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HP Businesses Printer

Innovators vs Copiers: HP vs Dell 392

Posted by Hemos
from the the-battle-rages dept.
eaglemoon writes ""The days of engineering-led technology companies are coming to an end," Mr. Dell declared. The NY Times outlines a modern version of a classic innovation theory. Who gets to win in the marketplace - the innovators who invest in R&D like crazy or those that just take cost out of standard products? The current fight between Dell and HP over the printer business is a great natural experiment in verifying this theory." The article does a good job of stating what the real contest is - it's the different theories of corporate structure that's being tested.
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Innovators vs Copiers: HP vs Dell

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  • by Lord Grey (463613) * on Monday May 24, 2004 @11:05AM (#9237908)
    "The days of engineering-led technology companies are coming to an end," Mr. Dell declared.
    When your business is in mass-producing someone else's technology, quotes like this are almost mandatory. After all, the shareholders have to be given reasons for liking your company and you're not allowed to use the word "innovative" anywhere in the press release.

    Sure, there's something to be said for running a solid business around commodity products, even if they do cost a lot (compared to say, paper plates). It really is a good business to be in. The printer business, which the article focuses on, fits Dell's ideas pretty well.

    But when I look for a new computer to buy, I look to Apple and I look at Dell. There's a big difference there.

    • by MoonBuggy (611105) on Monday May 24, 2004 @11:18AM (#9238040) Journal
      I actually find that quote very short sighted. While there is plenty to be said for being a manufacturer rather than an innovator, it does not mean that the innovator's days are numbered. They both need to exist - only innovators would mean everything would be too expensive and something better would always be just around the corner.

      Only manufacturers would be just as bad. What exactly do Dell intend to do if everyone does stop innovating? Eventually everyone has a printer which is at the limit of the existing technology. Since it is not (according to that quote) profitable to research more printers Dell's printer business will dry up leaving them with just the odd repair or replacement to go on. Their PC business would go the same way if people stopped coming up with faster and better CPUs, graphics cards etc.
      • What exactly do Dell intend to do if everyone does stop innovating?

        Building a limited lifetime into a product is hardly innovation. A plastic shell, cheap plastic parts, built-in print heads--they all lead to a consumer purchasing a new one.

        The problem you describe, however, was one of the issues faced in the 1930s. Clothes washers and dryers in particular, had been in high demand. Thus, the companies kept ramping up production. Nobody expected the market to get saturated...

        I think it's a problem all durable-goods manufacturers face. Especially those whose new product concepts' markets havn't been saturated yet.
        • "The problem you describe, however, was one of the issues faced in the 1930s. Clothes washers and dryers in particular, had been in high demand."

          I think you hit the nail on the head.

          Dell's real observation is that computers (at least PCs) aren't a high-tech industry anymore.

          Howerver, surely Dell's "The days of engineering-led technology companies are coming to an end" guideline is not at all the case for companies that are still in a high tech sector [dfj.com]. One of the carbon-nanotube companies [eetimes.com] may very well replace Intel in post-silicon computing. One of the robotics [packbot.com] companies may replace much of the military. Surely these are "engineering led".

          But in their market, I must agree with Dell that I don't see a "engineering-lead" Wintel-box company in the near future.

        • by whittrash (693570) on Monday May 24, 2004 @01:26PM (#9239428) Journal
          I am an architect, I work with large format plotters and printers all day. If the printer breaks, jams badly or the printer head wears out or clogs at a critical time or if there is performance degradation it can be a disaster, and can blow deadlines or we may end up not having critical graphics at important meetings. These are all technical and performance issues which are very important. If the software sucks, it is a constant hassle. HP is the only company I know that has made ink jet printers which last a long time and continue to perform under these high demand situations. I would never buy a Dell unless they can develop rock solid technology that is equal to what HP has. They can't do that by using a Frankenstein collection of technology I don't think, there will always be a critical feature that can fail. Maybe in the future they can do that, but right now I don't trust them.

          I have used some other cheap printers, most of them end up in the trash can after 9 months, it is cheaper than trying to fix them. Every HP we have used has lasted a long time and we have had few problems, all we do is switch ink cartridges. I have no doubt Dell will be cheap, but I doubt they will have the same quality as HP. In the end, they will probably end up in the trash bin. Cheap crap doesn't inspire customer loyalty.

          That is the bottom line for me, not whether one innovates or not. I really don't care who makes the product as long as it works and works well under demanding circumstances and the print out looks good. That is why HP is the leader IMHO.
          • by Rich0 (548339) on Monday May 24, 2004 @01:48PM (#9239622) Homepage
            I have used some other cheap printers, most of them end up in the trash can after 9 months, it is cheaper than trying to fix them.

            At work we recently bought some printers for $600 each, with an option to buy a $200 service contract.

            We saved money by just buying an extra printer. If anything bad happens we'll just toss one and immediately substitute the spare. It is cheaper that way.

            Same goes for super-fancy hardware. Which is better, a 99.999999% reliable server for $100,000, or 10 99% reliable servers for $5000 each? If it breaks, just throw it out (granted, servers aren't an ideal comparison since the data on them might be priceless, but it works just fine for most hardware).

            If having a plotter goes down will cost you tens of thousands of dollars, then you should have more than one of them.

            This is just like the difference between just-in-time and just-in-case. If not having an item will hinder your ability to get one item out to market, then make it just-in-time. If not having one item will shut down every assembly line in your plant and take a month to replace, then keep a few spares just-in-case.
            • by ePhil_One (634771) on Monday May 24, 2004 @03:10PM (#9240359) Journal
              We saved money by just buying an extra printer. If anything bad happens we'll just toss one and immediately substitute the spare. It is cheaper that way.

              And when the second problem develops? What about the third? Note that having a replacement handy is not neccessarily a replacement for a warranty, thats just bad math.

              Which is better, a 99.999999% reliable server for $100,000, or 10 99% reliable servers for $5000 each?

              Thing will depend on your usage. Is this an application you need uptime for? Can you effectively cluster the multiple boxes Will the performance scale effectively? These are very important questions that could easily make that $100k server a bargain and those $5,000 servers a money pit.

