Slashdot Mirror

← Back to Stories (view on slashdot.org)

Innovators vs Copiers: HP vs Dell

Posted by Hemos on from the the-battle-rages dept.

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.

21 of 392 comments (clear)

  1. When you're a commodity-oriented company... by Lord+Grey · · Score: 5, Insightful
    "The days of engineering-led technology companies are coming to an end," Mr. Dell declared.
    When your business is in mass-producing someone else's technology, quotes like this are almost mandatory. After all, the shareholders have to be given reasons for liking your company and you're not allowed to use the word "innovative" anywhere in the press release.

    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.

    --
    // Beyond Here Lie Dragons
    1. Re:When you're a commodity-oriented company... by MoonBuggy · · Score: 5, Insightful

      I actually find that quote very short sighted. While there is plenty to be said for being a manufacturer rather than an innovator, it does not mean that the innovator's days are numbered. They both need to exist - only innovators would mean everything would be too expensive and something better would always be just around the corner.

      Only manufacturers would be just as bad. What exactly do Dell intend to do if everyone does stop innovating? 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. Their PC business would go the same way if people stopped coming up with faster and better CPUs, graphics cards etc.

    2. Re:When you're a commodity-oriented company... by OECD · · Score: 5, Insightful

      "The days of engineering-led technology companies are coming to an end," Mr. Dell declared.

      It doesn't then follow that Dell will prosper. I bought my last computer at Walmart for $200. That should worry him.

      --
      One man's -1 Flamebait is another man's +5 Funny.
    3. Re:When you're a commodity-oriented company... by Short+Circuit · · Score: 5, Insightful

      What exactly do Dell intend to do if everyone does stop innovating?

      Building a limited lifetime into a product is hardly innovation. A plastic shell, cheap plastic parts, built-in print heads--they all lead to a consumer purchasing a new one.

      The problem you describe, however, was one of the issues faced in the 1930s. Clothes washers and dryers in particular, had been in high demand. Thus, the companies kept ramping up production. Nobody expected the market to get saturated...

      I think it's a problem all durable-goods manufacturers face. Especially those whose new product concepts' markets havn't been saturated yet.

      --
      tasks(723) drafts(105) languages(484) examples(29106)
    4. Re:When you're a commodity-oriented company... by Doomstalk · · Score: 5, Insightful

      Only manufacturers would be just as bad. What exactly do Dell intend to do if everyone does stop innovating? 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.

      Two words: ink cartridges.

    5. Re:When you're a commodity-oriented company... by Grishnakh · · Score: 4, Insightful

      Go away, troll. No one here, at least not a significant number, has called for abolishing all patents. We only want the patent system reformed to prevent patents that are trivial, obvious to a practitioner of the art, software patents, and business method patents.

      Maybe I should make a statement about what the US would be like if we instituted Sharia (strict Islam) law, like many Americans want. Just because you hear one freak say something doesn't mean it's representative of the group.

    6. Re:When you're a commodity-oriented company... by ron_ivi · · Score: 4, Insightful
      "The problem you describe, however, was one of the issues faced in the 1930s. Clothes washers and dryers in particular, had been in high demand."

      I think you hit the nail on the head.

      Dell's real observation is that computers (at least PCs) aren't a high-tech industry anymore.

      Howerver, surely Dell's "The days of engineering-led technology companies are coming to an end" guideline is not at all the case for companies that are still in a high tech sector. One of the carbon-nanotube companies may very well replace Intel in post-silicon computing. One of the robotics companies may replace much of the military. Surely these are "engineering led".

      But in their market, I must agree with Dell that I don't see a "engineering-lead" Wintel-box company in the near future.

    7. Re:When you're a commodity-oriented company... by Rich0 · · Score: 5, Insightful

      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.

      At work we recently bought some printers for $600 each, with an option to buy a $200 service contract.

      We saved money by just buying an extra printer. If anything bad happens we'll just toss one and immediately substitute the spare. It is cheaper that way.

      Same goes for super-fancy hardware. Which is better, a 99.999999% reliable server for $100,000, or 10 99% reliable servers for $5000 each? If it breaks, just throw it out (granted, servers aren't an ideal comparison since the data on them might be priceless, but it works just fine for most hardware).

      If having a plotter goes down will cost you tens of thousands of dollars, then you should have more than one of them.

