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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.'"
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The Ignominious Fall of Dell

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  • cough (Score:5, Funny)

    by Vinegar Joe ( 998110 ) on Thursday July 01, 2010 @07:29PM (#32766216)

    "Only a rotten company sells defective computers and lies about it."

    Maybe the users are holding them wrong?

    • Re:cough (Score:5, Insightful)

      by Anonymous Coward on Thursday July 01, 2010 @07:35PM (#32766324)

      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.

      • Re:cough (Score:5, Insightful)

        by LynnwoodRooster ( 966895 ) on Thursday July 01, 2010 @07:48PM (#32766466) Journal
        Now you're assuming Apple cares about any product more than 2 years old. After all, they just cut support for first generation iPhones and iTouches, and those are just a hair over 2 years... I guess that's a better business model, though - planned obsolescence in 24 months.
        • Re: (Score:3, Informative)

          by Anonymous Coward

          First gen iPhones are just about 3 years old. I picked up my iPhone 3G in August 2008.

          • Re: (Score:3, Informative)

            Hmmm, my calendar math is a little rusty, but August 2008 would be nearly 2 years ago, not 3 (2008 to 2009, 2009 to 2010)...;)
          • Re: (Score:3, Insightful)

            by decoy256 ( 1335427 )

            OH! 3 years! Well, that makes ALL the difference. Rest easy, guys... Apple gave us an extra year.

        • Re:cough (Score:4, Informative)

          by Anonymous Coward on Thursday July 01, 2010 @08:08PM (#32766734)

          That's nothing.

          Microsoft killed Kin in a month.

        • Re:cough (Score:5, Funny)

          by frosty_tsm ( 933163 ) on Thursday July 01, 2010 @08:11PM (#32766766)

          Now you're assuming Apple cares about any product more than 2 years old. After all, they just cut support for first generation iPhones and iTouches, and those are just a hair over 2 years... I guess that's a better business model, though - planned obsolescence in 24 months.

          A hair over 2 years? The first iPhone model itself is 3 years old. Combine that with the expected life-span of a mobile phone to be 2 years (subsidized phone every 2 years), they aren't doing anything outside of the norm.

          • Re: (Score:3, Insightful)

            by nine-times ( 778537 )

            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: (Score:3, Insightful)

          by mattack2 ( 1165421 )

          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

          • Re:cough (Score:4, Insightful)

            by Mr2001 ( 90979 ) on Thursday July 01, 2010 @11:08PM (#32768366) Homepage Journal

            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:cough (Score:5, Funny)

            by Hognoxious ( 631665 ) on Friday July 02, 2010 @03:55AM (#32769908) Homepage Journal

            there is no such thing as an "iTouch"

            But there is such a thing as an "iDouche". You are one.

      • Re:cough (Score:5, Insightful)

        by sortius_nod ( 1080919 ) on Thursday July 01, 2010 @09:29PM (#32767592) Homepage

        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:5, Interesting)

          by Moridineas ( 213502 ) on Thursday July 01, 2010 @09:56PM (#32767830) Journal

          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.

          I think a bigger problem than that is information overload.

          I work for a small business. I used to build custom computers in the 90s but haven't felt it's been worth it in a long time.

          So what do I buy today for desktops? Dell? Lenovo? HP? Acer? something else?

          If I settle on Dell, which models? Inspiron? Dimension? Vostro? Studio? etc. Each of those branches has DOZENS of configurations and differences.


          Say what you will about Apple, but their products lines are much easier to grok.

        • Re: (Score:3, Interesting)

          by MaWeiTao ( 908546 )

          It looks to me like thanks to lawsuits and public attention the market is indeed sorting out the problem. Look at the situation unfolding with the new iPhone. And the examples you cite are a perfect example of the market sorting out the problems.

          A situation like we had with Microsoft is one that required government intervention. Certainly government involvement helped things along and likely helped prevent some real potential for problems But even then, over time the market helped sort that out too. Google

      • Re:cough (Score:4, Insightful)

        by ultranova ( 717540 ) on Friday July 02, 2010 @05:40AM (#32770392)

        I'm not an apple fanboy, but this isn't the same class of issue.