              If having a plotter goes down will cost you tens of thousands of dollars, then you should have more than one of them.

              I think you missed the posters point. Buying a $6,000 plotter that has to be replaced every 1.5 years is more expensive and troublesome than buying a $10,000 plotter that runs reliably for 4 years. Wasting Space (which costs money) on a spare in the closet is not a genius plan. Buying a workgroup class printer which can be shared, costs less per page, and is more reliable/maintainable/etc. is probably a far wiser plan, although certainly there are circumstances when this is not the case.

              • by Macgrrl (762836)

                It comes down to a cost/benefit equation. What can you least afford: to have money invested in backup equipment/parts or to miss the deadline and possibly the business due to equipment failure.

                If it's going to cost you tens of thousands of dollars then you would have two plotters running in the first place, and be able to switch queues should one device go offline. Both devices would be on a on-site-warranty contract, and you would place a call as soon as the first device went down. You would have schedule

            • by DrCode (95839) on Monday May 24, 2004 @07:44PM (#9242980)
              That's why my software group bought a second automatic espresso machine to be used as a spare. Previously, a breakdown of the machine would cause major productivity declines during the week it took to get it fixed.
      • by Doomstalk (629173) on Monday May 24, 2004 @11:40AM (#9238252)
        Only manufacturers would be just as bad. What exactly do Dell intend to do if everyone does stop innovating? Eventually everyone has a printer which is at the limit of the existing technology. Since it is not (according to that quote) profitable to research more printers Dell's printer business will dry up leaving them with just the odd repair or replacement to go on.

        Two words: ink cartridges.
      • What exactly do Dell intend to do if everyone does stop innovating?

        What would grocery stores do if people stopped farming? Michael Dell is arguing for the seperation between innovation and manufacturing not the end of innovation. Sort of like MIP's model for CPUs vs. Intel's. Not that I agree (MIPS and Intel being a case in point) but....
      • by Grishnakh (216268) on Monday May 24, 2004 @12:44PM (#9239038)
        What exactly do Dell intend to do if everyone does stop innovating? Eventually everyone has a printer which is at the limit of the existing technology. Since it is not (according to that quote) profitable to research more printers Dell's printer business will dry up leaving them with just the odd repair or replacement to go on.

        And what's wrong with this? This is the best position for them to be in. They can sell the occassional replacement printer at or below cost, and then sell ink cartridges for $50 each (which cost $1 to make). By not manufacturing very many printers, which cause them a loss, and selling tons of cartridges, which have a huge profit margin, they'll have a huge profit and their stock will go through the roof.

        Of course, if consumers were smart enough to refuse to buy into this business model, maybe we'd have better printers and cheaper ink, but I'm sure a P.T. Barnum quote would explain this phenomenon nicely.
    • by bandrzej (688764) on Monday May 24, 2004 @11:21AM (#9238063) Homepage
      Exactly! I was in a vendor meeting with Dell, and they clearly stated they make Intel, HP, and all the other manufacturers do the R&D...then after a product has been on the market for a while, they take it, partner with that company to get its product, and Dell-ify it with their own R&D. That is *exactly* what happen with Lexmark and the "Dell" printers. All of Dell's printers are manufactured by Lexmark, just different requirements and rebranded.
      • by maunleon (172815) on Monday May 24, 2004 @02:12PM (#9239830)
        The problem with copying is this:

        The innovator will have the first shot at the market. This means that they can charge premium if they want.

        The copier comes later, and must compete on price. Dell is doing that okay for now, but how are they going to do once big boys like Walmart have their game down?

        The innovator at least can hit the market hard, and get a little profit until everybody else jumps in. They can also profit from licensing patents to others, so even if they lose the marketing war later on, they can profit from the copiers' volume. However for the copiers, they must outmarket or underprice every other copier in the market.

        Dell's been doing a good job of marketing sofar. We'll see how they deal with Walmart's muscle considering their many distribution points. I think Dell is in big trouble.

        They should also be very afraid if the thin client makes inroads in the home user market. Then people will end up buying their next computer at the supermarket, throwing it into their shopping cart alongside the box of cereals and toothpaste. Not that far fetched.. in a year or two, the cost of the hardware to build a thin client good enough for the average (non-game-playing) end user would be less than the cost of an imported wheel of cheese.

    • by OECD (639690) on Monday May 24, 2004 @11:21AM (#9238066) Journal

      "The days of engineering-led technology companies are coming to an end," Mr. Dell declared.

      It doesn't then follow that Dell will prosper. I bought my last computer at Walmart [walmart.com] for $200. That should worry him.

    • by UID1000000 (768677) on Monday May 24, 2004 @12:31PM (#9238882) Homepage Journal
      "The days of engineering-led technology companies are coming to an end," Mr. Dell declared.

      This reminds me a lot of IBM and their IBM Compatible PC days. It's exactly what Dell is doing is what allowed others like Compaq to grow into the PC market. They took what was compatible to the IBM sys arch and built around it. Eventually IBM started playing the engineering-led game where they wouldn't release specs until they had their IBM PCs on the market then the PC-Compatibles could go after it. Innovators are kind of setting themselves up for competition like this when they're keeping the innovations a secret. Back to Compaq, for a while they innovated the items that were sold with their PCs but just like Dell they pushed it back on the MFGs to do the R&D.

      Look where Compaq is now. In the belly of the beast that said Dell isn't doing anything. It's just distributing other people's products.. That's what Ms Fiorina said and that is exactly what Compaq was before HP bought them up.

      Mr Dell watch out. Your company might be next.

  • Innovators Rule (Score:5, Interesting)

    by HBPiper (472715) on Monday May 24, 2004 @11:06AM (#9237912)
    Provided they can outlast the drain on their development dollars and recoup the investment. I think Iridium was a good test for that. The people that bought them out for 10 cents on the dollar are making a killing now.
    • Unfortunately the real wielders of power in the stock market (insurance companies) are (at the moment) risk adverse ... so a company like dell which does not invest in risky R&D is far more attractive that a company that like HP which is investing in R&D. Given that the current economic environment is likely to persist for the next 5 years, for a lot of R&D companies the question becomes "can we survive 5 years of lack luster investment in the hope that we will rake it in when the the market is
    • by mosel-saar-ruwer (732341) on Monday May 24, 2004 @12:05PM (#9238595)

      Innovators Rule - Provided they can outlast the drain on their development dollars and recoup the investment. I think Iridium was a good test for that. The people that bought them out for 10 cents on the dollar are making a killing now.

