a crapshoot servicewise no matter what company you go with - too many "vertical distance adjustment difficulties") we have had one service call to Dell in the entire time I've worked here, for a failed CPU fan.
Some of the machines are over three years old.
I'm impressed. I may not like Dell as a company, but as far as making a reliable product goes, they've done pretty well by me.
InThane
Is NOT a true first tier company, no matter how much money they paid Gartner to say they are...
Only IBM and HP qualify as such to me in the PC based server world...
We recently had to scramble to do a firmware fix for a customer who had bought Dell servers rather than the HP ones we recommended...
The fault? A bug in Dell's RAID card firmware that would cause the card to eventually destroy the data beyond repair... A bug of the type that would NEVER get out the door in a HP or IBM product... Then there was the server that had the power supply defect that smoked and died... Dell does not do anywhere NEAR the quality control HP or IBM does.
Dell appeals to those who buy strictly on price.
You get what you pay for.... HP ProLiant is by far my favorite server line, and it's not really that much more expensive than Dell.
Corporatism != Free Market
Why haven't they made an OS to compete with Microsoft. Oh, yeah, they're building PC's to someone elses standard.....and there was that UNIX thing......
"most analysts agree" that HP is the technology leader in inkjet printing?
Hogwash, HP hasn't been on top technology-wise since the mid-90's. Epson, ever since their initial Stylus Color line 10 years ago, has more or less led the inkjet field in the most demanding graphic arts output.
HP is strong in CAD and large format, corporate work and lasers, but any analyst who claims they are on top in inkjets under 20" wide has slept through about 6 generations of printing technology.
Dell can probably easily defeat HP in the home and office inkjet printer market, HP doesn't have anything special for those customers that any other manufacturer can't OEM to Dell for less.
When Dell beats Epson and Canon in a market that is more concerned about quality than price, this theory may hold water, but I can't imagine how they would do it.
Recursive: Adj. See Recursive.
Dell will have a tough time competing in the printer space because it does not have the proper distribution channel or the right business model for the way people use printers.
"If my daughter runs out of ink while doing a homework assignment, I need that ink cartridge right now. I can't wait 24 to 48 hours" for the cartridge to ship. That dynamic means we need to go to Office Depot...and buy the cartridge right away.
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There is a role for both innovators, and those who distribute the innovations. It doesn't say that Dell is a copier.. in fact, dell doesn't build their own stuff, they simply outsource that to the innovators.
The real question is if you can be both a distributor and an innovator and be successful.
"Dude, you're getting an HP"
- "My name is Legion, for we are many" -Mark 5:9
the printer/all-in-one market saturates?
In a given market, there are two ways to have power: either you own the product, or you own the customers. Depending on your industry's maturity and rate of innovation, the balance shifts between the two. If Dell can assemble products that compare with HP's just by using parts from HP's competitors, that means that HP is not innovating enough. Or maybe all major improvements have already been invented in the printer business.
Michael Dell says that his company is not a technology company, it's a logistics service provider. He's right, of course. Logistics become a key issue when products become commodities. Ironically, the frantic race to hardware performance only stresses the critical importance of the logistics.
It would be nice to be sure of anything the way some people are of everything.
Innovation is more than adding chips to your ink cartridges to make them less prune to copying. If the innovation does not carry any benefit for the user, the copiers take the field. R&D has often degraded much towards a buzz word generator for the marketing generator.
If you take a look at the car industry: Innovations are nowadays the optimizations of the sound the doors and hood make. They recently started optimizing the sound of cookies (no joke). Well if this is innovation, i take the copy.
Regards, Martin
Will Hewpaq resist the cancerous tumor that took down Digital?
Politicus
lol... thats the banner I have on the top of this page... lol ^^^
-Imidazole2
This has nothing to do with "theories of corporate structure" there is no need for such thing. Corporations are created and maintained solely to create wealth for their shareholders. This is the end of the story. This glossy fashion mag version of business in which theories contend is sheer fantasy. There is no theory other than screw the other guy and get to the top. This is true for HP, IBM any corporation you care to thinkg of. Bully your way to the top by any means is the only theory. HP intentionally stands in the way of technology as much, if not more than, many companies.
May 27, 2004: "Michael Dell announces that sleeping with underage gerbils is the only path to transformative strategic insights."
May 28, 2004: "Carly Fiorina declares death of gerbil-inspired strategy and outlines new meerkat-based inspiration management system."
Who needs the Enquirer?
Read the EFF's Fair Use FAQ
I want to support companies that innovate, so I generally buy Apple or IBM products. With HP being the leader in printer innovation, I bought a HP Color LaserJet 3500 and have been very happy with it.
There's a visceral reaction in my mind against Dell, simply because I don't want to buy from a company whose business model is simply copying other people's work. I find it, frankly, disgusting.
I want to make sure our industry continues innovating, because if it doesn't, we're all dead in the end. I know Dell makes a decent product, and it's cheap -- but the business model undermines the ideals of creativity and originality I value more than a couple of hundred bucks saved at the cash register.
D
Dell has done an excellent job of assembling a catalog. The problem is the only thing in their catalog that they have even a semblance of control over is their desktop PC line. The rest should be labeled Made for Dell by Ching Dai/Lucky Goldstar/Samsung/Take your pick. All the companies Dell buys from have absolutely zero scruples about selling to an office depot, a staples, EDS generic computers. On the PC side you can hit pricewatch and by the complete set of parts for a dell for considerably less than dell sells their PC for.
If you don't innovate you don't control your destiny, Other people do. In Dell's case, Micron, Microsoft, Intel, Maxtor and or Seagate could toss Dell onto the ashheap of history before you could say boo. Dell does little but package their products and put a sticker on them.
