The Ignominious Fall of Dell 604
snydeq writes "InfoWorld's Bill Snyder discusses the ignominious decline of Dell, one akin to that of Computer Associates, leaving the company forever tainted by scandal and a 'shocking breach of faith with customers.' Dell's pioneering business model and supply chain helped make desktop computing ubiquitous, affordable, and secure. But years of awful quality control and customer service have finally caught up to the company in a very public way that will do irreparable damage to the company for years to come. 'What we've learned about Dell recently doesn't qualify as an understandable mistake. Only a rotten company sells defective computers and lies about it.'"
I got there Mini10v, and quite like it (Score:5, Insightful)
-shrug- (Score:5, Insightful)
About the only way you can make sure you get decent PC hardware is to build it yourself or have enough knowledge to sub in and out parts if need be.
Hyperbole much? (Score:5, Insightful)
Does anyone here care to name a PC manufacturer with a spotless record of turning out nothing but quality, or who has always been 100% up front about dealing with legitimate manufacturing problems?
They've all turned out crap and they've all reliably concerned themselves with their own bottom lines first and foremost. It doesn't excuse Dell, but I can't really see why they need to be singled out either.
Did I miss the boat on this one? (Score:2, Insightful)
Re:cough (Score:5, Insightful)
I'm not an apple fanboy, but this isn't the same class of issue.
Now -- if Apple had been selling the iPhone 4G for four years and ignoring the fact that a statistically large number of them were suddenly dying of a known bad issue, then intentionally shipping out 'repaired' iPhones with -more- bad parts in them, then I'd agree.
There's a lot of evidence to suggest that Dell not only knew about the cap issues beforehand, but that they intentionally misled a lot of customers about the problem and when they did fix them, they did so with more bad boards.
Whatever (Score:5, Insightful)
"We got greedy."
End of the story. No, seriously. Most companies in this industry have sunk not because their product or brand sucked, or the economy went bad, etc.; Most die because of bad management. Anyone remember Northgate computer systems? Very promising company. If it had maintained its profile it would be bigger than Dell today, but corporate mismanagement torpedoed it during the 90s -- during a period of economic growth and a huge upswing in computer sales.
Commerce IS deceit (Score:5, Insightful)
Let's face it, all corporations are deceitful sacks of s**t. That's the norm for business these days. Presumably it wasn't always like this, but nowadays it's the way it is. Lie, cheat, spin, whatever it takes. If that doesn't work, pretend ignorance and innocence going into the lawsuit. This is modern capitalism.
Dell did this to themselves (Score:5, Insightful)
There cultural values fell by the wayside years ago. The bottom line became the end all and be all of everything. They outsourced everything they could, getting rid of every non-Indian employee they could. Does it come as any surprise that a company that would sell out it's own employees would also sell out their customers?
They got rid of their greatest asset, their people, and with it also got rid of the ethic that made them what they were. Dell was a very hard working hungry company, full of hard working people. Get rid of the hardworking people and you get rid of the hardworking ethos.
You can't outsource ethics. When damage control becomes more important that quality control your company has lost it's way.
Re:Were the accused stand guilty (Score:2, Insightful)
didn't outsource ethics... (Score:3, Insightful)
just redefined them. Or, as they say in business school, "it is the ethical duty of a business owner to return maximum profit to the shareholder, as reported in quarterly statements"
So, there you go... no duty to employees, community, or even customers. Just make certain that we turn a profit this quarter, and everything else if a-ok
Re:cough (Score:5, Insightful)
Nobody cares (Score:5, Insightful)
The fact is, the consumer doesn't buy reliability. The consumer buys emotional factors, and brand perception, and a good marketer can make the consumer buy any garbage whatsoever.
This is not the end of Dell. Nobody will remember this in a few months, any more than they remember HP and "pretexting" when they buy a printer or a PC.
Re:Commerce IS deceit (Score:4, Insightful)
Of course businesses try to create a lower-cost product, and sell it at a higher price. But then they end up selling stuff that they know full well is defective.
Yes, everyone does it, and always has. This is not an indication that it's OK. It's an indication that there's something rotten at the core.
Re:Dell is fine for me. (Score:2, Insightful)
Re:cough (Score:2, Insightful)
I bought mine with Ubuntu on it from Dell a couple of years ago. So far it's the least hassle purchase I've ever made (knock on wood).