      This is just like the difference between just-in-time and just-in-case. If not having an item will hinder your ability to get one item out to market, then make it just-in-time. If not having one item will shut down every assembly line in your plant and take a month to replace, then keep a few spares just-in-case.

    8. Re:When you're a commodity-oriented company... by ePhil_One · · Score: 4, Insightful
      We saved money by just buying an extra printer. If anything bad happens we'll just toss one and immediately substitute the spare. It is cheaper that way.

      And when the second problem develops? What about the third? Note that having a replacement handy is not neccessarily a replacement for a warranty, thats just bad math.

      Which is better, a 99.999999% reliable server for $100,000, or 10 99% reliable servers for $5000 each?

      Thing will depend on your usage. Is this an application you need uptime for? Can you effectively cluster the multiple boxes Will the performance scale effectively? These are very important questions that could easily make that $100k server a bargain and those $5,000 servers a money pit.

      If having a plotter goes down will cost you tens of thousands of dollars, then you should have more than one of them.

      I think you missed the posters point. Buying a $6,000 plotter that has to be replaced every 1.5 years is more expensive and troublesome than buying a $10,000 plotter that runs reliably for 4 years. Wasting Space (which costs money) on a spare in the closet is not a genius plan. Buying a workgroup class printer which can be shared, costs less per page, and is more reliable/maintainable/etc. is probably a far wiser plan, although certainly there are circumstances when this is not the case.

      --
      You are in a maze of twisted little posts, all alike.
  2. Then who will innovate? by Anonymous Coward · · Score: 5, Insightful

    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.

  3. HP? An innovator? by Em+Ellel · · Score: 4, Insightful

    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...
  4. Mature products by rueger · · Score: 5, Insightful

    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
  5. Thank God I've still got my LaserJet III by n1ywb · · Score: 5, Insightful

    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
  6. The Innovators should always win by ChopsMIDI · · Score: 4, Insightful

    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
  7. Short-sighted by ErichTheRed · · Score: 4, Insightful

    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!

  8. Remember how the biz/tech press makes its money by Infonaut · · Score: 4, Insightful
    No, you're not missing anything. The business/technology press makes money by selling advertising, and conflict stories sell their publications. It's obvious that Dell needs innovators to show them the way, just as it is obvious that innovators can never completely dominate a market as their innovations become commoditized. But don't tell that to the press:

    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
  9. Re:missing something here.... by Short+Circuit · · Score: 5, Insightful
    The innovator usually never reaps the rewards because the true potential of their innovation is only realized by an outside pair of eyes.

    I disagree with the first part, but agree with the reason. Take PK-ZIP, Ethernet, RS-232, and Eclipse for example. Their creators released the specifications to the world. Suddenly, their product is compatible with a lot more machines out there, so people will buy products centered around it.

    • ZIP became the standard, and PK's closed version of the library was the fastest around for dealing with it. (A big deal when you consider the speeds of commodity hardware at the time.
    • Ethernet still is the standard. There's still lots of money to be made in hardware implementations.
    • RS-232 isn't the standard on the home PC any more, but it's still widespread in industrial equipment. Analysis tools are still big money there.
    • IBM's Eclipse is close to a de facto standard. IBM can still make money off it by developing plugins.


    In fact, that's one of those business models that was mentioned in the OSS compatibility handbook [ ;) ] Slashdot linked to last week.

    The point is, innovation can survive in a copycat-filled world. You ju
    --
    tasks(723) drafts(105) languages(484) examples(29106)
  10. Innovation? by Mage66 · · Score: 4, Insightful

    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...

  11. Innovators Rule - within a patent system by mosel-saar-ruwer · · Score: 4, Insightful

    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:

    Innovators Rule - Provided there is a system of patent law, copyright law, and trade secrets law to protect their innovations.
    Without those legal protections, the intellectual property of innovators is essentially worthless.

    1. Re:Innovators Rule - within a patent system by JWW · · Score: 4, Insightful

      I don't really have a problem with patents on THINGS, but I do have a problem with patents on algorightms and procedures.

      The process of selling something by clicking a mouse button should never, ever have received a patent.

      But by all means software should be able to be copyrighted and where you can make it work, it should be able to be a trade secret also.

  12. The Big Problem is ... by monopole · · Score: 4, Insightful

    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.