        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: (Score:3, Funny)

        by theolein ( 316044 )

        OMG Apple fanboi fire brigade to the rescue!!!!! Thank God you got here in time before people could realise that Apple is just as prone to making shoddy products and lying about it as anyone else.

    • by lalena ( 1221394 ) on Thursday July 01, 2010 @08:35PM (#32767070) Homepage
      People on this site should know that if you buy from Dell, you get it from their Small / Medium Business site.
      US tech support & they come to your house to fix the computer within a day or two.
      The bonus is that I think the computers are cheaper. If you try to get a powerful PC from Dell, their home models usually force an overpriced under powered video card on you. Good video cards are very expensive from Dell. The Business site allows more choices. It lets you get a good PC with no video card. If you don't need one, use on-board video. If you do need one, get it from newegg.
      Note: I do build and overclock PCs, but sometimes if you need something simple it is hard to beat Dell's < $300 computers. I also go with them for the very small form factor PCs and sometimes check out their Refurb Site [] for Previously Ordered New (returned - not refurb) PCs to see if they have exactly what I am looking for.
      • by tunapez ( 1161697 ) on Thursday July 01, 2010 @11:38PM (#32768566)

        ...and sometimes check out their Refurb Site for Previously Ordered New (returned - not refurb) PCs to see if they have exactly what I am looking for.

        FYI: no matter what you choose, Dell will send you a used computer [] if that is what they need to unload. Been through it on 2 laptops I ordered, one was new and files I recovered from other's drive spanned at least 3 months of previous usage. This despite my unchecking Refurb and Scratch/Dent when deciding. The Dell tech told me they're all potential refurbs from Outlet, refused to issue an RMA and flat-out REFUSED to escalate the call to any superior. Good thing I recorded the convo (1-Party State []) and it was before they re-worded the site's legalese to what I linked to above, AmEx was not impressed and issued me immediate, full refund for both. I won't be getting any more Dell's in my lifetime.

    • Re:cough (Score:5, Funny)

      by KarmaKhameleon ( 1843244 ) on Thursday July 01, 2010 @08:49PM (#32767218)
      "dude you're getting a dell"

      is that a threat?
  • by jbeach ( 852844 ) on Thursday July 01, 2010 @07:32PM (#32766262) Homepage Journal
    I think it might be a bit early for "Dell is the Devil".
  • -shrug- (Score:5, Insightful)

    by Darkness404 ( 1287218 ) on Thursday July 01, 2010 @07:32PM (#32766274)
    Really is there any PC maker that is 100% great and excellent? I'm sure that Dell's faults aren't any worse than HP, Toshiba's, Gateway's, or any other major maker of PCs.

    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.
    • by Sycraft-fu ( 314770 ) on Thursday July 01, 2010 @08:09PM (#32766748)

      I've had lemons come from high end brands before. They were always promptly replaced, but doesn't change the fact that they were faulty.

      Or, in the case of the whole capacitor deal which is what I imagine what this is about, ASUS and others like that got hit too. You could buy a top of the line motherboard and have the caps blow up. Again, they replaced it under warranty but I seem to recall Dell doing the same.

      Products have problems, deal with it. If you own a line of products that have never had problems the reason is NOT the that products are perfect, but that you've been lucky. Shit happens. So long as the manufacturer replaces the broken part, what more do you want?

      • by Doctor_Jest ( 688315 ) on Thursday July 01, 2010 @08:24PM (#32766926)
        The court documents disagree with your last statement regarding Dell. The problem here isn't that there were defective computers, it was the Dell sold them knowing they were defective, then cycling around to blaming the customer when they did break. And this isn't about Mini10's or anything like that.. this is about Optiplexes... which is a staple of small to medium-sized businesses. I am not angry that Dell sold defective computers (that is the capacitor maker's fault really.) I am angry at Dell because they lied about it and blamed users. That is dirty pool in anyone's book. This is about the capacitors failing, but that is just the half of it.

        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....

      • by smash ( 1351 ) on Thursday July 01, 2010 @08:56PM (#32767296) Homepage Journal

        Thing with Dell is, they seem to go out of their way to blame your use of the product in cases like this. I dealt with the capacitor issue, and we ended up getting sent a stack of about 20 GX260 motherboards to replace ourselves (we were on a remote mine site and couldn't have a dell tech come out every time one died).

