[Wolves] MS tightens the screw

Shane M. Coughlan shane at shaneland.co.uk
Sun Apr 9 00:18:56 BST 2006

Hash: SHA256

Peter Cannon wrote:
>> DELL are eating up the world market because their logistical ability is
>> fantastic.  They deliver equipment from manufacturer to consumer at
>> lightning speed, and they have a very dynamic production system,
>> allowing new models to appear almost as soon as hardware or prices allow
>> their creation.
> Do you work for them or something? I know you have to be careful what with 
> your association and all, I as well should be a bit more careful given my 
> reseller status but I really have to take issue with the above paragraph.
> 1. They do not deliver at lightning speed the standard given is 10 days they 
> may deliver sooner if you're lucky.

True enough, but their logistics are mainly in their ability to get the
equipment from Asia to their European and US marketplaces very quickly.

> 2. The build quality in a lot of cases is appalling we are on the phone to 
> them everyday regarding machines that have just arrived at out premisses DOA.

Sorry to hear that.  I had a bad experience with my ASUS laptop.  The
hard drive failed less than a month after I got it, and I sent it for
repairs.  Came back a week later, wouldn't even switch on.  Took a lot
of yelling on the phone for everything to be sorted.  The machine was
out of commission for around a month.

There can be nothing more annoying than a DOA machine.  I had no idea
that a significant amount of DELL machines suffered from problems.  I've
simply never encountered any (but I guess you see a million more than me).

> 3. Production consists of putting raw base units together, stacking them on 
> shelves for anything up to 2 years taking those units for orders and swapping 
> bits as required.

Yup, DELL is just good at guessing how many of X units it needs, and
ordering effectively to minimise their warehousing costs while
maximising their sales.

> 4. Dubious advertising, numerous times equipment is advertised, credit card 
> payments taken only to be informed it is no longer available. 
> Remember the £100.00 server people? (Members of this list)

Yes indeed.  Big mistake.

>> I do agree with your point that they are likely to make the most of
>> their massive marketshare by ultimately raising prices in certain areas,
>> or creating "consumers for life."  But that's legitimate business
>> practice. 
> STOP THERE!! did I read that paragraph correct??
> If thats the case then I never ever ever want to hear another moan, groan, 
> snipe or attack on Microsoft.

There is a significant difference between seeking to hold onto consumers
and acting in a way that is classed as unfair trading.  Microsoft
stepped over the line on more than one occasion, and is being penalised
because of it.

> You cannot promote one worry about digital rights then with the next breath 
> state that "consumers for life" is legitimate business practice!!

It is a legitimate business practice.  It is about creating customer
loyalty through delivering high quality at low prices, and constantly
anticipating consumer wishes.  I'm not saying that DELL is doing/going
to do this.  I am simply saying that the above practice is perfectly

> Sure I want my customers to stay loyal and yes I would use every trick in the 
> book to keep them but I am not in a position to force them to stay and these 
> two are and the consumer has allowed it to happen by voting with their 
> wallets.

There is a huge difference between a customer for life, and forcing
someone to stay with you.  I don't see how DELL is forcing anyone to
stay with them.  Microsoft did/does do so through having undocumented
APIs, unfair competitive practices, etc etc etc.  DELL sell boxes that
you can get from others for a slightly higher price.

>> I guess what we should really ask is "why are all the other big boys in
>> the market falling so far behind DELL?" 
> Maybe because they did not get massive government incentives to set up in 
> Ireland, giving huge employment to a depressed area and helping towards 
> ensuring that country is more stable, just for starters.

Not quite correct.  Apple is in Ireland.  Intel is in Ireland.
Microsoft is in Ireland.  Etc etc etc.  All the technology companies get
the same incentives (no tax for a certain period, plus money towards
building factories).  HP is the number one IT company in Ireland

> I'm not angry or anything its just that I feel Microsoft and Dell are now in a 
> position to influence the world, one winging git in the West Midlands isn't 
> going to make much difference to them. We all need to look at the bigger 
> picture and not our own personal requirements.

I think both are in a position to influence the world.  One (Microsoft)
has abused their position.  The other (DELL) is currently doing nothing
illegitimate.  You are right that we need to look at the bigger picture
though, and we need to ask questions about private companies expanding
to a state where they can sway governments (let alone small and medium

> What happens when MS or Dell suddenly hikes the price up, sets some sort of 
> restriction on use or any other thing thats going to have a massive effect on 
> your business and all the other suppliers have been forced out of business?

It's a problem.  There is no doubt of that.

Let's take patents.  If the US companies get to have patents in Europe,
suddenly a lot of our (much smaller) software makers will lose the right
to make their software.  The big boys will crush our small, medium and
even large technology firms.  It's quite serious.  I'm actually just
starting a little project to produce paperwork on this.  We're going to
make a list of European software firms, compare them to their US
counterparts, and make a list of the US patents that would cause serious
issues for the EU boys.

The project is at http://freedom.opendawn.com

Perhaps you would be interested in joining.  Our main project right now
is the creation of this patent report, but the remit is to show how Free
Software can help businesses in a positive way.

Let's take your case.  The market is treating you pretty roughly.  DELL
is undercutting you on hardware.  Microsoft solutions provide revenue,
but a lack of differentiation from other technology businesses in the
locality.  Perhaps Free Software could lend a hand.

Do you remember that in my talk at Wolves I was saying that Free
Software has pretty much failed to provide businesses with sustainable
business models.  It's not because we cannot offer sustainable models,
it's just because the focus has tended to be elsewhere.

I would be really interested in hearing your views about how such models
could be created, about how Free Software could contribute to businesses
like yours, and about the negative aspects as well.


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Shane Martin Coughlan
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