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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.

10 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 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.

  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. 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
  4. 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
  5. 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
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