        However, their handling of the E6500 and E6400 overheating and down-clocking problems has been appalling. They were sold as a high performance laptop, and dell's first question was what software I was running. I'm in an air conditioned office, using a "high end" laptop, it shouldn't fucking matter what software I am running. Despite sending through details of the mass problems people experienced on the internet, and listing the service tags of basically the entire first batch of E series machines we purchased, dell were "unable to replicate" the problem. I had to do a bunch of testing and send through snapshots of what i was seeing to get them to acknowledge that the problem even existed despite massive background info available from unhappy customers on the internet who were also ignored by Dell. Turns out there was a motherboard rev, hence they could not replicate on their newer machines.

        Just recently we ordered about 10 more E6500s, all of which have constant network drop outs. The quality control really has gone to shit.

        • by JDeane ( 1402533 ) on Thursday July 01, 2010 @09:56PM (#32767826) Journal

          I worked as Dell telephone tech support, I can honestly say they DO know about the issues. Nice big red screen pops up when you call them that says "Do not read this to the customer" it contains a full description of the issue your having 99% of the time. (The E6400's where funny as hell.... and no your not crazy and yes Dell knows about the issue.) Oh did I mention this screen pops up right after we ask "Can I have your service tag number".

    • Re:-shrug- (Score:5, Insightful)

      by Kjella ( 173770 ) on Thursday July 01, 2010 @08:40PM (#32767130) Homepage

      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)

      by Shikaku ( 1129753 ) on Thursday July 01, 2010 @08:54PM (#32767260)

      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.

  • Hyperbole much? (Score:5, Insightful)

    by JesseL ( 107722 ) * on Thursday July 01, 2010 @07:33PM (#32766284) Homepage Journal

    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.

    • Re: (Score:3, Interesting)

      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?

      I built a linux firewall out of a cardboard box, spare parts, and duct tape. The power switch was literally duct-taped to a hole I made in the side. It was pushed a grand total of three times during it's illustrious career. After configuring it and setting it to auto-update with Debian, it was left there unattended for about six years before it was finally decommissioned, still working. I wrote on the side of it "Hillbilly Deluxe Firewall".

      If Dell can't make working computers using brand new equipment, an a

      • by PopeRatzo ( 965947 ) * on Thursday July 01, 2010 @08:14PM (#32766830) Journal

        I built a linux firewall out of a cardboard box, spare parts, and duct tape.

        That's nothing. I built a nuclear reactor out of an old refrigerator, bits and pieces purchased at the local Home Depot and Radio Shack, and spare parts from a 1976 Toyota pickup.

        It works fine, but I have a hell of a time getting fissile material. Those nice young Russian guys say they're going to deliver as soon as my check clears. I'm going to put the waste materials in my mother-in-law's basement, which should be safe, since there's a concrete foundation. I cleaned out a corner next to the washing machine and I plan to stack the cardboard boxes there for the next 50,000 years.

      • Re: (Score:3, Interesting)

        by Reziac ( 43301 ) *

        Heh heh, that's hilarious... sounds like something I would do!!

        I don't think the major brands have a "problem" with their stuff dying on schedule, because they figure it just adds sales churn since most people won't know what the PC died of anyway, and most don't brand-hop once they've got started with a given brand.

        I say this because my observation is that the namebranders are *designed* to fail at about 3-4 years old, primarily due to chronically running too hot.

        I have a high-end Dell sitting here that, a

  • Whatever (Score:5, Insightful)

    by girlintraining ( 1395911 ) on Thursday July 01, 2010 @07:37PM (#32766338)

    "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.

  • its never been about (Score:5, Informative)

    by nimbius ( 983462 ) on Thursday July 01, 2010 @07:38PM (#32766354) Homepage
    hardware reliability or quality, arguably. I just filled out a Purchase order for ~1mil. in dell hardware. all our megacorp cares about is how good is the corporate support, how fast to return parts arrive, how big is the discount.

    uptime and scalability are all our concerns. for us to care about dell lying would be calling the kettle black.
  • Commerce IS deceit (Score:5, Insightful)

    by sgage ( 109086 ) on Thursday July 01, 2010 @07:39PM (#32766372)

    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.