      I know this ain't the politically correct thing to say on /., but:

      Innovators Rule - Provided
      there is a system of patent law, copyright law, and trade secrets law to protect their innovations.
      Without those legal protections, the intellectual property of innovators is essentially worthless.

      • by JWW (79176) on Monday May 24, 2004 @12:49PM (#9239076)
        I don't really have a problem with patents on THINGS, but I do have a problem with patents on algorightms and procedures.

        The process of selling something by clicking a mouse button should never, ever have received a patent.

        But by all means software should be able to be copyrighted and where you can make it work, it should be able to be a trade secret also.
  • by krymsin01 (700838) on Monday May 24, 2004 @11:09AM (#9237941) Homepage Journal
    I'm sorry, but am I missing something here? There will always be Innovators and there will always be copiers. It really doesn't matter, since the two are in a mutal parasitic relationship. The innovators make some money when they come out with something new in a market that's flooded with clones, and the copiers make money by driving down the bottom line for their clones...
    • There will always be Innovators and there will always be copiers.

      read: There will always be innovators and there will always be Microsoft.

      All kidding aside, this is nothing new. Xerox invented. Apple copied Xerox, and Microsoft copied Apple. It's the same with Japanese automobile makers. The innovator usually never reaps the rewards because the true potential of their innovation is only realized by an outside pair of eyes.
      • by OwnedByTwoCats (124103) on Monday May 24, 2004 @11:33AM (#9238191)
        Such slander. Xerox invented. Apple bought the rights to the invention from Xerox, improved it dramatically, and launched a revolution. Microsoft copied Apple.

        Japanese automobile makers led in the development of fuel-efficient, low-polluting engines. Look at how long it took GM, Ford, and Chrysler to sell cars with engines that had 3 or the now standard 4 valves per cylinder.

        Japanese automobile makers took American quality control approaches, and actually applied them. And made better cars.

        My next car (my current ride has an American brand, was built in Kansas City, but was based on a european design; I've had it for 7 years, and it was 9 months old when I bought it. 150,000 not-so-trouble-free miles.) will be built in Kentucky or Ohio.
        • by Anonymous Coward
          >>Japanese automobile makers took American quality control approaches, and actually applied them

          After WW2, Dr. Deming [deming.org] was sent to Japan to help in reconstruction. In America, Deming's ideas were universally ignored. The Japanese were led to believe he was the US's leading quality engineer.

          And the rest, as they say, is history.
        • by Anonymous Coward
          My next car (my current ride has an American brand, was built in Kansas City, but was based on a european design; I've had it for 7 years, and it was 9 months old when I bought it. 150,000 not-so-trouble-free miles.) will be built in Kentucky or Ohio.

          Your current ride is a 1997 Ford Contour SE, with a 2.5 liter V6 engine and an automatic transmission. You've had the head gaskets replaced, and the blower motor resistor pack replaced (twice). You've also had warped brake rotors and replaced the O2 sensor

      • by Short Circuit (52384) <mikemol@gmail.com> on Monday May 24, 2004 @11:38AM (#9238241) Homepage Journal
        The innovator usually never reaps the rewards because the true potential of their innovation is only realized by an outside pair of eyes.

        I disagree with the first part, but agree with the reason. Take PK-ZIP, Ethernet, RS-232, and Eclipse for example. Their creators released the specifications to the world. Suddenly, their product is compatible with a lot more machines out there, so people will buy products centered around it.

        • ZIP became the standard, and PK's closed version of the library was the fastest around for dealing with it. (A big deal when you consider the speeds of commodity hardware at the time.
        • Ethernet still is the standard. There's still lots of money to be made in hardware implementations.
        • RS-232 isn't the standard on the home PC any more, but it's still widespread in industrial equipment. Analysis tools are still big money there.
        • IBM's Eclipse is close to a de facto standard. IBM can still make money off it by developing plugins.


        In fact, that's one of those business models that was mentioned in the OSS compatibility handbook [ ;) ] Slashdot linked to last week.

        The point is, innovation can survive in a copycat-filled world. You ju
    • No, you're not missing anything. The business/technology press makes money by selling advertising, and conflict stories sell their publications. It's obvious that Dell needs innovators to show them the way, just as it is obvious that innovators can never completely dominate a market as their innovations become commoditized. But don't tell that to the press:

      May 27, 2004: "Michael Dell announces that sleeping with underage gerbils is the only path to transformative strategic insights."

      May 28, 2004: "Carly Fiorina declares death of gerbil-inspired strategy and outlines new meerkat-based inspiration management system."

      Who needs the Enquirer?

  • Innovators? (Score:3, Insightful)

    by sulli (195030) * on Monday May 24, 2004 @11:09AM (#9237943) Journal
    Ex-innovators. Under Carly HP is a shadow of its former self.
    • Re:Innovators? (Score:4, Interesting)

      by PsychoSlashDot (207849) on Monday May 24, 2004 @11:43AM (#9238293)
      You could view it that way. Or you could look at some of the products HP has rolled out in the printer category the last couple years.

      For instance, the HP Laserjet 3330mfp. It's a multifunction device just like everyone else's. Only... you can throw an IP print server on it, and make ALL of its functions available to everyone on your network. Oh, and ALL of its functions work simultaneously. So one of your users can be faxing through the unit while another is scanning from the glass and a third is printing.

      In a world full of USB-only multifunction devices where you're lucky if you can share the printer function peer-to-peer due to proprietary "status monitor/sender" panels and such (Canon L6000 for instance CANNOT be redirected), this product is astonishingly innovative.