How Dell got huge (Score:4, Insightful)
I still remember some 15 years ago what the PC marketplace looked like. There were dozens of these little PC shops that filled the pages of the gargantuan Computer Shopper magazine. They all wanted to undercut each other.
Dell stood out because they formalized a real manufacturing process, setup good quality controls, made it brain dead simple to order, and *still* had prices that were just about the best you could get. They had a refined image with organized, glossy ads, which helped a lot.
Where they fell was when they started becoming the expensive guys again. HP has been undercutting them for years, and have established an image even more refined in the eyes of consumers. HP recognized that, sadly enough, if you sell for $100 cheaper and slap some shiny plastic on, you can dominate.
Dell needs to out-HP by figuring out how to be $100 cheaper again, and revamping their image.
Also, it will be interesting to see how their recent tablet/handheld plays pan out. Streak vs WebOS. Will HP's WebOS fizzle out like Kin, or will Streak get lost in a sea of Android devices? Or both.
Re:Were the accused stand guilty (Score:4, Insightful)
Innocent before proven guilty is not an ideology. It is a pragmatic policy implemented because it is considered a lot worse for an innocent man to go to jail than for a guilty man to go free. There are places where the opposite is true: it's a lot less harmful for an employee to be locked out of the office than for a thief to be able to get in, and it's a lot less harmful to lose out on a relationship with a company that is trustworthy than it is to get screwed over by one that is not. In those places, guilty before proven innocent is the norm.
He should just dismantle the company and give the (Score:5, Insightful)
He should just dismantle the company and give the proceeds back to the shareholders.
Re:Were the accused stand guilty (Score:3, Insightful)
Well, as someone who had to support these monsters....
I convicted them a long time ago in my personal court of opinion. Also, let's face it - In cases of CYA, greed, and lying in the business world, there's a pretty high chance of guilt.
Over the course of a couple years, almost a quarter of my billable time was spent on the partner support line with Dell calling in service tags of machines that had a bad motherboard because of these capacitors. Another quarter was performing the in-field switch. It really hurt my credibility and I felt that it hurt my company's credibility with our customers. I constantly had to call in systems, and it resulted in a lot of time explaining what was happening and why "our recommendation" had so many problems.
I was glad that I didn't have to call up the customer support number because my few experiences with them were maddening at best. It quickly became obvious (based on the frequency and the models involved) that there was something wrong with the Optiplex 260s, 270s and the early 280s. I asked about what to do with all the other systems we had out there that were clearly waiting to die. I was informed that I must've just been unlucky with the orders. We started selling IBM/Lenovo products at that point. To this day I won't spend a dime on Dell, and I actively discourage people from purchasing Dell products. Had they issued a recall, I'd feel completely different... But they didn't, so screw them.
Oh My... (Score:5, Insightful)
Re:Even then you don't know (Score:5, Insightful)
From the article linked to this one:
The documents were connected to a lawsuit filed by Web hosting service provider Advanced Internet Technologies (AIT) against Dell in the U.S. District Court for the Eastern District of North Carolina on Nov. 1, 2007. AIT sought $75,000 and punitive damages from Dell for breach of contract, fraud and deceptive business practices.
So they WERE found guilty of fraud and deceptive business practices on a small scale with AIT. And so it balloons into a shitstorm even Michael Dell can't sweep under the rug. This is about far more than lemons....
The Fall of the Roman Empire (Score:3, Insightful)
Manage by overextending, with long chains of command and a reliance on slave labor, and your empire will collapse.
Outsource, and you are simply counting the days until your business fails / is taken over.
Re:cough (Score:3, Insightful)
Also, Apple has been (at times) pretty straight-forward about support lasting three years. I think Jobs even said something during the announcement of iOS4 that these products have an expected lifetime of 3 years.
It's not all that strange within the computing industry. Warranties on new computers are usually 3 years or less. IT departments usually plan for upgrade cycles every 3-5 years. Many computer components are designed to have a lifetime of at least 3-5 years.
Re:Lousy service (Score:3, Insightful)
I've used Dell tech support. I would not tell people the same thing. In your case, if that's the standard script they use for diagnosing noise, it's the standard script. None of these companies hire rocket scientists for tech support. You couldn't afford the machines if they did.