That being said a fair comparison between an innovator and a copier in the computer business would be Dell and IBM. Its pretty clear how innovation pays off big time for Big Blue. Its clear how copying is paying off now for Dell, Tommorow is another day.
They made the decision to make the printer as cheap as possible and instead make their money selling ink. It's a very similar strategy to Gillette's famous (almost) give away the razor and sell the blades strategy. However this really means HP is in the ink business moreso than the printer business. And ink is a commodity far more than cheap printers. And the printers aren't really highly differentiated either. HP printers are good but most of the time there are competing products that are technologically just as good. It might be the case that HP chased profits and marketshare but opened themselves to competition from Dell in the process.
If I were HP, I would be very concerned about my cost structure right now. Dell is a reseller of commodity products. Yes they do some R&D but realistically they mostly just manufacture and resell products developed elsewhere. In a battle of selling commodity products, Dell's cost structure is just better. Dell actually gets paid days before they have to pay for products and they have only a few days of inventory on hand at any time. HP does pretty well with commodity products but they are much more similar to IBM than to Dell with multiple divisions, heavy R&D, high end servers and support organizations. This isn't a bad thing necessarily but it does mean that they may eventually have to exit the low end printer business if it becomes any more commoditized much like IBM has had to move upmarket in PC and focus on business customers.
Fortunately for HP, they do have a great brand, strong R&D and a pretty substantial computer business of their own. HP is hardly defenseless. But if this becomes a pure cost battle, HP probably will lose. I think the most interesting part of this battle will be to see how much brand matters here.
I do sales for a big competator of dell
and from what ive seen hes right.. yes small medium sized buisness will go with Dell cause there cheaper
but when it comes time for service and support, cutting edge computing for their cad lab, video, ect.. ect.. and after their 3 years are over their fleeing the company in drove. dells good for the shortsighted IT manager.. IBM and others here for the long run total cost of ownership
The More Knowledge you have the Luckier you Get- J.R. Ewing
The HP/Compaq business-grade machines are light years ahead of that Dell trash. Better construction, better components, better design.
-Just my $.02.
Here /. effect
just in case of
One Can Never Own Enough Musical Instruments...
because the word "innovate" means to introduce changes and new ideas [emphasis mine]. Both HP and Dell are innovators.
What HP supposably does, or used to do, and Dell doesn't do, is invent, which means to design and/or create something which has never been made before .
Innovators will cease to exist if invention or discovery never happens, as there will not be any new idears or changes to introduce.
Mr Dell has made a common mistake, most people aren't aware of the difference between innovate and invent.
The Internet's nature is peer to peer - 20050301_cs_profs.pdf
HP stopped innovating in printers about 5 years ago (say 1998 or so) and since then has just been releasing variations that require new, propriatary toner cartridges every 18 months. Basically a razors/blades scam.
So, this contest doesn't mean what you think it means.
sPh
So I threw out my last POS inkjet printer years ago, and got a real laserprinter (HP LaserJet 4000TN) instead. The pinnacle of b&w printing. Fast. Stunning quality. Toner cartridges so large that one will last me around 10 years at my current rate of consumption.
And colour? If I want that, I put it on a floppy and get it printed at the photoshop down the street. 60c canadian (about 40c US) for a 4x6 printed on real kodak photo paper, by a real dye sublimation printer that costs as much as a fancy car.
...are also coming to an end, then. But not to worry, India and China will be happy to pick up where we left off.
Hopefully, we'll learn that companies started by pioneers and men of vision cannot ever be put under the responsibility of the dollar alone.
These places should be used to further science, and we can have a ring of commercialization projects in a tier under them.
The venture would be LED by Research and Development, and with the goal of advancing study.
I don't see why that isn't already a model? It appears obvious to me that the only real way towards growth is ALWAYS through innovation.
I don't know the meaning of the word 'don't' - J
They just don't invent anything.
The Internet's nature is peer to peer - 20050301_cs_profs.pdf
Not sure of the value of that... I really prefer my HP Laserjet IIIP and my old Laserjet II to just about ANY printer on the market today (for a B&W Laser Printer). Work horses over 10 years old and still going. And while I like the little 1210PSC I just bought. My Deskjet 540 is still also plugging away. Newer printers from Epson and Lexmark are in the trash heap as uneconomical to repair, and were too flimsy to hold up long. So there's a trade off there... I'd like to see HP reintroduce a "Classic Line" of products. Instead of innovating all the quality out of their line...
While the parent poster is modded as funny, he's absolutely correct.
A true innovator will carry on innovating. HP while being seen as the innovator, is now just as much a box shifter as Dell/Lexmark are. If anything, Dell are innovating here, but from a business angle, not a technology angle...
I think that goes in the category of "Sad but true".
This article also brings to mind the overlying business strategy of innovation versus copying. The former strategy has largely been the domain of stateside universities and companies, whereas the latter has been the province of east-Asian companies. Look at automotive design, the microchip, etc., to see various trends in R&D vs. distribution. Of course the U.S. is no longer the world's sole innovator, but that is due to companies like Dell.
This also brings to mind an historical speech between Nixon and Khrushchev:
"Well then we will say America has been in existence for 150 years and this is the level she has reached. We have existed not quite 42 years and in another seven years we will be on the same level as America. When we catch you up, in passing you by, we will wave to you." CNN.
If the USSR was high, it was because they stood on the shoulders of the Western World.
Interesting article....
First, http://www.parc.xerox.com/
Then, http://www.apple.com
Then, http://www.microsoft.com
Would you rather be the innovator or the copier? From a business perspective, I know which one I would want to be.
My first laptop was a Dell. It was cheap and great.
Then the CPU went, then the fan, then the warranty ran out. Then the keyboard went.
One day, Dell called me to ask what I tought about their products and services. It was a very short phone call.
there's no place like ~
Without the higher priced innovators; what will there be for Dell to copy?