      I should state that I am an HP-authorized warranty repair tech. I don't work for HP, but I do service their gear.
  • by Anonymous Coward on Monday May 24, 2004 @11:09AM (#9237946)
    Will the pace of improvements decrease as fewer companies are willing to invest in research and development? It seems to be the case for the last 4 years.
    • by millahtime (710421) on Monday May 24, 2004 @11:19AM (#9238047) Homepage Journal
      Will the pace of improvements decrease as fewer companies are willing to invest in research and development? It seems to be the case for the last 4 years.

      There are at least 2 companies that will innovate. IBM and Apple are all about it. And in many ways for years they have come up with many of the computing advancements that a few years later show up for the rest of the market.
    • You can draw analogies to other industries but the PC industry has certain dynamics. Chip makers are the innovators, companies like Intel, AMD, Via, ATI and NVIDIA. There's nobody for these people to copy except from each other and from their own previous work. OEMs buy the chips and build video cards and motherboards. PC OEMs buy those parts and build systems. This article was specifically about printers, and here the debate is really between in-house vs. outsourcing. Dell pays Lexmark to license their pri
  • by night_flyer (453866) on Monday May 24, 2004 @11:10AM (#9237955) Homepage
    I need to get out of the house more often...
    • by Anonymous Coward
      Nope, they spray paint Lexmark printers. Every unit they sell is one less that Lexmark did, not HP.
  • New logos (Score:5, Funny)

    by FattMattP (86246) on Monday May 24, 2004 @11:11AM (#9237959) Homepage
    HP
    Invent

    DELL
    Copy

    Blah blah lamesness filter blah blah blah.

  • VC input (Score:5, Interesting)

    by Smallpond (221300) on Monday May 24, 2004 @11:12AM (#9237966) Homepage Journal
    VCs will generally not invest in companies that don't own their own IP. I'm not saying they know everything, but, to paraphrase Vizzini "never bet against a VC when money is on the line".
    • Re:VC input (Score:3, Insightful)

      by 2names (531755)
      "never bet against a VC when money is on the line"

      Unless the economy happens to be in an investment frenzy, which is cyclical. Just ask the dot-com losers...

      "...once I built a dot-com, made it run, brother can you spare a dime?"

  • by ShatteredDream (636520) on Monday May 24, 2004 @11:12AM (#9237971) Homepage
    The real question is, whose technology will Dell copy if Apple and HP fall apart?
  • Actually... (Score:2, Funny)

    by Kazymyr (190114)
    Dell innovating? That's unpossible!
  • HP? An innovator? (Score:4, Insightful)

    by Em Ellel (523581) on Monday May 24, 2004 @11:12AM (#9237977)
    Boy do things change... well at least labels.

    HP was always known for not jumping on latest technologies and only entering market once it is well established, improving on existing technologies. I mean these are the people who passed on original Apple designs and were still proud of it when Apple became successful. They were by far not the first ones to enter laser printer market. It was part of their philosophy.

    Now they are the innovators. Curious times. But then again, if Microsoft can claim to be innovators, HP is way ahead of them there.

    -Em
    • by Anonymous Coward
      HP was always known [...]

      for creating new microchip designs, amazingly reliable and fancy sensors, and more. They lead in fields where others refused to go (medical, industrial, and nuclear control systems).

      Now HP's marketting team sucked ass, but that's a bit different.

      • Re:HP? An innovator? (Score:5, Interesting)

        by falcon5768 (629591) <Falcon5768@@@comcast...net> on Monday May 24, 2004 @11:46AM (#9238346) Journal
        exactly HP has been very inovative, it just might not be tech you see, but quite possibly is in things you own but you dont know about it being there.

        Its just like how you might using a PowerPC chip co-developed by Apple/IBM and Motorola but dont realize it because its in your cellphone or PDA or even your GameCube...

        The difference between HP and Dell is that HP is diverse, even Microsoft isnt JUST in the OS field but does other work.... but if computers are the only thing that you think about when you think technology, you dont realize that. Dell just jumps onto the bandwagon and buys things from other people and puts them together and says they built it.... lets not forget those "printers" are Lexmark printers rebadged. This is the exact same phillosophy Apple used back in the 80's and early 90's with their inkjet printers. They where Canons and HP's.

    • by mt2mb4me (550507) * on Monday May 24, 2004 @11:45AM (#9238325)
      They were the first company to make laser printers with a ozone filter small enough that you could fit your laser printer on the desk, [hp.com] also the first to come out with ink technology [hp.com], infact I still have my thinkjet, and it still works.
  • Mature products (Score:5, Insightful)

    by rueger (210566) on Monday May 24, 2004 @11:12AM (#9237979) Homepage
    Who gets to win in the marketplace? The Innovators who invest in R&D like crazy or those that just take cost out of standard products.

    The innovation was in creating products that filled a formerly unidentified need. Those lovely early HP calculators are an example. The first reliable laser printers are an example. The personal computer is an example.

    When each of these was being developed, the technology industry - heck the whole personal computer industry - was in its infancy, and just about anything with a semi-conductor as "innovative".

    Those are now mature products, which is where companies like Dell appear. Their role is not to address needs that other companies haven't seen, but to build a business that exploits mature technology with identified market.

    Innovation will come from left field, and will involved products or processes that few of us will see coming.
    • HP did not produce the first reliable laser printer. That would have been Apple, with the LaserWriter, in 1985. Mechanicals were supplied by Canon, parts from their small copiers.
      • Re:Mature products (Score:3, Informative)

        by green pizza (159161)
        HP did not produce the first reliable laser printer. That would have been Apple, with the LaserWriter, in 1985. Mechanicals were supplied by Canon, parts from their small copiers.

        There were reliable laser printers before the Apple LaserWriter, but the LW was designed from the ground up to support networking and Postscript-based text and graphics. The digital components were 100% Apple-designed with help from Adobe.

        The LW is important because it enabled, in 1985, offices of Macs to cheaply network their m
  • by n1ywb (555767) on Monday May 24, 2004 @11:12AM (#9237981) Homepage Journal
    All I can say is "Thank God I've still got my LaserJet III." I'm sure that it will long outlive every POS printer that's being sold today, and I'm sure I'll always be able to find toner cartridges for it.