Re:-shrug- (Score:5, Insightful)
About the only way you can make sure you get decent PC hardware is to build it yourself or have enough knowledge to sub in and out parts if need be.
Really? Would you know about the "Deathstar" drives or faulty caps or Intel's math bug or nVidia's process problems or Creative's bus noise or every odd compatibility problem? Reality is that the PC has been changing at breakneck speeds, and it's a reason why they call it breakneck. In almost every other business, staying with the old model is just fine if the new one isn't ready. In the PC industry that's suicide, might as well throw yourself off a cliff and try to fly than wait for certain death.
We'll see stability when the ten year old computer is no more different than the ten year old car. Unfortunately that'll also be the day Moore's law is dead and computers have hit the ceiling. Personally I prefer the situation as it is now, as long as I have proper backups all else can be replaced. You can get a new, fully functional 1001PX nettop for about $240, at least that's what I paid for one (+VAT). Now I know that's still a lot of money for many, but to many it's not and there's always used laptops for less.
Yes, it sucks and nobody likes it but a 95% reliable cheap notebook beats a 99% reliable expensive one, and ~100% doesn't exist when you add in real world accidents not even a ToughBook would survive, like say house fire or getting stolen. You know, IBM tried this strategy in the 80s, PCs built to top tolerances and top durability and they ended up grossly overpriced and people bought clones and if they failed people threw them out and bought another clone still for less than the IBM. They are exactly as robust as the market wanted them to be, which is to say not very.
Re:-shrug- (Score:4, Insightful)
Really is there any PC maker that is 100% great and excellent?
If you want something done guaranteed done right you have to do it yourself.
Made in China (Score:2, Insightful)
Re:My company builds stuff in China (Score:3, Insightful)
The simple solutions:
1. Don't outsource at all. This isn't practical
2. Don't buy from the lowest bidder. This is more practical. Who cares if you spend an extra $0.05 on each motherboard, if it cuts your failure rate by 60%? The problem here, is the factory could still be using lowest bidder parts, but charge more.
3. See if you can arrange to have the factory avoid buying from the lowest bidder. This is the same as #2, but pushes it further down the line (and if you can do it, improves the chances of it actually helping)
The real problem? Businesses seem to lack forethought or forward planning. They care about now now now, this quarter now! Nobody with any power seems to realize that dealing with the issue before it becomes an issue is actually better in almost every way.
Re:Buy Dell Small/Medium Business PCs (Score:2, Insightful)
Those are all clearly branded as Dells you retard.
Re:cough (Score:5, Insightful)
I think the big problem is that people are focusing on just Dell. I've stated in a previous post that Lenovo had the same problems, they were aware of them but did nothing to recall or even stop selling the defective machines.
The biggest problem is that consumers don't read tech sites before purchasing, which means they are beholden to the whims of the tech company they are buying from. If they choose to deceive customers it will only become apparent when it's reported by large media organisations.
Look at what happened with the Xbox 360. The first generation were RROD devices and it took a class action law suit with major media reporting it before Microsoft changed their tactics. I have no doubt they were well aware of the problems well before the class action suit, yet still shipped defective products. It took 2 generations of Xbox 360 boards before the problem started to be resolved. Yes, they did do a lot to mitigate brand damage, but by that stage it was too little too late. Yes, I do own a 360, and I have had a RROD.
The biggest problem is that these companies suffer no government backlash, the whole idea that "the market will sort itself out" is total bullshit. So long as companies are not heavily scrutinised after they are caught deceiving the public means they can just claim ignorance and move on. Even with harsh consumer protection laws (like here in Australia), the idea that you can lobby your way out of it sickens me.
Re:cough (Score:3, Insightful)
The first generation iPhones & iPod touches (there is no such thing as an "iTouch") do as much as they did the first day you bought them, and continue to do the same things. You can still buy apps that run on them, use your songs (whether your ripped CDs or other) on them, etc.
How is that "cut[ting] support"? If they literally stopped working (e.g. the playsforsure stuff, and I am NOT a general MS hater btw), that would be cutting support. The fact is that _new_ software revisions aren't coming out for them. Just like you can (and I still have, along with newer ones) use a 10 year old Tivo Series 1 even though it hasn't gotten a software update for a very long time (I pay no monthly fees either since I paid lifetime).
