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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
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.'
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
"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.
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
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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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.
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
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.
The HP/Compaq business-grade machines are light years ahead of that Dell trash. Better construction, better components, better design.
-Just my $.02.
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.
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...
I think that goes in the category of "Sad but true".
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.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.
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.
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.
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
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.
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.
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.
Hm, not really. Raskin, and some others at Apple, were already pretty familiar with Xerox's work. But Jobs kept interfering with their projects. So they arranged for him and other influential people at Apple to take tours of PARC so that they would see that things like the Macintosh project were actually worthwhile.
For a good history of Apple, I'd suggest "Infinite Loop" by Malone, IIRC.
-- This and all my posts are in the public domain. I am a lawyer. I am not your lawyer, and this is not legal advice.
You have never heard of Jef Raskin, right? The man who got the ideas before PARC? Who published them in the academia years before the Star and the Alto got built? Who went to work at Apple and created the Mac?
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.
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.
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.
You may be on to something here...
Da Blog
Good point about feedback -it's like the publishing industry - Amazon's sales ranking is the only sales metric that takes less than three months round trip. Information is power.
Regarding PC line R&D, laptops are still hard. They are the last bastion of high-QA client side systems. Get something wrong with the HDD mount and your AFR (annualized failure rate) goes from 20% to 60%, and there go your profits and customer happiness. Servers are the other area. But even there, Intel likes to help. Indeed, one way to view Dell is the execution arm of Intel's R&D.
Even less appealing than before, isn't it?
You must think in Russian.
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