    I hate to see HP forced into competition with a company like Dell. Dell is the Walmart of computer hardware, it's cheap, it probably works okay for a while, but but eventually it's gonna crap the bed and you'll have to buy a new one. HP stuff USED to last forever, but now they're starting to sell wally-peripherals as well. It all goes back to our disposeable culture. But some of us (like me) would much rather pay a little more for something that will last a lot longer, or even pay a little less for something that's already old but that will STILL last a lot longer (like my LJ III).
    • by InThane (2300)
      I work at a relatively small company (~120 users) and we're pretty much standardized on Dell equipment. Other than the laptops (which IME are a crapshoot servicewise no matter what company you go with - too many "vertical distance adjustment difficulties") we have had one service call to Dell in the entire time I've worked here, for a failed CPU fan.

      Some of the machines are over three years old.

      I'm impressed. I may not like Dell as a company, but as far as making a reliable product goes, they've done pr
    • Dell doesn't want their printers to last that long. They want them to fail so that you buy another in a few years. My HP LaserJet 1100 has been excellent. I've had it four years and I haven't even had to replace the drum and toner yet. I hate to think how often the ink would have dried out in an inkjet in that time. It just sits waiting for those urgent occasions when I really need. The only issue was the mutli-feeding problem (there's been a class action lawsuit over that too) and HP sent me a very s
    • Of course, your III has a Canon SX engine, so the most important part wasn't made by HP...
      I'm still happily using a IID so I can save paper by printing on both sides.
  • I know that the majority of us are strongly opposed to software patents, but where would HP be right now without patents?

    Clearly the only incentive for HP to be "innovators" is to be able to market the product without competition for a period of time. How are we opposed to patents, but yet I'm sure most of us will go with HP on this issue, not Dell.

    Does the issue have to do with the scope of software patents? And what will likely be the inability of patent offices to find "prior art"?
    • by Anonymous Coward
      "but where would HP be right now without patents?"

      Same place as they are today.

      Patent the printer, copyright the printer driver.

      But patent the printer driver? Only someone not versed in the art of software development would say something so ridiculous. And I think I'm putting that very kindly.
  • HP invents? (Score:3, Interesting)

    by telemonster (605238) on Monday May 24, 2004 @11:13AM (#9237988) Homepage
    Haven't read the article but I don't personally consider HP an innovator anymore. When someone says HP, I think "sore sight for a once great American Company." Morale is supposidly in the toilet in the American shops. Maybe morale is better over in India.

    HP's test equipment is nice, and HP printers are great. I actually liked Compaq's x86 servers, and hated Compaq's non-business desktops. Never liked HP desktops, never seen much in the way of HP servers outside of the HP-UX systems. Hockey-PUX is wacked, I'd prefer Solaris or IRIX.

    Toss the Dell servers in the trash where they belong, give me a used Compaq server over a new Dell rackmount turd any day. I guess Dell desktops are okay, but you really get what you pay for.

    I'm not quite sure why Dell is so popular. Poor Gateway, why are they failing when Dell manages to ship such low grade product and run such poor customer service. And where did Austin, Northgate and Swan go.

  • by JosKarith (757063) on Monday May 24, 2004 @11:14AM (#9237994)
    Well, my money is on the company whose ink's price by volume is seven times the cost of a good Dom Perignon.
  • by MrIrwin (761231) on Monday May 24, 2004 @11:15AM (#9238007) Journal
    ....is patents. The patent system needs to be re-written so that it protects real innovation and not real big legal budgets.

    Failing this there is a natrual advantage to innovators in legal regimes that allow local embryonic development without legal hassle (inventors get to eat)!

  • by bwt (68845) on Monday May 24, 2004 @11:16AM (#9238014) Homepage
    Jim Morgan, who used to be the CEO of Applied Materials used to say there are three phases of competition: innovation, differentiation, and commoditization. AMAT wanted to win in the first phase and make do in the second and get out of the game in the third.

    A company needs to pick which phase it will focus on in and stick to that. If HP wants to be an innovation company, they need to know when to bail out of a market with no innovation left (like printers).
  • by ChopsMIDI (613634) on Monday May 24, 2004 @11:16AM (#9238015) Homepage
    The Innovators (HP) could always just raise the licensing prices to the copying companies (Dell).

    Without companies like HP that can afford to dump large sums of money into innovation, the industry would be pretty stagnant.

    That's exactly why patents exist...to promote innovation....and to protect the innovators from someone who could just take the technology the innovators worked so hard to develop, then mass-produce it for less (and without the R&D cost), effectivly putting the innovators out of business.
  • by SlashDread (38969) on Monday May 24, 2004 @11:16AM (#9238017)
    No commodoties would *exist* as such, without some *invention*(*) first

    Dell and MS are leeches, and as such they work. Now, without any hosts, leeches die.

    "/Dread"

    (*) I use the term loosely.
    • Dell and MS are leeches, and as such they work. Now, without any hosts, leeches die.

      That's a funny way to look at the free market and public domain. Companies that want to innovate do so, or try to do so, and their R&D costs are reflected in the cost of their products.

      This is where intellectual-property protections come in. In the absence of any such, some copycat would soon (this "soon" will be important later) undercut the innovator and destroy him in the market. But in markets where there is

  • by linuxtelephony (141049) on Monday May 24, 2004 @11:17AM (#9238028) Homepage
    Sadly, I see Dell's quote as probably accurate. And, one of the things the patent system was supposed to help prevent. The innovators were supposed to be able to profit (for a time) from their efforts. Assuming bad business practices and/or poor financial handling, they should be able to stay in business. Even if they are not the market leaders - their technology would be, and they'd still be making revenue from the licensing.

    It's the mentality of the Dell's that are hurting us. Innovation is required. Yet, to compete with the Dell's, innovation (and R&D) often suffer because R&D costs money. The companies that truly innovate, that really study and work hard with R&D, will have a harder time in our current greed-driven, shareholder value is the only goal mentality market place. Why? Because the R&D takes money from profits, making margins smaller. Therefore, the copycats (Dell) have better margins because the ride the coat tails of the innovator, without having the spend the money to innovate.
  • by duffbeer703 (177751) on Monday May 24, 2004 @11:17AM (#9238029)
    One of the problems with a pure-manufacturing business model is that without R&D, you are dependent on your competitor's innovations to get out of the "valleys" when demand for current products slackens.

