Innovators vs Copiers: HP vs Dell

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.

Re:Dell makes printers?

[Anonymous Coward]

Nope, they spray paint Lexmark printers. Every unit they sell is one less that Lexmark did, not HP.

Dell printers...??!

[adrew]

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.

Re:Mature products

[OwnedByTwoCats]

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:When you're a commodity-oriented company...

[bandrzej]

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.

On Dell's reliability.

[InThane]

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 pretty well by me.

This is why Dell

[WCMI92]

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.

Tough times

[SolidCore]

Dell will have a tough time competing in the printer space because it does not have the proper distribution channel or the right business model for the way people use printers.

"If my daughter runs out of ink while doing a homework assignment, I need that ink cartridge right now. I can't wait 24 to 48 hours" for the cartridge to ship. That dynamic means we need to go to Office Depot...and buy the cartridge right away.

HP CUSTOMERS ARE MIGRATING TO SUN

[imidazole2]

lol... thats the banner I have on the top of this page... lol ^^^

Dell are innovators too,

[anti-NAT]

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.

Re:missing something here....

[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.

Re:Then who will innovate?

[homer_ca]

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 printer technology. If Lexmark stopped selling to end users they'd still have Dell as a customer.

Re:When you're a commodity-oriented company...

[Anonymous Coward]

> 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.

Maybe for you, but not for the majority of people. Witness Apple vs Dell sales.

Re:Mature products

[mt2mb4me]

check it out it was 1984 when hp came out with their laserjet. And also, to a previous post, Cannon, makes parts of the laserjets, but not the technology behind them, (read: processors, and other parts)

Business Models

[meanroy]

The Motly Fool has some interesting comments [slashdot.org] on R&D. From the article:
"Still, not all companies are the same. Dell (Nasdaq: DELL) metes out only 2% of sales on R&D, but continues to keep investors very happy"
"However, patents don't necessarily translate into money-making products. Think of Xerox (NYSE: XRX). For years, the company's PARC research center developed one breakthrough technology after another, but failed to make money on them. Its inventions, like the laser printer and the mouse, are now in the hands of competitors."

This is not strictly true. (I was at Xerox PARC when they spun off SpectraDiode and still have my Alto manual)
Xerox had(has) MANY successful spinoffs, as well as many dismal failures. But thats another story.

Companies may do very well through acquisitions of technology in liu of R&D of their own.

Interesting study in Sweden:
"The study [chalmers.se] reported in this thesis describes and analyzes technology-related acquisitions and spin-offs. The basic idea is that an economic system where large and small firms interact through technology-related ownership changes is highly conducive to overall innovativeness and long-term growth, given certain conditions"

Cisco [cfo.com] certainly is successful at acquiring technology through acquisition, though they do a lot of their own R&D also..
I could go on with lots more examples.
The question is whether Dells model will hold up in the long run.
So far they seem to be doing ok with their 'Business Partner' model. Only time will tell.

Re:missing something here....

[Anonymous Coward]

Apple never bought any rights to the GUI which Xerox developed at Palo Alto. Rather, after a viewing of the system by Steve Jobs and some of his programmers, Apple took the concept and incorporated it into their own products. Xerox never profited in any direct way. Please make no further attempts to rewrite history, as the history police view this as infringing on their own rights.

Re:Three Phases of Competition

[seann]

whoa whoa, No innovation left? Hello Mcfly.

Deskjet 5850 - Built in Wired/Wireless printing [hp.com] Who else offers this?

PSC Photosmart 2510 - Wired and Wireless Printing Scanning Faxing Memory Card uploading [hp.com] Same here? And don't say there's "no demand" for it. Don't.

Photosmart 7960 - 8 Ink printing system [hp.com] AND features the Number 59 GRAY ink cartridge [hp.com] for AMAZING printouts with 3 levels of gray. Amazing.

Well? All I see is innovation.

Re:Mature products

[green pizza]

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 machines (AppleTalk, via high speed serial ports... also available on ISA cards for PCs) to share a high quality laser printer for Postscript output from applications such as Aldus PageMaker (July 1985... now Adobe PageMaker or InDesign).

All of this several months before Windows 1.0 even shipped... and over a year before Compaq sold the first IBM-compatible PC clone.

Re:Incorrect assumptions...

[cpt kangarooski]

Hm, not really. Raskin, and some others at Apple, were already pretty familiar with Xerox's work. But Jobs kept interfering with their projects. So they arranged for him and other influential people at Apple to take tours of PARC so that they would see that things like the Macintosh project were actually worthwhile.

For a good history of Apple, I'd suggest "Infinite Loop" by Malone, IIRC.

Re:Incorrect assumptions...

[Anonymous Coward]

You have never heard of Jef Raskin, right? The man who got the ideas before PARC? Who published them in the academia years before the Star and the Alto got built? Who went to work at Apple and created the Mac?

Re:Thank God I've still got my LaserJet III

[Anonymous Coward]

I haven't been particularly impressed by Dell's reliability or engineering these days. My laptop's screen died after six months of use; they replaced that in a friendly manner because it was still under warranty.

But we had a desktop where the power supply died after a few years (out of warranty). I replaced it with a generic ATX power supply, which promptly blew out with a great puff of black smoke when I turned it on. Apparantly Dell is/was in the habit of putting standard-looking ATX connectors on their power supplies, but using a nonstandard pinout. (It appears to be about the same as a standard ATX connector, but with all the pins shifted over by two or three rows). There is no comment anywhere in the Dell documentation about this, nor is there a marking on the power supply. Dell tech support was not at all apologetic about this.

Nor is Dell at all useful for getting add-on parts. I tried to get a wireless mini-pci adapter for a notebook a few months after we bought the notebook. But they seem to change models every other day...it took a few hours of bouncing around between departments to find the right part number for a wireless card, and another hour or so to find that they do not indeed have any in stock, or ever will.

Anyways, warranty service from Dell seems fine. But beyond that, expect no help whatsoever.