  • by TheRealQuestor ( 1750940 ) on Thursday July 01, 2010 @07:40PM (#32766376)
    I've been telling my customers for years about how wonderful the hardware that dell uses is. And by wonderful I mean you buy one, hope you get a year out of it, then buy another. I have a stack of Dell/HP/All other junk machine motherboards all with puffed caps. Kind of Makes my job much easier. Customer calls and says thier pc is crashing or wont start. I ask what brand, they say dell, and I know right away what to look for. 2 seconds to open the machine. 2 more seconds to see the puffed caps. 2 minutes explaining why and what happened. 5 minutes later I have a check to build them a new pc. You know. I guess I love dell.
  • by onyxruby ( 118189 ) <<ten.tsacmoc> <ta> <yburxyno>> on Thursday July 01, 2010 @07:41PM (#32766386)

    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.

    • 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

      • by RobertinXinyang ( 1001181 ) on Thursday July 01, 2010 @08:52PM (#32767244)

        I have one semester, out of four, left on my MBA. I have never heard anyone say, "it is the ethical duty of a business owner to return maximum profit to the shareholder, as reported in quarterly statements."

        If it were said, and it were not being said as an example to be torn apart, I would expect any of the instructors, or fellow students, to tear such a position to shreds. It may fit your notion of what is taught in Business School; but, it is not what is actually taught in Business School.

        • Re: (Score:3, Insightful)

          by PhxBlue ( 562201 )
          Just like any other career field, there's how it works in an academic setting, i.e., how it should work; and then there's how it actually works.
  • Nobody cares (Score:5, Insightful)

    by Bruce Perens ( 3872 ) <> on Thursday July 01, 2010 @07:48PM (#32766470) Homepage Journal
    HP sold defective PCs, IBM sold defective PCs, all have had their class action cases and they're over, and nobody cares.

    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.

  • by Low Ranked Craig ( 1327799 ) on Thursday July 01, 2010 @07:52PM (#32766500)
    at "Secure"
  • This is spot on... (Score:5, Informative)

    by citking ( 551907 ) <> on Thursday July 01, 2010 @08:01PM (#32766628) Homepage

    I work in higher ed in the state of Wisconsin. We, of course, have a purchasing contract (a mandatory one no less). Because of this, I've been working with Dell (ordering PCs and doing warranty replacements) for a long time now.

    In the past, even just 3 years ago, Dell would bend over backwards for us. We got waived on the fees and got waived through the "exams" for warranty parts replacement certification. We could also could get spare parts on hand for PCs. Lastly, we got huge discounts for the UW System and for personal purchasing. Now, however, our sales rep is forcing us to take these stupid, 2 hour exams for replacing parts. We are, of course, overworked and understaffed and I have no time in my week to sit down and "learn" how to replace RAM or swap a power supply. Yet Dell will not budge. When I questioned our sales rep on this he became irate and downright pissy with me.

    But, that point is moot really when one looks at the atrocity that is the DOSD (Dell Online Self Dispatch []) that replaced the Warranty Parts Direct site. Before my certs expired I needed to get a new DVD R/W drive. I had to scroll through lists and lists of parts, many of which were printer parts, server parts, plastic bezel pieces, etc...things that had nothing to do with the service tag of a standard desktop system.

    Dell has hit bottom. Their customer service is shit, their tech support is horrible, and the issues with the bad caps was pretty much the last straw (it's OK to have bad components; the bad part is how they tried to cover it up). I'm done with Dell. I won't recommend them to anyone now.

  • How Dell got huge (Score:4, Insightful)

    by caywen ( 942955 ) on Thursday July 01, 2010 @08:03PM (#32766656)

    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.

  • by Trip6 ( 1184883 ) on Thursday July 01, 2010 @08:05PM (#32766682)

    Anyone who outsources manufacturing of any kind has faced this problem. Component suppliers provide defective parts to factories, and when the first parts that contain a defect not seen before arrive, incoming QC hasn't seen the defect yet and so might not test for it. The parts are then used, and if the defect allows the product to pass inspections and burn in, you now have your supply chain infected with product containing the bad part. The consequences of the bad part range from outright consumer danger (e.g. exploding batteries), to shortened product life resulting in expensive warranty repairs and a damaged brand reputation, to very little impact resulting in just a few consumers experiencing annoying problems.