    Dell is one of the last great US manufacturers -- everyone else has contracted everything out and become a drop-shipper.

    If you look at the great manufacturing businesses of the past, you'll see that once demand starts to get quenched, the business dies. Dell has a need to push out huge amounts of product to make up for the deflationary PC industry... which is a strategy that will eventually catch up.
  • Dell printers...??! (Score:5, Informative)

    by adrew (468320) <adamcdrew@y[ ]o.com ['aho' in gap]> on Monday May 24, 2004 @11:20AM (#9238056)
    Dell doesn't design its own printers! They're simply run-of-the-mill Lexmark units with a Dell logo. But here's the shady part. The Dell printers are modified so that only the special Dell cartridges fit. The Lexmark cartridges had the same pin configuration, but the Dell cartridge holders are shaped a bit differently. If the cheaper Lexmark (or generic) cart is modified a little bit, they work just fine.

    I have a laser printer--but Canon seems to be the best deal in inkjets right now. Black carts for most of their printers are only like $7.
  • One little thing ... (Score:3, Interesting)

    by JSkills (69686) <`moc.llabfoog' `ta' `slliksj'> on Monday May 24, 2004 @11:21AM (#9238068) Homepage Journal
    I know everyone is saying HP innovates and Dell copies. I won't dispute that.

    However, one thing I noticed many years ago, when Dell first became known, was that they built their PC cases with simple one-screw-and-open panels pretty much by default. This was a stark constrast to the cases you'd get from any other PC maker. What a joy to be able to easily access the innards of the PC. I think a lot of companies make cases this way now. I'm not sure that Dell started it, but they were the first I'd seen do it and Compaq and HP definitely were *not* at that time ...

    • by attemptedgoalie (634133) on Monday May 24, 2004 @11:43AM (#9238287)
      For a long time it was considered "bad mojo" to make a machine that was easy to service. That implied that the system NEEDED to be serviced, so we'd better make it easy. In the time I've been paying attention to PC systems, it's gone from needing special tools to open, all the way to machines that can be disassembled with one finger. (Not that finger, people.)

      IBM had handles on some of their systems, and they were ridiculed because that must have meant that they needed to be carried in to service...

      Dell wasn't the first, but it sure was a kick in the butt to the other manufacturers.
      • by chiph (523845)
        The IBM ProPrinter was built in it's Charlotte NC facility. The plans were drawn up, the prototypes were complete, the samples had been shipped -- the only problem remaining was that the robotic assembly line wasn't finished.

        So IBM hired temp workers to come in and assemble the printers manually. What they discovered was that parts that had been designed for automated assembly made it even easier for humans to put them together. It even made it easier for the printers to be repaired in the field. Their
  • Short-sighted (Score:5, Insightful)

    by ErichTheRed (39327) on Monday May 24, 2004 @11:21AM (#9238072)

    Thinking like this stagnates the industry. Copying existing technology is easy money, but don't forget that some aspects of PC design are nearly 25 years old. The market is ripe for something new...and the company that comes up with something other than a variation on a theme will make lots of money in the long run.

    This is the same kind of thinking that has CIOs everywhere shipping jobs off to outsourcers; they figure one sysadmin is much like the other. Technically they are, but if you train your staff well, they learn much more about your core business than any outsourcer would.

    Especially in tough times, it's tempting to cut R&D budgets. However, comapnies that abandon basic research do so at their own peril!

  • by pedantic bore (740196) on Monday May 24, 2004 @11:22AM (#9238076)
    Note that what Dell is selling is "Dell-branded" printers. Dell doesn't manufacture printers -- Dell doesn't manufacture much of anything (at best, they assemble things). HP, on the other hand, actually makes printers. (Who knows, maybe some of the printers that Dell sells will be made by HP some day.)

    Dell has sold printers for a long time. As far as I can tell, they target buyers who like to buy everything through one web site. The peripherals they sell are nothing special, and the prices aren't that good, but it's easy and convenient to buy everything with one click.

    People who want the best are usually willing to shop around for it. Hopefully HP won't be run out of business if Dell is successful in undermining their market, and the next time I want a good, dependable printer I won't have to buy a re-branded Lexmark or some other similar junk.

    • by Technician (215283) on Monday May 24, 2004 @12:22PM (#9238764)
      Hopefully HP won't be run out of business if Dell is successful in undermining their market, and the next time I want a good, dependable printer I won't have to buy a re-branded Lexmark or some other similar junk.


      I don't think that will be a problem. Dell is another middleman. I have an HP722 and Laserjet III. My wife bought a new DEL computer and the companion all in one printer. The cartridges for both are about the same price. I can get the HP carts with no postage and no wait just down the street. S&H makes the dell carts cost more. The DEL carts are about 1/4 the size of the HP carts. The DEL carts don't mention anywhere (website included) what the estimated yield or amount of ink is. It's obvious to anyone replacing a printer that the DEL with the itty bitty carts is no bargan. My HP 722 printer and Laserjet is on the local network using a Hawking printservers (great investment!). The DEL printer is now just a scanner for the wife's computer. We have no plans on replacing the cartridges when they expire. (added bonus, the HP black cart is easly refilled). The DEL all in one could not be used as a replacement for the HP inkjet on my network because it has drivers for WIN 2K and WIN XP only. That means it is incompatible with both our laptops, and 2 other PC's on the network. None of them run the required OS. DELL printers are not a high volume (or moderate volume) cost effective printing solution. DELL printers may be OK for the lady of the house to print the occasional E-mail, and scan a baby photo, but little else. More cost effective printing can be found almost anywhere else. DELL is not competitive in printing value.

      Unless HP goes for smaller carts at higher prices, they have no worries from DELL.
  • This is why Dell (Score:4, Informative)

    by WCMI92 (592436) on Monday May 24, 2004 @11:23AM (#9238090) Homepage
    Is NOT a true first tier company, no matter how much money they paid Gartner to say they are...

    Only IBM and HP qualify as such to me in the PC based server world...

    We recently had to scramble to do a firmware fix for a customer who had bought Dell servers rather than the HP ones we recommended...

