Tuesday, January 24, 2006
Dell Screws Up a Good Thing
Thanksgiving dinners have been a little touchy the last few years, in my family.
My sister works for a large Palo Alto-based printing giant that made the mistake of acquiring a large, poorly run, Houston-based computer company a few years back. Now, I have nothing at all against HP or "The HP Way"—HP has been very good to my sister—but it so happens I run my business on computers and printers from Dell.
So, what with the general controversy surrounding former CEO Carly Fiorina, not to mention the complete absence of HP products around my office and our house—except for an old HP printer down in the basement on which the cats like to perch—we haven’t really seen eye-to-eye about which company, Dell or HP, constitutes “best of breed” when it comes to the IT needs of a small business owner.
It seemed obvious to me that, like all storied franchises in technology, HP never grasped the shift that undercut its multi-tiered distribution-based model. It always surprised me to hear HP executives mock Dell at every opportunity as nothing more than “a distributor” lacking the kind of R&D that made HP what it had become…which was, in my view, a slow-moving, high cost personal computer company completely out of touch with what made the direct sales model so compelling.
As a small business guy, I don’t particularly care if my printer has the latest ink cartridge technology or my computer has fifty gigaflips of terabytes. And I absolutely don’t want to have to deal with some Office Depot salesman trying to hit a month-end quota in order to buy my office equipment.
I want a good computer system I can order online or over the phone; I want it shipped to my office; I want plug-and-play so even any idiot, including myself, can get up-and-running before the market opens; and I want great support if I need it.
And Dell satisfied those needs for more than ten years, because Michael Dell understood the time value of technology.
But that was then, and this is now: and what happened now is that I spent five hours off and on last night dealing with a mish-mash of toll-free numbers and incompetent or not-my-department technical support people at Dell.
Poor service at Dell is not necessarily new-news. I’ve been hearing since last summer from various friends and acquaintances that Dell tech support was not all it had been cracked up to be. But since I haven’t called Dell Technical Support in over a year, I didn’t pay much attention to it.
Today, I am paying attention.
All I needed to do was change some settings on a Dell TrueMobile wireless router, which is not a big deal: Dell’s formerly ace support people walked me through the exact same routine a year ago. Took maybe ten minutes.
But all of a sudden, it is a big deal.
Every blind alley in the new ghetto that is Dell customer support led me to a paid help desk—despite the fact that I have what is supposed to be “Gold” technical support.
Worse, they wanted to make me first go to a salesman in order to buy the paid help desk service.
What happened here? Did Dell outsource its technical support to Milo Minderbinder?
I suspect that, in its desire to satisfy the shareholder base that still thinks of Dell as a growth stock, the only way to “hit the numbers” now that both the law of large numbers is kicking in and Mark Hurd has begun to revive HP as a force to be reckoned with, the number-crunchers running Dell are simply cutting what made Dell great.
And since they can't cut R&D—because as HP always pointed out, Dell was never an R&D-driven company—they cut the customer support that won it loyalty, and sales, from small business customers like me.
I don’t know if this is an over-reaction to one data point that means nothing in the long run, although given the grumbling from other quarters since last summer I doubt it. And I don’t know if Dell’s business model is at risk. Nor do I have a strong opinion about whether Dell’s stock is over-priced or under-priced.
But I can tell you Thanksgiving dinner is going to be a lot more comfortable next fall: I’ve bought my last Dell.
I Am Not Making This Up
© 2005 Jeff Matthews
The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews' recommendations.
Posted by Jeff Matthews at 7:48 AM