    Once you learn of the bad part and the consequences, you're like the CDC (center for disease control). You have to find out how bad the outbreak is, what the return rate is, how much of the supply chain is infected, what the consequences of the failure are, and then decide what should be done about it.

    If the failure rate is below, say, 10% and the consequences non-life-threatening, you will likely do nothing and deal with it in the repair channels, and make a running change to your incoming QC processes and manufacturing lines. If there is extreme personal risk you might have to do a recall, and you probably have to suspend your entire supply chain until the root cause is found and everything from raw materials to subassemblies to product in transit to store inventories to consumer's products is fixed.

    In this case, Michael Dell was more than likely in the CDC meeting, and data was probably presented that pointed to the fact that a recall wasn't necessary. However, it looks worse than that, and Dell is being painted as a greedy tyrant who shipped bad parts knowing full well he did so.

    I guarantee this is NOT the whole story, and there was some serious gray area involved at Dell as to what to do about this issue. More than likely, this was a calculated risk that the problem would not turn out as big as it is.

    • Re: (Score:3, Insightful)

      by X0563511 ( 793323 )

      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 act

      • by Reziac ( 43301 ) * on Thursday July 01, 2010 @10:48PM (#32768230) Homepage Journal

        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.

  • Bloatware (Score:4, Interesting)

    by EmperorOfCanada ( 1332175 ) on Thursday July 01, 2010 @08:05PM (#32766688)
    The first thing that did it for me was when they started polluting computers with bloatware.
    Being the family computer nerd I would just wipe out any new Dell coming into the family with a fresh copy of the OS.

    The second thing that did it for me was the quality reduction of support. 10 years ago Dell would go that extra mile and they were my standard recommendation for a PC. But then they went Indian with their support and calling in would start with a market survey and eventually end with a big negatory.

    The first two were enough for me but the third was a bizarre drop in quality. Their machines were burning out and other oddities.

    They might try and defend themselves saying that they needed to cut support costs and that without the additional revenue of the Norton AV subscriptions that they couldn't compete. But the reality is that their initial reputation was that buying a Dell was a safe bet. But as a nerd I have a reputation to manage and recommending Dells became a bad idea. Now I recommend a local computer shop that rocks.
  • by bsane ( 148894 ) on Thursday July 01, 2010 @08:16PM (#32766858)

    He should just dismantle the company and give the proceeds back to the shareholders.

  • by Ex-MislTech ( 557759 ) on Thursday July 01, 2010 @08:18PM (#32766882)

    A good example of some of the things going on at Dell go like this.

    I was hired as Basic Server Support tech.

    I was given extra training to take over the graveyard shift from headquarters in round rock.

    It was moved to Oklahoma City.

    After several months we had done well as a team and were offered Gold level support,
    but we would need to apply for that job.

    I did apply and I got the position and the night crew became gold level support.

    After just a few weeks the platinum crew was so swamped they started dumping
    their calls on us and we were required to take them.

    We got a few days training and were thrown to the sharks
    taking calls way over our heads with little to no prior experience
    in the advanced server software arena.

    The customers were guaranteed MCSE trained technicians.

    Needless to say that is not what they were getting.

    Customers were furious and launched into a tirade over the idiocy,
    and I did not blame them a bit.

    To me this was breech of contract and fraud.

    I brought this up in a meeting and was shouted down.

    I decided at that point to leave the company.

    At the end of the one year I had been there, over
    half the ppl working for server support had quit.

    1 year after I left my team of 26 only had 3 original members.

    The upper management at Dell was THAT bad.

    Michael Dell came off his long term vacation and
    tried to correct the course of the company, but
    the damage had been done and he was lied to as well.

    It took him time to work thru all the lies and he fired
    a lot of ppl for various reasons.

    Some of the low to middle management were actually
    good ppl, such as my eventual manager.

    He didn't like what they were doing, but he had left
    his prior job and had to make this work or lose his
    house, his car, and likely his wife.

    Fun times...

    I keep in touch with some of the ppl still working there,
    and after I quit things got better once Mr. Dell could
    cut through some of the lies.

    I do not think the company will fully recover and it
    cannot compete with Asian companies that do not
    have all the government regulations, fees, taxes,
    and red tape to deal with.

    That and they can get workers to work for below minimum wage.