    The fault? A bug in Dell's RAID card firmware that would cause the card to eventually destroy the data beyond repair... A bug of the type that would NEVER get out the door in a HP or IBM product... Then there was the server that had the power supply defect that smoked and died... Dell does not do anywhere NEAR the quality control HP or IBM does.

    Dell appeals to those who buy strictly on price.

    You get what you pay for.... HP ProLiant is by far my favorite server line, and it's not really that much more expensive than Dell.
    • Re:This is why Dell (Score:4, Interesting)

      by edremy (36408) on Monday May 24, 2004 @11:42AM (#9238277) Journal

      The fault? A bug in Dell's RAID card firmware that would cause the card to eventually destroy the data beyond repair... A bug of the type that would NEVER get out the door in a HP or IBM product...

      Don't be so sure. A few years ago my research group got a couple of brand new, top of the line RS6000 workstations. Set them up, ported the various apps and started running.

      Oops, they fell off the network. Hmm. Only way to get it back was to reboot. They promptly fell off the network again. Anytime you tried to move a big file between machines they'd die.

      IBM had removed a hardware check for malformed packets in the latest and greatest ethernet cards. Hey- they had software correction in the firmware, that would work fine. Except that nobody had actually bothered to test it, and it didn't work in some cases.

      I agree IBM is better than some of the competition, but I don't trust anyone.

  • Why haven't they made an OS to compete with Microsoft. Oh, yeah, they're building PC's to someone elses standard.....and there was that UNIX thing......
  • by ThinWhiteDuke (464916) on Monday May 24, 2004 @11:27AM (#9238140)
    In a given market, there are two ways to have power: either you own the product, or you own the customers. Depending on your industry's maturity and rate of innovation, the balance shifts between the two. If Dell can assemble products that compare with HP's just by using parts from HP's competitors, that means that HP is not innovating enough. Or maybe all major improvements have already been invented in the printer business.

    Michael Dell says that his company is not a technology company, it's a logistics service provider. He's right, of course. Logistics become a key issue when products become commodities. Ironically, the frantic race to hardware performance only stresses the critical importance of the logistics.
  • by sjbe (173966) on Monday May 24, 2004 @11:34AM (#9238198)
    They made the decision to make the printer as cheap as possible and instead make their money selling ink. It's a very similar strategy to Gillette's famous (almost) give away the razor and sell the blades strategy. However this really means HP is in the ink business moreso than the printer business. And ink is a commodity far more than cheap printers. And the printers aren't really highly differentiated either. HP printers are good but most of the time there are competing products that are technologically just as good. It might be the case that HP chased profits and marketshare but opened themselves to competition from Dell in the process.

    If I were HP, I would be very concerned about my cost structure right now. Dell is a reseller of commodity products. Yes they do some R&D but realistically they mostly just manufacture and resell products developed elsewhere. In a battle of selling commodity products, Dell's cost structure is just better. Dell actually gets paid days before they have to pay for products and they have only a few days of inventory on hand at any time. HP does pretty well with commodity products but they are much more similar to IBM than to Dell with multiple divisions, heavy R&D, high end servers and support organizations. This isn't a bad thing necessarily but it does mean that they may eventually have to exit the low end printer business if it becomes any more commoditized much like IBM has had to move upmarket in PC and focus on business customers.

    Fortunately for HP, they do have a great brand, strong R&D and a pretty substantial computer business of their own. HP is hardly defenseless. But if this becomes a pure cost battle, HP probably will lose. I think the most interesting part of this battle will be to see how much brand matters here.
  • by anti-NAT (709310) on Monday May 24, 2004 @11:38AM (#9238231) Homepage

    because the word "innovate" means to introduce changes and new ideas [emphasis mine] [cambridge.org]. Both HP and Dell are innovators.

    What HP supposably does, or used to do, and Dell doesn't do, is invent, which means to design and/or create something which has never been made before [cambridge.org].

    Innovators will cease to exist if invention or discovery never happens, as there will not be any new idears or changes to introduce.

    Mr Dell has made a common mistake, most people aren't aware of the difference between innovate and invent.

  • by sphealey (2855) on Monday May 24, 2004 @11:39AM (#9238248)
    HP stopped innovating in printers about 5 years ago (say 1998 or so) and since then has just been releasing variations that require new, propriatary toner cartridges every 18 months. Basically a razors/blades scam.

    So, this contest doesn't mean what you think it means.

    sPh
  • by Clueless Moron (548336) on Monday May 24, 2004 @11:40AM (#9238257)
    I got fed up with insanely priced inks, printheads that clog, wasted printouts because one of the damn colours ran out halfway through, and printouts that dissolve when the tiniest bit of moisture contacts them.

    So I threw out my last POS inkjet printer years ago, and got a real laserprinter (HP LaserJet 4000TN) instead. The pinnacle of b&w printing. Fast. Stunning quality. Toner cartridges so large that one will last me around 10 years at my current rate of consumption.

    And colour? If I want that, I put it on a floppy and get it printed at the photoshop down the street. 60c canadian (about 40c US) for a 4x6 printed on real kodak photo paper, by a real dye sublimation printer that costs as much as a fancy car.

  • Innovation? (Score:4, Insightful)

    by Mage66 (732291) on Monday May 24, 2004 @11:44AM (#9238305)
    Not sure of the value of that... I really prefer my HP Laserjet IIIP and my old Laserjet II to just about ANY printer on the market today (for a B&W Laser Printer). Work horses over 10 years old and still going. And while I like the little 1210PSC I just bought. My Deskjet 540 is still also plugging away. Newer printers from Epson and Lexmark are in the trash heap as uneconomical to repair, and were too flimsy to hold up long. So there's a trade off there... I'd like to see HP reintroduce a "Classic Line" of products. Instead of innovating all the quality out of their line...
  • by PhilipOfOregon (771069) on Monday May 24, 2004 @12:08PM (#9238631)
    Dell DOES innovate! It innovates on COST instead of PERFORMANCE.

    Dell pioneered just-in-time manufacturing -- they didn't ask for parts for your computer until they had your order in had. No inventory to store means no warehouse to pay for!