They're all rotten, then (Score:5, Insightful)
Then I guess they're all rotten.
Dell: Numerous examples. I have one of them, the otherwise excellent XPS M1330 that has a defective nVidia 8400M GPU.
Apple: Numerous examples (including right now - iphone). The various iBook motherboard defects also come to mind.
nVidia: The afore-mentioned 8400M remained in production long after nVidia discovered the defect. They kept the defect secret for as long as possible, then when forced to admit it continued selling the faulty part without any warning for users and refused to talk about any arrangements they might've made with individual OEMs for RMA/warranty.
Acer: Frequently sells shoddy hardware and yells "la la la la" loudly when told about it. I have one of those, too, an Acer laptop with a fairly powerful GPU and a cooling subsystem for a basic one, so if you actually use it the GPU overheats and the machine crashes.
Hell, the list is basically endless. Everyone does it, because the consequences are small compared to the profits. Unless that changes, it'll keep on happening, too.
Re:Were the accused stand guilty (Score:5, Insightful)
I guess you didn't get the memo. Warrants are passe, especially within a few hundred miles of the nation's border; you can be arrested (anywhere in the country) for carrying large amounts of money (and they'll confiscate it, and you won't get it back); and of course, once convicted of anything at all, you're a permanent member of the new underclass. Not to mention that "innocence" is highly correlated with how much the defendant spends on lawyers.
Re:-shrug- (Score:2, Insightful)
Yes, it sucks and nobody likes it but a 95% reliable cheap notebook beats a 99% reliable expensive one, and ~100% doesn't exist when you add in real world accidents not even a ToughBook would survive, like say house fire or getting stolen. You know, IBM tried this strategy in the 80s, PCs built to top tolerances and top durability and they ended up grossly overpriced and people bought clones and if they failed people threw them out and bought another clone still for less than the IBM. They are exactly as robust as the market wanted them to be, which is to say not very.
Early IBM PCs were only robust if you wanted to run a tank over the case or bludgeon someone to death with a keyboard. When you bought an IBM, you were mostly paying for the 3 letters on the face plate. ;p
Re:-shrug- (Score:3, Insightful)
You apparently missed the other operator in the statement.
(95% reliable + cheap) > (99% reliable + expensive)
Re:Ok, name another... (Score:5, Insightful)
Now you're assuming Apple cares about any product more than 2 years old.
What other cell platforms are getting significant updates after two years?
The difference is that Apple just posted 65 critical patches to iOS, half of which allow arbitrary code execution. So you're not getting those now-published and officially acknowledged holes.
And Apple holds your actions illegal if you attempt to fix them yourself.
So it's not just the open publishing of security patches that won't be fixed for old phones, but legally prohibiting the owner from fixing those patches on their own.
Yeah, they won't support it, and legally restrict you from supporting yourself!
Re:cough (Score:3, Insightful)
OH! 3 years! Well, that makes ALL the difference. Rest easy, guys... Apple gave us an extra year.
Re:My company builds stuff in China (Score:5, Insightful)
They care about this-quarter-now and screw-the-future precisely because publicly-held companies are legally beholden to their shareholders first and foremost, and if they don't do their best to provide a return on shareholders' investment, then they're in legal trouble of a different sort.
This is why I say the stock market is the root of corporate evil -- because if you're a public company, you're obligated to too many shareholders who don't give a damn about your customers or your future, so long as you give them a dividend check TODAY.
The owner of SAS software said flat out he would not go public because of this. He didn't want to be forced to do the wrong thing for his company or his customers, solely because the shareholders (and the laws that protect them as your primary lienholders) demand it.
Re:cough (Score:4, Insightful)
How is that "cut[ting] support"? If they literally stopped working (e.g. the playsforsure stuff, and I am NOT a general MS hater btw), that would be cutting support.
No, "support" includes patching security holes. Supporting a product means they stand behind it and ensure not only that it does what it was designed for, but also that it stays secure and stable.
For example, when people talk about Microsoft cutting support for Windows XP, they mean MS will stop providing any updates. MS's answer to any newly discovered exploits will be "sorry, we don't support that anymore, upgrade your OS."
Likewise, if Apple stops patching holes in the older iPhones (which apparently they have), then they're no longer supporting those products. Apple's answer to flaws in the older iPhones is now "sorry, we don't support that anymore, upgrade your phone."