As long as you don't slow down your rate of innovation by doing something stupid, like purchasing Compaq, you should be OK.
We buy probably 5 servers and 500 computers a year. When I first started this particular job, we bought IBM. Service was good but we had a high rate of failure on the hard drives, and there was a lot of proprietary stuff. Then we switched to Gateway. The hardware was great, but we didn't like the 8 month turnaround on hardware. During the Gateway phase, we bought HP Printers (Deskjet 890's to be exact). Out of the thousand or so we bought, maybe a dozen made it through their warranty period. And if you went more than a week without using your ink, you may as well put in a new cartridge because the other one is ruined. Then we started buying Dell. The Maxtor hard drives they supply tend to die more than we'd like, but we have a pre-imaged replacement the next day. I think out of the few thousand we've bought, we may have replaced a couple of motherboards as well. Top notch support for the corporate customer, which is where they make their money. Although I have to admit, we got a new rep a few months ago and he doesn't seem at all interested in helping us out. He gave us a price quote a few days ago that was higher than if we priced it on their website, and this was buying it in bulk of 500. I think we'll try building our own next.
Innovators Rule - Provided they can outlast the drain on their development dollars and recoup the investment. I think Iridium was a good test for that. The people that bought them out for 10 cents on the dollar are making a killing now.
I know this ain't the politically correct thing to say on /., but:
Without those legal protections, the intellectual property of innovators is essentially worthless.If you're talking laser printers, then you're correct - although I was under the impression it was licensed from Xerox, but if it's operating systems, you're way out.
Jobs had heard of the Xerox work and asked for his engineers to be shown round as part of a share deal. PARC did demos for lots of people, and doing one for Apple was nothing new. They didn't leave with rights, just a bunch of ideas. Jobs specifically couldn't understand "why aren't you doing anything with this? This is the greatest thing, this is revolutionary." (read Insanely Great by Steven Levy).
So Apple are equally guilty of copying technology as Microsoft, certainly the OS, the mouse, bitmapped displays... I could go on... but the irony is that where PARC were in the mid-70's - well you could pretty much accuse anything we have now of copying them, they were that far ahead.
If anyone can be accused of innovation, it's Xerox and PARC.
Dell pioneered just-in-time manufacturing -- they didn't ask for parts for your computer until they had your order in had. No inventory to store means no warehouse to pay for!
Wal-Mart innovates, too. There's a reason their IT department is one of the biggest in the world. They want to know what each store has on each shelf. Again, they're trying to minimize total cost.
The Slashdot crowd cares more for performance, but remember that there are many more customers who care about COST innovation.
Um, this list makes me rethink some of those plans I have to purchase Dell systems...
You can get free shipping from Dell if you order before Wednesday!
Then, if you come to the site on Thursday... you can get free shipping if you order before the following wednesday...
Dell has sales which perpetually appear to end- in order to exploit the consumer-only to be renewed immediately...
THEN ...
...
"Marketing is too important to be left to the marketing department.”
David Packard, Hewlett-Packard
NOW
The top layoff leader in terms of layoff numbers is Carly Fiorina at Hewlett Packard. She fired 25,700 workers in 2001, and saw her pay jump 231pc to USD4.1m.
Dell is just silkscreening their logo on some lexmark OEM printers. They aren't innovating because they're not in the printer business. They're a reseller with better branding than their supplier.
HP might be "Innovating" but they have to if they don't want Epson to steal their business. Epson's printers are phenomenal. If you print out a proof on an epson nowadays and take it to a print service, you'll often hear them say "I can't get that color". And services will make their own litho plates. That's the real competition. HP v Epson.
Dell is doing the same thing they've always done: throw a bunch of OEM things together and stamp a logo on it. Their offerings typically underperform the sum of their parts. You buy Dell, you get what you pay for.
The Motly Fool has some interesting comments on R&D. From the article:
"Still, not all companies are the same. Dell (Nasdaq: DELL) metes out only 2% of sales on R&D, but continues to keep investors very happy"
"However, patents don't necessarily translate into money-making products. Think of Xerox (NYSE: XRX). For years, the company's PARC research center developed one breakthrough technology after another, but failed to make money on them. Its inventions, like the laser printer and the mouse, are now in the hands of competitors."
This is not strictly true. (I was at Xerox PARC when they spun off SpectraDiode and still have my Alto manual)
Xerox had(has) MANY successful spinoffs, as well as many dismal failures. But thats another story.
Companies may do very well through acquisitions of technology in liu of R&D of their own.
Interesting study in Sweden:
"The study reported in this thesis describes and analyzes technology-related acquisitions and spin-offs. The basic idea is that an economic system where large and small firms interact through technology-related ownership changes is highly conducive to overall innovativeness and long-term growth, given certain conditions"
Cisco certainly is successful at acquiring technology through acquisition, though they do a lot of their own R&D also..
I could go on with lots more examples.
The question is whether Dells model will hold up in the long run.
So far they seem to be doing ok with their 'Business Partner' model. Only time will tell.
If we revamped the tax system so that long term R&D gave a better tax break we'd probably see more of it.
Personally I'd like to see better tax breaks for longer term investment (in R&D and other things) and similar tax breaks for long term profitability and the like in order to encourage the bean counter types to work in that direction.
Thinking about how this kind of thing interacts with patents and other IP issues just kind of makes my brain complain. Sigh.
Disclaimer: I've got an MBA ('m also a programemr).
Dell's quote is this: "The days of engineering-led technology companies are coming to an end."
It looks like the basic opinion on this here at /. has broken down into two camps:
Fact is, both of those are right. It is shortsighted; but within the short-run time frame -- and the business sphere HP and Dell are operating in right now -- he's exactly right. Hell, HP knows it, too -- that's why they're in trouble and know it.
