Cheap PC's and Windows 98
I was having a haircut the other day, when my barber started moaning about a PC he had bought from a local shop around two weeks previously.
After talking to the Norton and Freeserve Internet helplines, both firms had advised him that his PC needed a reinstall of Windows 98. The only problem, he said, was that he didn't have a Win98 CD-ROM to reinstall the operating system from. His dealer, he complained, wanted another 40 pounds for a Win98 disc.
Now, I'm not up to speed with the latest OEM requirements on Windows 98, but it seems curious that in September, 2001, the dealer is still installing Windows 98 - albeit Second Edition - on his/her PC's.
Secondly, I'm pretty sure that even the most basic of vendors supplies a CD-ROM for users to reinstall their operating system.
According to Microsoft, more than a quarter of business applications sold in the UK over the last year are pirate installations.
The problem is, my barber got a cheap PC - around 25 per cent less than the `going rate' by my calculation.
The problem for the dealer, however, is that my barber is one of those customers who wants everything exactly as it should be - and still at a price cheaper than the competition.
In short, he's a pain in the ass. He calls helplines a lot, so what the dealer has saved by supplying him with pirated software, s/he is losing in the cost of giving him extra support. I suppose I should do the decent thing and call the Business Software Alliance (BSA) hotline to report a case of obvious piracy, but I have to say that I'm unsure of whether this is simply a low-cost operating system strategy by Microsoft. And I want to visit my barber again, as he does quite a decent haircut.
Compaq & Hewlett-Packard announce merger
By the time you read this, Compaq and Hewlett-Packard will have started explaining how they are planning to merge their operations on a global basis.
The $24 billion merger plan has a lot of dealers in the UK worried, with some HP resellers understandably getting concerned that their `patch' will overlap with Compaq.
Compaq, of course, has been preparing for a possible merger/takeover for some time, extending its operations into the software services business since the start of the year.
In August of this year, Compaq revealed that around 40 per cent of its revenues were coming from outside the PC hardware side of its operations.
According to Carl Howe, the principal analyst with Forrester Research (www.forrester.co.uk), despite `Wall Street talk' about synergies and cost savings, the Compaq-HP merger is about something a lot bigger: survival in a consolidating industry.
Howe argues that, by acting now, both these firms are guaranteeing that they will still be here to compete in the post-PC world of services. "By any measure, the PC market is in shambles, with PC sales falling 10 per cent this year and firms like Gateway axing unprofitable geographies and products," he said, adding that, with the merger, Carly Fiorina and Michael Capellas are looking beyond the current thunderstorm.
"After a nightmarish two years of integration, the new HP will emerge stronger with one of the few remaining computer businesses," he explained.
Howe went on to say that Michael Dell launched a price war earlier this year in hopes of driving his competitors out of business during the downturn.
Despite this, Howe sees the new HP as having the deep pockets required to sustain short-term losses and product diversification that Dell Computer simply doesn't have.
The result, he predicts, will be a `new HP' that lives to fight on in the era of services and non-PC platforms instead of being stuck fighting for the title of lowest-cost PC maker.
The Forrester analyst sees the next two years in the IT business as getting more than a little bloody, with neither Compaq nor HP escaping completely from the problems. "The next two years aren't going to be pretty while HP tries to digest the Compaq acquisition, as anyone who remembers the Compaq-Digital merger can attest," he said.
Tiny Computers goes head-to-head with rivals
Even in the face of declining PC sales, Tiny Computers has opened a new flagship showroom in London's Oxford Street, focusing on what it calls the digital entertainment marketplace.
The gameplan is for the Oxford Street store to reflect the company's expansion in its range of products and will focus heavily on drawing footfall through unique window displays.
According to Colin Greene, Tiny's marketing director, by effectively selling direct with minimal overheads, the firm plans to use a boutique approach to PC and ancillary sales to sell more products per square foot than any other retailer in the UK. Greene said that the showrooms offer a visual representation of what Tiny is doing as a company.
"Tiny has traditionally been perceived as solely a PC retailer, but having recently expanded the business, there was a need to revise the image and reflect what we were doing through our marketing and in our showrooms," he explained.
Plans call for Tiny to refurbish several of its stores across the UK in the important runup to Christmas period, bring its store chain into line with the new London store.
Fujitsu-Siemens looking for new elite resellers
The PC industry may be in a downturn, but Fujitsu-Siemens is looking for around 70 extra resellers to sign up for its Elite 2 partners program.
The PC vendor launched its high-end reseller scheme at the start of the year, when it said it was looking for around 250 partners in the program by the end of 2001. According to Ian Snadden, the firm's director of channel sales, to extra 70 resellers will be signed up over an extended period, as the company isn't looking to rush things.
Snadden is taking a long-term view with his potential new high-end channel partners, and says he is looking for dealers who are willing to invest the time and technical competency in becoming an Elite 2 dealership.
GE Capital loses Compaq accreditation
GE Capital is reportedly less than pleased with Compaq's decision to axe its International Systems Reseller (ISR) accreditation, having reached the valuable reseller level at the start of the year. According to Compaq, both GE Capital and Microage lost their ISR accreditation in the vendors' latest assessment program.
GE Capital, the IT vendor says, lost its status as it failed to reach the reseller capabilities list. According to a recent issue of Microscope, however, GE Capital's IT Solutions operation is not letting of its Compaq business, as the company still plans on selling Compaq kit to its customers.
The dealer trade paper quote Andrew Wilson, GE Capital's UK president as saying that his firm still has all the Compaq accreditations it needs and does not see any need to belong to a dealer consortium.
Qw Compaq, www.compaq.com,
HP, www.hp.com;
Tiny Computers, 0044- 1293-827302 (GB), www.tiny.com;
Fujitsu-Siemens, 0044-1344-475811 (GB), www.fujitsu-siemens.co.uk;
GE Capital CITS, 0044-1444-870044 (GB), www.gecits-eu.com