    Like most US businesses it is hard to compete on uneven ground.

    Good Luck to you all !

  • Oh My... (Score:5, Insightful)

    by Charliemopps ( 1157495 ) on Thursday July 01, 2010 @08:23PM (#32766922)
    A whole new generation gets to learn how business works. A company starts and is nothing, why should people buy from it? So the company focuses on quality, low prices and customer satisfaction. People like the company so much they swarm to it. Over the years the company grows larger and larger. Eventually they have capped out their market share, they can grow no more. This is a problem in our growth driven society. We believe that any company that is not growing is failing. So the owners of the company have to grow in other ways, they have to give less to the market they already have... and try to get the market to pay more despite getting less. First the sacrifice from within... departments are cut, benefits are cut, employees are given quotas that grow daily until they are doing so much work they can barely focus on any one thing at a time. Eventually the company realizes it can't cut anymore from within and still function, so it starts looking for cheaper suppliers. Bonuses are given on a yearly basis so an executive can come it, buy tons of faulty components, get his bonus and be gone before the shit hits the fan. Eventually the company is so distrusted by the public they are relegated to a brand name sticker wall-mart sticks on junk it bought from some 3rd party. But the big wigs at the company walk away with their wallets over flowing, open a new start up... rinse and repeat. It's the same with nearly every American business.
    • Re: (Score:3, Interesting)

      by yuhong ( 1378501 )
      Yea, we need to end the obsession with stock price growth and move away from stock price based compensation and the quarterly earnings game. It was originally done in the name of "maximizing shareholder value" promoted by corporate raiders back in the 1980s and it must end. I have this latest Slashdot submission that is still pending: []
    • Re:Oh My... (Score:4, Insightful)

      by zippthorne ( 748122 ) on Friday July 02, 2010 @12:58AM (#32768966) Journal

      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.

  • by owlnation ( 858981 ) on Thursday July 01, 2010 @08:25PM (#32766940)
    It was 1500 years ago, and yet the lesson has never been learned by many.

    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.
  • Lousy service (Score:4, Informative)

    by Andy Smith ( 55346 ) on Thursday July 01, 2010 @08:26PM (#32766952)

    I've had a couple of Dells.

    I was going to relate some of my bad tech support experiences, but I'll jump straight to this one:

    The tower was making a lot of noise. I had researched the issue and discovered that badly-fitting card readers on certain Dell models (including mine) were causing vibration noise.

    Called tech support, got through to a guy at an Indian call centre. Told him what the problem was, and that I knew why it was happening.

    He wanted me to disconnect _everything_ from the motherboard, take the memory out, unplug every cable, etc. He said this was policy: They have to try plugging everything back in separately to diagnose what is making the noise.

    Eventually I had to be bluntly honest and very carefully say: "I'm sorry, but throughout this call we haven't been able to understand each other because, with respect, you don't speak good English. I'm not comfortable with the idea of disconnecting everything because I don't believe you could explain to me how to re-conect everything."

    And that was how Dell got out of helping another customer. Without me disconnecting every single component in my computer, they would class the noise fault as "unresolved" and wouldn't replace the card reader.

    Dell's machines are pretty good. Most people who have had a Dell would recommend them to their friends and family. But people who have had to use Dell tech support will tell you the same thing: If you do buy a Dell, do so with the knowledge that you are effectively buying a computer without a warranty because you will never get any fault fixed.

    • Re: (Score:3, Insightful)

      by int69h ( 60728 )

      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:Lousy service (Score:4, Interesting)

        by phillymjs ( 234426 ) <slashdot.stango@org> on Thursday July 01, 2010 @09:50PM (#32767774) Homepage Journal

        None of these companies hire rocket scientists for tech support. You couldn't afford the machines if they did.

        I'd be willing to pay a bit more for access to a clueful support staff of native English speakers that don't insist on following a script, but actually listen to what troubleshooting I've already done and go from there.

        That's why I buy Macs. The last time I had to call Apple support a couple years ago, the tech I spoke to was in Texas. He listened to what I had done to isolate the problem, agreed with my conclusion, and arranged a repair with no BS.