As the article points out, there are two types of companies: innovators and copycats. In the short run, the copycats will always eat the innovator's lunch. Naturally. They've got lower start-up costs, lower R & D costs, lower overhead all around. Thus, they undercut the innovator's price and outsell them.
This trend is accelerated when quality becomes fairly consistent accross the board. That is, when the copycats are still ramping up, their quality is poor. Thus, in the old days you would hear, "Spend the money for the HP -- brand X is cheap but sucks." You don't usually hear that, anymore, regarding printers. Sucks for HP.
But here's the kicker: when the Next Big Thing comes around, who will it come from? Dell or HP? Yep, HP. Innovators will survive not by getting pulled in to a lowest-price mud-fight -- no, they'll survive by innovating their way out of trouble. In fifteen years, do you think HP or Dell still be here? My money's on HP. Dell's a great commodity company: pretty good boxes, cheap. So was Tandy, and where are they?
It's the same thing with IBM. IBM has been a leader in nearly every single office productivity market they've competed in for, what, like 50 years? Typewriters, word processors, servers, PC's, etc. Big Blue has out-lived nearly every competitor who was at one time undercutting their market. Why? Because they innovated into the next Era -- and the copycats got caught in a mass extinction.
It's evolution on a corporate scale, baby. Those that adapt to the changing market, survive. Those that don't, don't. HP and IBM change the marketplace. Dell just hangs on and hopes they don't change it too much.
So Mr. Dell's right, for now, and doomed, eventually.
AFAIK, printing mechanisms for majority of HP printers are made by Canon. I'm sorry, but HP is not an innovation company anymore, either. They've degraded to Dell level LONG time ago. They both basically make the same shit. Dell has slightly better desktops, HP has slightly better servers, but that's about it.
Yeah - we don't like it when obvious stuff is patented premptively - but obviously having a Dell simply copy whatever it sees in the market will stifle little guys who say - why invent if the end result is merely to inspire the monsters to clobber you in the market place.
A position of equity which suggests that all people are entitled to equal degrees of intellectual freedoms and rights without regard to the ability to pay for legal protections should be the foundation of thought in IP.
Allowing money to dictate the outcome of IP conflicts is dangerous to the last bastion of American productivity - ideas.
AIK
when it comes to cost model, the big diffs are %age R&D spend, and time between parts are paid for and the vendor gets paid. Dell have your credit card cashed before they pay for their parts, whereas HP (and anyone else who sells indirect) has to pay the vendors, have the stock and not reap the benefits of price depreciation.
:)
So to win against Dell its hard -you need to go to direct manufacture, if not direct sales. As well as kill all interesting R&D and instead focus on short term deliverables. If HP does have to go that way, it will hurt the company long term. But perhaps that is what they will have to do to survive at all. Going out of business hurts even more, long term
This is the second article I've read espousing this model that companies that do their own basic research fail and that any research should be purely market driven. They always point to "failures" like Bell Labs and Xerox. What I want to know is where we would be without these (formerly) far-sighted creative companies? The inventions of these companies where "seed" innovations that created whole industries. It doesn't take much heavy lifting to research the idea of e-commerce or to make a cheap printer, but invent the transistor, the laser, oop, etc. takes some serious resources and long term prospects. We are still reaping the rewards of a golden age in fundamental research driven by very large companies, regulated monopolies (Bell Labs) and cold war research. I can't imagine that Microsoft, the only company that seems to being doing any real basic research has the foresight to give away ideas that will spawn new industries.
is that some shorsighted board with no memory might decide to make an accountant CEO. Bean counters know numbers, think they know the processes, but don't know the product or the customers. This idea in the 50's and 60's led to US business getting their butts kicked in the 70's. Classic example: Robert McNamara at Ford, got costs under control beautifully, then brought out the Edsel, which ended up costing more than the savings.
I hope history does not repeat.
Professional Politicians are not the solution, they ARE the problem.
HP's quality has dropped by orders of magnitude since Carly took over. HP used to be highly proprietary, high priced, but lasted forever. Now HP shoves out marginal product with high failure rates, HP still beats the hell out of Lexmark but simply can't compare with the quality of Epson. In essence it's the Ford Pinto versus the GM Corvair when Epson is pumping out Honda Civics. I bought a cheap HP when my Epson 400 gave out, The quality of the printing was marginal, the registration was horrific, and the paper feed mechanism jammed every few pages. When printing CD labels I had a 25% wastage rate. As soon as I had amortized the cost I ran out and got an Epson C84, runs like a tank and generates spectacular print quality, I haven't had a jam in 6 months!
HP seems to be following the path of Polaroid and Xerox, once great innovators who have been mismanaged to oblivion.
Dell is worse with Lexmark (Ugh!) printers, but that does not exonerate HP from destroying a once great brand.
The article said that HP is leading the digital photography printing market. What a pile of steaming crap. Up until last year, they were barely on the radar, and even now the best photo printers are still from Cannon and Epson.
Dell marketed computers so reliable that people were willing to order them by mail. That was unique when they started. If someone asked me what kind of computer to get, Dell was one of my suggestions.
Alas, no more. Either their reliability and service problems are increasing or I am paying attention better. They seem to have forgotten what made them good.
are making their play...thankfully we still have some innovation in the space program.
Quick, build some ships before a giant mutant space goat eats us!
PC moderators can suck my White pierced, tattooed dick. If you think pride == hate, s/dick/Aryan meat mallet/g.
Most basic research labs are funded by monopolies (and appear to be one of the few reasons they are tolerated by customers in the first place). There was an interesting evaluation that MS isn't really towing the line as the dominant monopolist in their funding of basic research. Bell Labs gave us the transistor and laser, PARC (in the 1950s and 1960s Xerox was the shiznit of technology companies and the only copier maker) the mouse and GUI, and IBM gave us the PC, while MS has given us Clippy (hopefully XBRL takes of and becomes something that really delivers financial information to the masses)!