Re:possible production run problems? (Score:3, Insightful)
My experience has been the opposite. As the hardware dude for the local user group, I vet all the donated systems. Dells are nearly always sick or dead; the only brand with a worse track record in our slushpile is Micron (which looked to me like it used a lot of parts from the same sources, only further down the 2nds chain). It's to where I just assume a donated Dell is an unrepairable organ donor until proven otherwise.
HP desktops are much more likely to be alive and not need work, and Gateways/eMachines are usually alive but in need of work. But the Dells have been almost entirely goners.
And the clones are nearly always alive, healthy, and outlive any namebrand PC by 3 to 1.
Re:cough (Score:2, Insightful)
I think people love to bash Dell. They don't say anything about the capacitor problems, they suck. They are the first to disclose the exploding battery issue, they suck. All of the issues stem from the suppliers parts that are shared by other computer manufacturers. But Dell gets bashed for their response to the situation and other companies don't. Dell's response to the battery isssue was actually the best one for the customer (and was more recent than the 2003 to 2005 for the capacitor issue) but they get no credit for changing their ways, no credit for doing right by the customer, no credit for being the first to admit that there was a problem.
I've bought Dell computers and not had issues. They are solid computers. Tech support via chat is fine (I don't use the phone support). Of course, I only contact them when it's something that requires a part replacement because I can fix my own computer. Computers are commodity items now, there isn't a significant difference between any of them, buy on price and features and repeat in three years.
--Sent from my Dell laptop
Re:Not in the Business school I attend (Score:3, Insightful)
Re:cough (Score:5, Insightful)
I didn't say it was necessarily a good thing, I think it's an example of how Apple simplicity blows the competition out of the water.
When your average person goes to buy a Mac, they have two basic choices. (discounting Mac Mini and iPad)
1) Get a laptop
2) Get a desktop
If they want a laptop, they have two choices:
1) Get a cheaper laptop (Macbook)
2) Get a more expensive laptop (Macbook Pro)
Each of which has ~3 main configuration
If they want a desktop, they have two choices:
1) Get a cheaper system (iMac)
2) Get a more expensive system (Mac Pro)
Each of which has ~3 main configuration.
The systems are labelled clearly (ie Macbook vs Macbook Pro). There are clear differences between them, and they scale from a low end computer at ~$900 to a very high end computer at $4000+ bucks. Apple systems are also rough in the upselling category--each upgrade has that one feature that makes it JUST worth having!
Like I said, compare that to Dell where when looking at business desktops alone there are: Vostro, Optiplex, Inspiron, Studio, XPS, AlienWare and Precision all of which have probably dozens of configurations and models, some VERY different from each other. There are some stupid choices, like you can't (or couldn't) get Windows 7 64-bit on many of the Optiplex line, when you could on the Vostros, even though Vostros are supposedly the inferior quality machine. What gives? It took me hours of reading to figure out which Dell was the best (and then the pricing differential and lack of 64-bit os license made me pick a Vostro).
Again, say what you will about Apple / "The Party" but their product lines should be required reading for the other PC makers...
Re:cough (Score:3, Insightful)
Re:cough (Score:0, Insightful)
Look at what happened with the Xbox 360. The first generation were RROD devices and it took a class action law suit with major media reporting it before Microsoft changed their tactics
Right now the most endearing legacy of Microsoft / Bill Gates is going to be the total removal of the expectations of consumers to buy products which work as expected. And there are leagues of companies running in their wake. Dell is just an example of one company which has finally run into a semi permanent brick wall. And despite this, people will give these companies their money then get on the web and complain about the results.
The companies aren't doing a good job because they don't have to, despite actually being a well educated consumer... you bought a broken 360 anyway. The only guarantee you have is that as long as you buy broken goods, companies will keep producing broken goods.
The biggest problem is that these companies suffer no government backlash
Government consumer protectionism has been falling apart for about 80 years. Australia isn't as bad as the US yet but that's just because we live in a slightly backwards nation. This isn't going to suddenly turn around. If the market isn't going to sort itself out then you really need to take the initiative.
I challenge everyone reading this who purchased an RROD 360 to never buy another Microsoft product. The power really is in your hands, take it.
Re:Commerce IS deceit (Score:4, Insightful)
It's not "rotten to the core." It's almost good engineering.
