Who's Crying For Dell?

Dell isn't my favorite computer manufacturer, despite being the largest and most successful computer seller in the world with around 19% of the market according to Business Week. I'd like to think that I've got legit reasons for not caring for Dell rather than just being a playa hata.

So let's get started. What has Dell, with their enormous power, reach and influence done for computerdom? Of course they brought USB into the mainstream, making cheap and universal peripherals possible. Oh, wait, that was Apple. Okay, they pioneered the home computer media center - oops, wrong again. That was Gateway. Okay, well they've been at the forefront of the revolution of computer industrial design. Wrong again - Apple, Sony and to a lesser extent HP.

Truth is Dell hasn't really been a leader in any sort of innovation, that I can think of (save for a few minor, marginally effective and narrowly adopted system management firmware applications intended for enterprise) in the ten years they've been #1 in the PC business.

Dell has squandered its time on top of the heap. Even now, after so much time to develop itself as a platform, to innovate or whatever, Dell hasn't managed to make itself valuable for anything else than its cost. I'll repeat that because I think it's important. There is no value in a Dell computer outside of cost.

I love the question in the Business Week article that asked if Dell was a one trick pony. It appears to me that they are. It also appears to me that they always will be - this article, also from Business Week, includes an observation that Dell spends less than 1% of its budget on R&D annually. This blew my mind when I read this because it has to be understood that this 1% of R&D is being spread not just over desktop computers, but over servers, laptops, music players, big-screen televisions, projectors and more. No wonder they haven't innovated in a decade - their R&D budget is big enough to buy lunches for the team and keep the lights on and that's it.

Not quite, but you get my point. So what should Dell do? I think, if Dell were smart, they would realize that the commodity days of the PC business are ending - and their model has to change to adapt. It's no longer acceptable to let Microsoft and Intel do all the innovation - Dell has to start treating their brand as a platform, much like Apple does. Dell needs to start to find ways to get people excited about using their products, rather than settling because of price.

There was a great suggestion in the second BW article that encouraged Dell to develop ways to ensure easy customer data migration. This would be a great first step, but would require a lot of development effort and expertise that Dell hasn't earned itself in the 10 years its been on top.

I'll continue this tomorrow.