Degaussing scares the bad magnetism out of the monitor and fills it with good karma.
They manufacture very little. The cases are AOpen (IIRC). Intel does the MBs. Add-in cards are rebaged OEMs from various familiarly-named vendors. Dell just draws up some designs (which are actually pretty good, to their credit), then mass-assembles and tests them.
The printers, PDAs, and MP3 players are all complete rebadges.
But Dell does not roll any steel, nor stamp any aluminum, nor mold any plastic, or any of these traditionally regarded manufacturing processes. They are the kings of contracting out work. But they are damn good at it, and they are high volume enough to demand their own extra touches.
THIS THING CAN TURN ON A DIME, MACROSSZERO STYLE ALSO FUCK BETA, ~NYORON
How much does HP spend on R&D
....
FOR PRINTERS ???
The first laserjet was based on the CANON engine, so who spent the R&D money, again? Michael? I can't heeeaaar you
What's really being "tested" is whether a company with a lot of cash comes into a mature industry, sets up shop with the newest tools & technologies can beat a company that's still saddled with old technology.
This question has been anwered many times. I wonder which MBA intern wrote that clueless speech for Dell.
Apple most certainly didn't. It was Xerox who put all the hard work into figuring out how to make it work. Early versions were modified copier engines, but later, the laser printers that came with Xerox's Star office system were commercially available, reliable boxes.
I'm seeing so many stories on here about Apple innoavting this, and Apple innovating that. Not true. Most of Apple's Mac-era development - bitmapped display, mouse, WIMP OS - was derived from Xerox's PARC work due to a visit there in the early 1980s. I suggest you read this about the Star, and possibly source a copy of Dealers of Lightning for some factual history lessons in technology.
Hats off to Xerox PARC, the only people in recent history who can truly be called innovators.
Is that Carly 'Angel of Death' Fiorina's strategy at HP is to copy Dell's PC strategy! And when it was first developed Dell's strategy was innovative!
What we are seeing is an industry that is rapidly becoming as bad as the US auto industry in the 60's and 70's: crank out the crap then walk away from the customer as fast as possible.
My prediction is that there is a great opportunity here for true innovators who care about great products to step in and blow them out of the water.
The next great business model will not be created by monkeying Dell or HP. Look at how the US auto industry was gutted in the 70's and 80's.
putting the 'B' in LGBTQ+
Might be right, The Amiga was technologicaly way more inovative than any of the PC's of the time but it languished in sales because of Commadores "If your not smart enough to buy our computer then go buy a X86" ad campaign. There are A LOT of people out there that will buy just about anything as long as it is marketed well.
Funny this should come up, but didn't HP just license production of the iPod from Apple? That doesn't sound like innovation... To me, it seems like what Dell does IS a form of innovation. Sure, they don't invent new consumer technologies, but they seem to lead the pack in inventing ways to mass-produce them cheaply. In the end, that may be the more important strategy for a busuiness' success- like Microsoft, Dell will continue to take other people's ideas and find a way to be the biggest seller of them. C'est la vie, no?
Dell is right - technology is a solution, not a product. Even the most successful engineering companies lead with marketing; the technology is an enabler. Every successful businessman (and too many unsuccessful ones, too) knows that business is just measured social transactions, measured in money. The transacted material is largely a prop in the drama that unfolds among the business players. If that sounds too romantic for you, remember that most drama consumed through the mass media for decades is soap operas, which sell soap when they get viewers involved in the drama, like a larger family watching events unfold. It's not an electronic broadcast system, it's not apparently even selling soap: it's doing your chores in a distributed dysfunctional family.
Engineering leadership has a role in 21st Century business development. But reaching the market is paramount. Companies which find a market demand, then remove all obstacles to their filling that demand, are successful. Removing the obstacles is the job of technologists - finding the demand is the job of marketers. Rather than relegate techs to the sidelines, though, this logic offers engineers the opportunity to apply our winning disciplines to the marketing problems. Finding that demand is another problem that our analysis can solve just as well as we've solved so many others. And market engineers might bring a stability to marketing that the marketdroids, with their rudimentary skills, have never even dreamed.
--
make install -not war
And incidentally, while I know it's very fashionable to bash Wal-Mart ... what everyone seems to forget is that Wal-Mart has made it possible for lower-class people to live more middle-class lives.
Everyone also seems to forget that the only reason Wal-Mart can sell for less is because they're leading the trend of asian-imported, shoddy, lightweight, limited-lifetime goods. (While at the same time they hightly promote the few "Made In USA" goods left in the store) The company demands to get more from their buying dollar each year, this trickles down to manufacturing which has to cut corners. Eventually there are no corners left.
You and middle class America are NOT saving money because of Wal-Mart, you are actually spending more on replacement costs and are continuing to damage the environment in the process.
But... the Wal-Mart lifestyle is what people seem to want these days. Gone are the times of the hand-me-down. Welcome to the world of "I need a new cell phone, this model is over a year old!!!!!".
Make the product cheaper is the unoffical company slogan of the company I used to work for. Guess what, corporate headquaters just moved out of their less than 5 year old building into their warehouse. They couldn't come up w/ an ink jet printer of their own and tried to oem someone else's. Didn't work too well. Plus they got the All-in-One device backwards even though they started the whole thing. Innovation is the key.
....... Thus ends my attempt at wit or whatever
..youre quite anal-retentive.
....but for a few Apple Zealots, this is like finding bad spelling on the Dead Sea scrolls.
>Apple copied Xerox,
>Apple bought the rights to the invention from >Xerox
In the context used, there is no difference
Once bought, they still copied it from Xerox. As if paying for something somehow doesnt make it copying.