Those first few tolerances you shave off save scads of money, if you can live with slightly lower yields. There's nothing wrong with this, as long as you don't misrepresent your product. "Just good enough, but cheap as dirt" is a valid business model. And it was always Dell's stated business model.
Of course, the laws of diminishing returns work in reverse, too, and eventually you have to really shave tolerances to get even meager savings, to the point where you don't have a product any more.
"rotten to the core" is taking the units out of the dump bin and selling them anyway.* Just reducing resources spent while still satisfying people's needs is the whole point of engineering.
*or metaphorically doing that if you're using the users themselves as your QA...
Re:-shrug- (Score:3, Insightful)
You're still missing the OP's point. He's saying that the market has signalled overall that price is more important than reliability. If enough people valued reliability over value then purchasing decisions would indicate over time that this was the case, leading the companies to adjust their products and pricing points i.e. economics 101
To be honest if you want reliability and price is not a concern you don't usually think Dell.
For sure there is a market for these people, and it is serviced by other means/vendors.
Re:Oh My... (Score:4, Insightful)
I was with you till the last sentence.
The big-wigs aren't in on the start-up. They're not part of that initial spark of insight, inspiration, and hard work.
They come in later, when the company is growing into medium-to-large-sized breeches, and needs "people experienced in running a medium-to-large sized company." They get hired into the top positions, and bring in their own people. The kind of people (ahem.. like Carly...) that don't think they need to know about their business, because one business is just like any other..
And yet, somehow, boards of directors keep falling for this crap and hiring these hacks as if they're the only ones who could possibly run the company.
Oh wait.. it's not "somehow." These guys buy their way onto the boards' of directors of rising companies and then pick officers from the same club.
Re:Oh My... (Score:3, Insightful)
I read the article you linked to above (haven't noticed your other submissions, but now will keep an eye out :) -- very good points. Of course this would require changing an entrenched system, pretty tough to do.
I'd add a further incentivizer: let no compensation be given until NN-years later (I'd suggest 10 years) to ensure that decisions are made with longterm company health in mind, and perhaps tie the level of compensation to how stable (not how cancerous, er, growthy) the company is. If the company you helped run goes tits-up due to bad executive decisions, well then, no gold for you, let alone golden parachute!
One big problem is that we've got this generation of MBAs who've never actually BUILT a company, but are being brought in to RUN a company. They know what they learned in business school, and how to play the bottom line, but nothing else. As the HBR article points out, this does not concern them, because they'll have shown their "improved bottom line", collected, and bailed long before their decisions hit the fan.
Re:Ok, name another... (Score:2, Insightful)
The difference is that until the iPhone came out no phones were supporting easily applied updates for the users. My HTC TyTn was delivered with buggy software that would let the phone radio crash without any kind of notice for the user, and a bluetooth stack that couldn't deliver what was promised.
If it weren't for a group of dedicated hackers at xda-developers and jumping through a lot of hoops I would have been stuck with that system until my provider decided to push through an upgrade. Something that never happened.
Sony Ericson phones used to require a special cable to change the firmware, and none of the other phones I have had allowed any kind of user software upgrade. The high expectations you have for support only exist because apple changed the way things were done.
Oh, now, please. (Score:5, Insightful)
Are you familiar with the website "Google"? It's really kind of neat. For instance, watch this:
Google: "Money confiscated"
Very first result:
Isn't that awesome the way that works? You just type in the thing you want a reference for, and there it is. Tech is cool, eh? Also, I assure you that the other matters I referred to... references are just as easily located.
So... if you really wanted those answers, they're right there to be found. Or, you could have asked politely (or even tersely, such as "Cite?") Instead, you wasted time calling me names. Interesting approach. Not likely to get you want you ask for in the general case, just so you know. I just did it to show what an idiot you are, considering that you took the time to call me unjustified names.
Next time think first, type second. Like "Why would he write that..." google... "oh." Or just ask politely. Then you won't have your butt handed to you so neatly packaged.
Re:cough (Score:4, Insightful)
You're not an Apple fanboy, you're simply an Anonymous Coward who just happened to be browsing the board and jump into Apple's defense. I've noticed that such happy coincidences happen a lot for corporations with large, well-funded PR departments. Weird, huh?
Re:Hyperbole much? (Score:4, Insightful)