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On page 5 of this weeks CRN print Magazine, you will find a picture of Michael Dell gracing the cover. In large print, the cover reads DELL HITS THE WALL. Below, it asks: "Does Dell's warning to Wall Street last week expose chinks in the armor of the direct giant's business model?"
Then the article reads: "That’s what solution providers gleaned from Dell’s unexpected warning to Wall Street last week. The Round Rock, Texas-based computer maker warned that its upcoming earnings report would show revenue of about $13.9 billion for its fiscal third quarter, down from the range of $14.1 billion to $14.5 billion it had previously forecast."
“Dell’s formula isn’t working any longer,” said Jay Tipton, vice president of Technology Specialists, a Fort Wayne, Ind.-based solution provider. Tipton and other solution providers noted that Dell’s direct-equals-low-price gambit no longer works with customers hungry for solutions and local service.
[Ed; So what do I read out of this? Payback. -tadelste]
They have become terrible in their service and in adding-on expensive things that are vapor services. I had a friend buy a Dell last year and her experience was terrible. They tacked on a training package even after she specifically asked them to remove the package. She had to argue with two sales representatives and a manager before they reluctantly took it off only to charge her again for it two months later. (She did monthly payments).
I used to recommend them wholeheartedly, but nowadays, I'd stay away. It's a hassle to get just a PC from them, you have to get a bunch of garbage along with it. UGH. At least there's a local store here where I can buy a good no OS computer without much hassle.
Next up - Will Best Buy and the Geek Squad also go this route?
I've seen a few of these articles recently, especially focusing on their low quality of customer services. However, missing the analysts' prediction by $200m doesn't mean they're going to crash and burn any time soon. The article doesn't say anything about a drop in the quantity of PCs sold, only a drop in revenue. It also states But as part of its earnings’ warning, Dell said it was taking a charge of $450 million in the quarter, $300 million of which was earmarked to fix faulty boards on older OptiPlex desktops which seems to be a lot of money, however I've no idea how many of these boards they sold so can't make a comment on whether that's significant or not. I think that it's just as likelythat they lost a big wad of cash on derivatives as that they're business model is "against the wall". Nice work by the HP PR department in slagging Dell though.
I totally agree though, buying a computer locally means better service, a plain OEM OS (if XP floats your boat) and prices are generally on par with major retailers too.
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I used to recommend them wholeheartedly, but nowadays, I'd stay away. It's a hassle to get just a PC from them, you have to get a bunch of garbage along with it. UGH. At least there's a local store here where I can buy a good no OS computer without much hassle.
Next up - Will Best Buy and the Geek Squad also go this route?