But hey, the sky in the Mac users world isnt that color just because of the kool aid they drink.
Did anyone else get the carrot ink popup ad when they read the article? And no disclaimer from NYT saying they had ties to the printing industry.
-Patrick
"They never stop thinking about new ways to harm our country and our people, and neither do we."
Does Dell have a God-given right to inovate?
The days of engineering-led technology companies are coming to an end," Mr. Dell declared.
When a suit starts sprewing garbage like that the next technological revolution is about to start.
an ill wind that blows no good
The article covers this. Canon makes HP's laser printer imaging engines, but not their inkjet components.
Intel is driving the ship for pretty much the whole PC industry (AMD x64 aside). Intel does much more than the CPU's They are active on all the levels. Just look at the IF's APG was Intel Now being supplanted by PCI-X. Etc.
The whole NYT article is missing the point, the innovations are still there they are just one step removed in the food chain. Take another axample. Who it the real innovator in the Handheld space? Texas Instruments.
It is the silicon that drives the electronic industry not the assemblers like DEll
Help fight continental drift.
Now that laser printers are getting cheap, it's time to go buy another one and stop bleeding money on ink cartridges.
I'm not real impressed with Lexmark's software. It tries to be friendly, so you have to install an application that negotiates with the printer about things like ink levels and paper outage. That's fine when it works, but it tends to lie about the ink level, and doesn't run on all my computers.
Bill Stewart
New Fast-Compression-only CPR http://preview.tinyurl.com/dy575ks
Because time spent on research and developmenet is by definition not spent gaining a profit by direct participation in the market, Innovators are by definition poor.
The rights of innovators to convert the time in R& D to profits later is what motivates (And in all analysis - funds them)
If innovators are not protected from those who keep their powder dry by doing nothing until the idea is created and proven in the marketplace - we will have reeinvented the institution of serfdom.
AIK
The first ink jet printer I ever was was a Xerox. This was in the early days of PC's, before HP even had an ink jet printer for sale. Xerox would only sell the printer as part of a word processing system package. I believe, but am not sure, that it had a custom interface.
Now Dell is marketing printers from Lexmark/Xerox. The R&D is still being done, just not by Dell. Lexmark is doing the R&D, maybe not as much as HP, but lots of it. The article mentions the fact that HP is in this same position in the laser printer market, but ignores it to concentrate on ink jet printers.
The difference between Dell and HP at least for ink jets, is that of a marketing company vs a integrated company. The integrated company should have the cost advantage.
A better comparison for the article, but much less provocative, would be HP marketing vs Dell marketing, or HP R&D vs Dell partner R&D, or loogin forward, HP laser printers vs Dell laser printers.
I feel that HP ink-jet hardware is much superior to Lexmark. As sad as this is, that may be the their dilemma.
FWIW I recently replaced a low end Lexmark printer because the cost of the replacement ink was more than the cost of a new printer. The replacement printer was selected more on the cost of ink supplies than on the cost of the printer itself, and was obviously NOT a Lexmark.
And makes it possible for middle class people to live lower-class lives at the same time !
xxxoooxxxWALMARTxxxoooxxx
regards
dbcad7
waiting for ad.doubleclick.net
This is where intellectual-property protections come in. In the absence of any such, some copycat would soon (this "soon" will be important later) undercut the innovator and destroy him in the market. But in markets where there is protection for the innovator (specifically patents), the innovator gets a 17 year monopoly which he can use to rake in the dough and recoup his investment.
Some things are not patentable, and go directly into the public domain. The aspects of UI design which MS battled Apple over turned out (per a judge) to be so. The feature list of a word processing program (many of these features, yes, innovated by MS) is the same. Woe betide Open Office were it not so, eh? Are they parasites? Certainly not in the way you suggest above. For these non-protected features, the only protection the innovator has is time-to-market, and reputation. This is often sufficient.
MS and Dell are not leeches. It's more like "standing on the shoulders of giants".
There is room in the market for innovators and for commodotizers. Are you, personally, willing to pay more for identical non-Dell products? Is your company? Do note that Dell has valid, paid-for licenses for all the (relevant) technology they use. The "innovators" Dell is "leeching" off of don't seem to be concerned.
...and Dell would dispatch them as quickly as they have in the past. A market wil little or no innovation plays right into Dell's hands and they would not be motivated to innovate themselves at all!
/. readers. It's focused on entirely different issues related to customers much different from us. Dell internally is arguably unaware of any image as a copier at all and they could care less. At the end of the day, Apple and HP would love to have Dell's productivity and profitability. Don't kid yourselves.
Dell is very much aware of others trying to "out-Dell" them and they work hard to keep the knife sharp. Compaq tried to copy their business model but it was too little, too late.
Dell innovates plenty BTW, just not in areas geeks see or understand. They developed full custom manufacturing when no one else was doing it. They cut the total days of inventory to an absolute minimum and pushed their debt/collection balance hugely in their favor. There are big reasons why Dell is so profitable is an industry where competitors struggle and the characterization here that they are nothing but copiers is inaccurate. Dell doesn't concern itself with its image among
Another thing, Dell doesn't concern itself in any way with Apple. They are essentially unknown and irrelevent to Dell.
Dell is in the printer business solely because its HP's bread and butter. Dell desires to drive the profitability out of the most lucrative businesses of its rivals. That's what they did to Compaq with servers and look where they are now.
I think you have good points to make.
But the traffic analysis of patents on Slashdot suggests that every patent is a threat to free beer or something like that.
Before you (we) will get a seat at the table where these issues are hammered out - we need to have more than a reactionary basis for a superior position.