    Wal-Mart innovates, too. There's a reason their IT department is one of the biggest in the world. They want to know what each store has on each shelf. Again, they're trying to minimize total cost.

    The Slashdot crowd cares more for performance, but remember that there are many more customers who care about COST innovation.

    • by ecklesweb (713901) on Monday May 24, 2004 @12:31PM (#9238887)
      I don't think it's so much that Dell innovates on cost instead of performance...it's that Dell innovates on supply chain management rather than on product design and manufacturing. Keep in mind - Dell's supply chain innovations not only made custom-built hardware cheap, it made it realistic. What good is cheap custom-built hardware if it takes three months for the custom order to arrive at the consumer's door?

      I think Dell is just as concerned about performance as cost, it's just that Dell is a management company and HP is (was?) an R&D/engineering company.

      Most interesting thing of all to me is that the two compete in the same market while coming from such totally different business plans.
  • by ForemastJack (58751) on Monday May 24, 2004 @12:20PM (#9238750)

    Disclaimer: I've got an MBA ('m also a programemr).

    Dell's quote is this: "The days of engineering-led technology companies are coming to an end."

    It looks like the basic opinion on this here at /. has broken down into two camps:

    1. Yep; or
    2. That's stupid and shortsighted.

    Fact is, both of those are right. It is shortsighted; but within the short-run time frame -- and the business sphere HP and Dell are operating in right now -- he's exactly right. Hell, HP knows it, too -- that's why they're in trouble and know it.

    As the article points out, there are two types of companies: innovators and copycats. In the short run, the copycats will always eat the innovator's lunch. Naturally. They've got lower start-up costs, lower R & D costs, lower overhead all around. Thus, they undercut the innovator's price and outsell them.

    This trend is accelerated when quality becomes fairly consistent accross the board. That is, when the copycats are still ramping up, their quality is poor. Thus, in the old days you would hear, "Spend the money for the HP -- brand X is cheap but sucks." You don't usually hear that, anymore, regarding printers. Sucks for HP.

    But here's the kicker: when the Next Big Thing comes around, who will it come from? Dell or HP? Yep, HP. Innovators will survive not by getting pulled in to a lowest-price mud-fight -- no, they'll survive by innovating their way out of trouble. In fifteen years, do you think HP or Dell still be here? My money's on HP. Dell's a great commodity company: pretty good boxes, cheap. So was Tandy, and where are they?

    It's the same thing with IBM. IBM has been a leader in nearly every single office productivity market they've competed in for, what, like 50 years? Typewriters, word processors, servers, PC's, etc. Big Blue has out-lived nearly every competitor who was at one time undercutting their market. Why? Because they innovated into the next Era -- and the copycats got caught in a mass extinction.

    It's evolution on a corporate scale, baby. Those that adapt to the changing market, survive. Those that don't, don't. HP and IBM change the marketplace. Dell just hangs on and hopes they don't change it too much.

    So Mr. Dell's right, for now, and doomed, eventually.

  • by AmericanInKiev (453362) on Monday May 24, 2004 @12:21PM (#9238760) Homepage
    Yeah - we don't like it when obvious stuff is patented premptively - but obviously having a Dell simply copy whatever it sees in the market will stifle little guys who say - why invent if the end result is merely to inspire the monsters to clobber you in the market place.

    A position of equity which suggests that all people are entitled to equal degrees of intellectual freedoms and rights without regard to the ability to pay for legal protections should be the foundation of thought in IP.

    Allowing money to dictate the outcome of IP conflicts is dangerous to the last bastion of American productivity - ideas.

    AIK
  • by monopole (44023) on Monday May 24, 2004 @12:36PM (#9238947)
    HP's quality has dropped by orders of magnitude since Carly took over. HP used to be highly proprietary, high priced, but lasted forever. Now HP shoves out marginal product with high failure rates, HP still beats the hell out of Lexmark but simply can't compare with the quality of Epson. In essence it's the Ford Pinto versus the GM Corvair when Epson is pumping out Honda Civics. I bought a cheap HP when my Epson 400 gave out, The quality of the printing was marginal, the registration was horrific, and the paper feed mechanism jammed every few pages. When printing CD labels I had a 25% wastage rate. As soon as I had amortized the cost I ran out and got an Epson C84, runs like a tank and generates spectacular print quality, I haven't had a jam in 6 months!
    HP seems to be following the path of Polaroid and Xerox, once great innovators who have been mismanaged to oblivion.
    Dell is worse with Lexmark (Ugh!) printers, but that does not exonerate HP from destroying a once great brand.
  • by plopez (54068) on Monday May 24, 2004 @01:19PM (#9239369) Journal
    Is that Carly 'Angel of Death' Fiorina's strategy at HP is to copy Dell's PC strategy! And when it was first developed Dell's strategy was innovative!

    What we are seeing is an industry that is rapidly becoming as bad as the US auto industry in the 60's and 70's: crank out the crap then walk away from the customer as fast as possible.

    My prediction is that there is a great opportunity here for true innovators who care about great products to step in and blow them out of the water.

    The next great business model will not be created by monkeying Dell or HP. Look at how the US auto industry was gutted in the 70's and 80's.
  • by mveloso (325617) on Monday May 24, 2004 @03:11PM (#9240366)
    Dell is a distribution channel, plain and simple. Its costs are minimized, there's no R&D, etc. Unlike Wal-Mart, Dell rebrands many of the items that it sells. Wal-Mart does too, under private labels, but for some reason Dell has been able to create "Dell" as a brand, unlike most white-box builders.

    Dell now sells a ridiculously large amount of computer equipment: $11 Billion last quarter, $44 Billion on an annualized basis. They sold as much stuff as Microsoft last quarter, and they made 50% less. They've cut the monopoly premium to 50%, with margins of about 23%.

    Plus, there's no reason to think they're going to stop anytime soon. They are the low-cost provider, period.

    New technology? Probably not. But they sure are a cheap place to get boxes.
  • by payndz (589033) on Monday May 24, 2004 @05:25PM (#9241878)
    Even less appealing than before, isn't it?

I use technology in order to hate it more properly. -- Nam June Paik

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