  • What is good then? (Score:3, Interesting)

    by BlueFiberOptics ( 883376 ) on Thursday July 01, 2010 @08:30PM (#32767004) Homepage
    If Dell is junk, what do people recommend? I already have a Macbook Pro, but in the future I want to purchase a non-Apple computer, what brand is most trusted? Lenovo? HP?
  • by bartwol ( 117819 ) on Thursday July 01, 2010 @08:32PM (#32767034)

    Some time in the nineties, it was reported that IBM ran an unusually high problem rate on a line of Thinkpads. The media attacked IBM for refusing to make any detailed remarks about the problem, or to establish a formal action plan. IBM's only comment was something to the effect, "IBM Thinkpad users have a high degree of satisfaction with their Thinkpad products. We remain committed, as always, to assuring that high degree of satisfaction."

    Product failures, particularly computer failures, are a routine part of the landscape. All this hubbub about people losing data because of Dell's unreliable computers is dubious...responsible computer owners assure their own data protection. Only the irresponsible or ignorant rely on the manufacturer to do so, and always at their own peril.

    A good computer company stands behind its products. When you have a problem, you call them and they promptly restore your satisfaction. The methods, economics and logistics of doing so may sometimes turn to the dark arts, but in the end, SATISFACTION best describes what a customer wants most.

    Over the years, I've dealt with a lot of Dells, a lot of Dell problems, and a lot of Dell. And as ugly as this capacitor story now plays, I am still faced with the fact of my continued satisfaction with Dell as a company that has provided me with good value and satisfaction. I'm not lucky. Dell has done a good job of standing behind its products, and in my experience, continues to do so.

    P.S. My only relationship to Dell is as a customer.

  • by Man On Pink Corner ( 1089867 ) on Thursday July 01, 2010 @08:36PM (#32767080)

    According to the Times, when the University of Texas complained that its Dell PCs were failing, the company said the school's math department had pushed them too hard, making them solve difficult calculations

    Re: Hardware failures running Matlab

    You're exceeding the floating-point unit's recommended duty cycle. Turn it off for awhile.

    Sent from my iPhone

  • Let 'em fail (Score:4, Interesting)

    by Ngarrang ( 1023425 ) on Thursday July 01, 2010 @08:57PM (#32767304) Journal

    The computers, that is. They are cheap and easy to fix.

    I have my company running on refurbished GX260, GX270 and GX280 models. I have the occasional fan failure, but no motherboard failures with PCs that are on 24x5, and some 24x7 out on the factory floor. If it fails, I put the HD into another one. We paid $200 each, or less. I got 'em stacked up in the corner like cord wood. Easy to fix, easy to swap parts. I can put a HD into any of the 3 models since they share a common chipset and XP runs just fine.

    P4-2.4GHz or faster, 2GB RAM...pretty much all a normal business user needs.

  • by Craig Ringer ( 302899 ) on Thursday July 01, 2010 @09:32PM (#32767624) Homepage Journal

    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.

  • ODM Fault? (Score:3, Interesting)

    by nukem996 ( 624036 ) on Thursday July 01, 2010 @11:31PM (#32768512)
    I work for a very large American computer company and while everyone thinks we build machines we don't. We don't even really design it. We goto the ODM(Original design manufacturer) with an idea, spec out the parts, help design the case and they put the thing together. Their the ones that really control the quality of the board and most of the parts. Even when we do come to them with certain parts we want(CPU, GPU, etc) they end up making the decision on everything else(SATA controller, audio card, etc). There are a number of ODMs(Foxcon, Miatec, and a bunch more I forgot the names of) their all competing for the lowest price so the company(Dell, HP, Apple) can sell it to you at the best price. The part that always amuses me is that the ODMs are the ones building the machines for everyone. So a Dell, HP, Apple, all can be built by the came company with the same parts the only difference is the case. That being said the company can control the quality of the parts but that means price goes but which makes customers goto cheaper competitors.
    • Re: (Score:3, Informative)

      by Animats ( 122034 )

      I work for a very large American computer company and while everyone thinks we build machines we don't. We don't even really design it.

      Start looking for another job. Soon, your company will be replaced by a brand from India or China. Take a look at these laptops from Hanbo. [] US$100 to $288, delivered to the US. Order 500, and they'll put your logo on them. You too can be a "computer manufacturer". Who needs a US false front?

Executive ability is deciding quickly and getting somebody else to do the work. -- John G. Pollard