AIK
Dell is a distribution channel, plain and simple. Its costs are minimized, there's no R&D, etc. Unlike Wal-Mart, Dell rebrands many of the items that it sells. Wal-Mart does too, under private labels, but for some reason Dell has been able to create "Dell" as a brand, unlike most white-box builders.
Dell now sells a ridiculously large amount of computer equipment: $11 Billion last quarter, $44 Billion on an annualized basis. They sold as much stuff as Microsoft last quarter, and they made 50% less. They've cut the monopoly premium to 50%, with margins of about 23%.
Plus, there's no reason to think they're going to stop anytime soon. They are the low-cost provider, period.
New technology? Probably not. But they sure are a cheap place to get boxes.
In fact, my other home printer is a Samsung which is also marketed as a Tally or a Lexmark - but is actually made by Samsung. It's about as good as the LJ5M, is also networked and Postscript compatible, but cost less than one fifth as much. That's commoditisation.
The really interesting advances in laser printers are being made by the likes of Minolta and Kyocera. As for really leading edge inkjet technology like Indigos, HP bought the company.
Panurge has posted for the last time. Thanks for the positive moderations.
Printers and not Fiorina's god given right anymore!!!
Eventually everyone has a printer which is at the limit of the existing technology. Since it is not (according to that quote) profitable to research more printers Dell's printer business will dry up leaving them with just the odd repair or replacement to go on.
The printer business, at least as it concerns inkjets is very different from other components. With the other components you mentioned, it's a one time purchase. Once it's the component's sold, you don't make any further money off it, and you actually start to eat up the profit a bit as the component ages due to support costs. There, you have to innovate, because your money comes from having people buying new technology. When it comes to printers though, the real money's in the supplies. Even if nobody ever buys another printer, they'd still have a revenue stream via the cartridges -- and usually with considerably higher margins than on the printers themselves.
``I have used some other cheap printers, most of them end up in the trash can after 9 months, it is cheaper than trying to fix them. Every HP we have used has lasted a long time''
Which is not to say HP is a better deal. A lot can happen in 9 months, and you might be interested in newer, faster or otherwise better models. You might actually save money by using "disposable" hardware if the benefits of the newer model and the lower purchase price outweigh the savings from the longevity of the HP.
Please correct me if I got my facts wrong.
Dell is simply doing to printer innovation what Fiorina has bragged* about doing to employees: turning them into a cheap commodity to be pumped and dumped as needed.
* Search "Fiorina God-given right" on Google if you don't know what I am talking about.
Table-ized A.I.
HP doesn't really make laser printers any more. If they can improve the inkjets to compete on speed and accuracy with laser - and I suspect they can - they can start to roll up the laser market with low power, clean ink based printers, with enough patent protection to get them a clear start. The departmental multifunction device - say the 4300 series - could be replaced with a machine costing the same or less that could do everything from mono to photo quality color. The question is whether HP has the resources, the balls or the bucks to do it, and the motivation to change inkjets from a cheap machine-expensive ink model to a moderate cost machine-cheap ink model. The RIAA should remind us how people cling to obsolete business models - on which they have built their careers.
Panurge has posted for the last time. Thanks for the positive moderations.
We have stagnation. If Dell puts all the hardware companies that develop technology out of business what precisely is dell going to sell again?
Da Blog
You may be on to something here...
Da Blog
Dell thinks he is running a technology company. This would be comparable to a supermarket claiming they are in the farming industry. Dell markets and sells technology, but they don't actually create it.
Da Blog
Even less appealing than before, isn't it?
You must think in Russian.
xerox would have been a much better company to make the comparison with.
Did he miss the fact that both markets are interdependent on each other? Innovators survive on innovating and the copiers survive on their creations, sure, but it's hardly a one way street and cutting cost is hardly the only way for these companies to turn a profit. The innovators often patent key technologies that are used by the copiers, who have to pay licensing and other associated usage fees. In markets where the copiers can do so without such payouts, the innovator still survive by -gasp!- innovating! According to this person Apple should have been dead years ago and the iPod will be bust soon because of all the copiers.
Which convienintly ignores the fact that a company who can continue to innovate can not only survive, but prosper as well while the copiers feed on the crumbs they trail behind, as Apple and other companies have proven time and time again contrary to Dell's busted reasoning.
You need a FREE iPod Nano
But it's just not. HP is not an "innovator." You could make the claim that their printer division is innovative. The problem is that the printer division is financially supporting the rest of the fucked up company.
And another thing, "innovation" exists in Dell's picture of the universe. An innovative company would be a small printer technology company that invents something new and better and sells it to Dell.
Difference between Dell and HP IMO goes beyond the simple copycat/inovator level.
For me, Dell is just an overgrown no-name company with zero appeal. HP on the other hand stands for quality products, and has a certain appeal.
Sure, I wouldn't pay an order of magnitude for comparable products, but as long as the price difference isn't too big, HP winns by a big margine.
As far as printers go, the only real choice is between HP and epson. I'm simply not rich enough to buy "cheap" Lexmark printers, and wouldn't even consider an Dell printer. (Do they even make any printers, or is it just relabeling?)
It comes down to a cost/benefit equation. What can you least afford: to have money invested in backup equipment/parts or to miss the deadline and possibly the business due to equipment failure.
If it's going to cost you tens of thousands of dollars then you would have two plotters running in the first place, and be able to switch queues should one device go offline. Both devices would be on a on-site-warranty contract, and you would place a call as soon as the first device went down. You would have scheduled maintenance and a replacement strategy to ensure the devices didn't run themselves into the ground.
If it's merely going to be mildly inconvenient, or cost you maybe several tens or hundreds of dollars. Then you would run with a single unit and possibly have the number of a hire service on file for when your primary device fails (for while you are waiting for it to be repaired).
Like any other form of risk management, you need to weigh up the likelyhood of the risk event occuring, the cost of it occuring and the cost for mitigating it. If the probability of failure is low and the cost of effect is low, then the investment to mitigate should also be low. If the probaility of failure is high and the cost of failure effect is high, then you should be prepared to invest in mitigating the risk.
Ultimately, that's what make the difference between a well run organisation and a lucky one.
Sara
Designer, Gamer, Macgrrl in an XP World
Goooooood one.
<grrr>
Actually, a company can be both innovation- and commodity-oriented, but not for the same products, and at the right times. An innovator cannot stay an innovator forever - when a product reaches commodity stage, they have to change to survive, or perish (for that particular product). Unless they can find a niche spot like Apple. There is much literature on this, such as Geoffrey Moore's "Chasm" and Sony's "Sunrise-Sunset" models.
Dell came in about when PCs are starting to become commodity products, hence their success. I think HP will survive, given the right management, because they have a host of other businesses as well. Just look at IBM. How did they survive for so long? They may have made mistakes where PCs are concerned, but I think they have managed their portfolio well enough over the years. Dell may be a successful commodity-oriented company, but unless they start looking beyond PCs, they probably won't last for very long. Anyway, who cares which company is left standing at the end of the day? All those who have become rich due to Dell are already rich. Isn't that what business is all about?
Fact is HP is the printer manufacturer industry leader. The reason for this is the large networkable and reliable printers. There is also a huge repair infrastructure fit around the HP printers. i.e. 3rd party repair groups who can come out and clean and repair our printers.
I am sitting in a building with about a 1,000 different HP LaserJet and Color LaserJet printers. Still have some 4SI's in service. They run every day and rarely break down. It may seem like there are breakdowns but it's mostly print jams or maintenance kits that need replacing. They are truly work-horses.
In another part of the company (smaller location but higher print demand) we installed some new Xerox highend printers because of the sheer volume that the users need.
Frankly, the article is mostly about retail inkjet printers and not big corporate lasers. Inkjet printers suck for any 'real' printing needs. You spend far more in ink then you do in the printers. I've done cost comparisons and we would be replacing the inkjet printer frequently and changing the ink even more frequently. The costs go through the roof.
Some users can get a desktop inkjet printer or all in one printer (managers and others with confidential information to print) but most users are told to use the big printers and get off their ass to retreive their print jobs.
Dell printers are not in the same class as HP printers and they don't scale to an enterprises needs.
does hp really invent or is everyone just listening to the ad campaign. what exactly have they invented? i'm not sure if throwing a scanner or an lcd on a printer and calling it multifunction is really invention.
perhaps i've used too many hp products and have become cynical. yesterday i had a 3 week old compaq pc with 112 meg ram running xp (the rest set to onboard video), how do they get away with selling a product below xp's requirements?
what is the deal with the 170 meg printer driver downloads on their site? glad i'm not on dial up.
and why do they feel the need to clutter windows startup with lots of badly named programs? a typical hp pc with a hp digital camera and a hp multifuction printer and a copy of norton antivirus is a train wreck waiting to happen, simply due to all the rubbish programs and drivers installed. and it's not like they are easily disabled from startup because they are all named hp with a bunch of letters which make no sense after it. bloatware at its worst.
"Since it is not (according to that quote) profitable to research more printers Dell's printer business will dry up leaving them with just the odd repair or replacement to go on."
You have overlooked that little money is made on the printers. It's in the consumables where the profit lies. The printers are a red-herring, often sold at a loss just to capture consumables.
If Dell sold 1 printer to each person and then quit except for repairs/replacments they would have a very very tidy high profit consumable business remaining.
And if they do capture those consumables HP is toast and HP knows it.
...and vice versa.
HP in the computer system business has decided to just stick its name on the innovations of others.
DELL has innovated by delivering computers to customers in a more efficient fashion without "leaving money on the table".
The argument that HP uses for getting out of the hardware and software business is that they can't afford the investment to compete against massive market shares of Intel and Microsoft which allows them to innovate, possibly far less efficiently.
DELL just embraced the situation of having Intel and Microsoft do the work and focused on other areas where it could innovate. And what DELL discovered was that it could sell directly to millions of customers without the middlemen who take a cut of the profit and demand that you provide the capital investment to fund the inventory. And then it discovered that it could sell the same computers at different prices to different market segments, something that HP and CompUSA do very inefficiently (you know, all those mail-in rebates).
Innovation is about doing business better than it has been done previously.
Invention is about a new or improved method or machine for a specific purpose. Inventions were intended to be patented so that the inventor would have the opportunity to innovate in the face of an established innovator (someone who takes existing and new products and delivers them to market better and faster than anyone else). Inventions were limited to spur innovation - if you can't deliver the invention to market, then you lose the exclusive right and others are given the opportunity to innovate where you can't.
HP is the leader in printers because they constantly invent and deliver to market ink jet technology and then leverage their strength and experience in ink jet printers in innovatively delivering the inventions and innovations of its laser printer competitors.
HP using the motto "HP Invents" is to me rather ironic when you consider the number of "inventors" that have been put out of the invention business in the process of building HP.
Are today's computers improving at the same rate they were when HP's computer architectures, Apollo's architecture, DEC's Alpha architecture were all competing for a piece of the market?
Is the best invention and innovation in the CPU market coming from AMD, (build on inventions bought from DEC?)???
Anyway, there is absolutely no question that DELL, Wal-Mart, Target, Amazon are great innovators.
When Amazon applied for the 1-click patent, I'm sure that they didn't want to prevent others from doing the same, what they wanted was some insurance that they would be prevented from innovating by someone who didn't care to innovate demanding payment for some equally stupid patent.
All of these companies depend on rapidly implementing business strategies and they have no time nor need for the slow and cumbersome patent system.