My friends call me Drew, but you may call me Micro-Business Man. It appears that I am no longer just a freelance computer journalist. In socio-marketing speak, I also operate a micro-business. This means I employ fewer than 10 staff (I share an office and expenses with two colleagues). It also means I buy kit. A quick scan around the office reveals two notebooks, two modems, two desktop PCs and two inkjet printers. A server and ISDN is next on the office kit-purchasing agenda.
Unremarkable stuff. But it amounts to a micro-business, the computer vendor?s latest marketing obsession. The micro-business is the low, low end of the PC SME battleground. The market is historically dominated by local system builders. Price is the dominant factor. There is very little brand loyalty in this sector, except from people who know a little about computers. And they buy Dell and Gateway.
This is where I declare my interest. I may spend a good proportion of my working week writing about the channel, but I have yet to make what I consider a major purchase through a computer dealership (consumables, cables and other odds and sods I get from Viking Direct or Micro Anvika, and Lapland UK is handling the repairs for an out-of-warranty notebook). I buy Dell.
Why? Because Dell and Gateway offered 10 per cent discounts to journalists for the first purchase ? like Apricot but unlike Compaq. Because Dell could offer support (a faulty monitor was reported at 5pm and replaced at 9.30am the following morning). Unlike Apricot or Compaq. And because Dell supplied Microsoft Office pre-installed. Unlike Compaq. Or ? until recently ? anyone else for that matter.
Compaq was not interested in me when I was a freelance computer journalist but now that I am a micro-business, it could be an entirely different matter. Compaq is obsessed with Dell and this means it is obsessed with me ? and thousands like me.
I am a relatively sophisticated purchaser of IT ? which means I don?t clog up the support lines. I can afford to buy brand names. And I choose Dell.
Dell is Compaq?s bete noire. In 1990, Compaq messed up badly ? it allowed prices to drift to two and three times more than clone manufacturers. It lost market share and Rod Canion paid the price with his job. Eckhard Pfeiffer is determined not to let the same thing happen again. He has identified Dell as his greatest threat. Pfeiffer is now trying to buy Micron, the US? third biggest direct vendor.
He has also set in train the snappily named optimised customer delivery initiative (OCDI), part of which includes selling direct into micro-business land.
Compaq is doing this because it is frustrated by the indifference of its existing resellers to the micro-business market. The repurchasing cycle ? and hence the cost of sale ? is far too long for most resellers to get involved.
Compaq?s UK direct sales team will open for business in September. It will handle all the micro-business itself (using a big distie for fulfilment) while funnelling leads from bigger companies to 30 or 40 selected resellers.
Compaq reckons it will do good business from the micro-business sector, but it may have to overcome a few hurdles. Currently, Microsoft won?t let Compaq pre-install OEM versions of Office, because the hardware vendor also sells indirect.
But will it make any money? As part of OCDI, Compaq is moving to build-to-order manufacturing. This will remove $1 billion of costs.
Most micro-businesses continue to source kit from their local systems builders. Jonathan Chapple, chairman of Chessington reseller Equanet, reckons Compaq will be unable to compete with these people. And I agree with him.
Compaq will always be more expensive than the thousands of small OEMs out there ? however much it drives down its costs. It will also offer an inferior service. Local system builders can provide a hands-on service for their customers. Compaq can?t do this ? without losing money.
Compaq is stalking Dell so obsessively that it may consider competition from small system builders a matter of little consequence.
Compaq is trying to mimic Dell?s business model. But will it overturn Dell brand loyalty in the micro-business sector?
As a freelance computer journalist I have plenty of outlets to broadcast my opinions. As Micro-Business Man, I am a mere statistic, unqualified to speak for the tens of thousands of Micro-Business People out there. However, when it comes to buying kit, I do know who I prefer to do business with. And it ain?t Compaq.
Outsourcer says the size of the operation should be considered before criticising the error that affected 43,000 women
Vendor says a range of its products will be made SD-WAN compatible, with traditional networking 'completely under disruption'
With just a day to go until the 25th annual Channel Awards, we catch up with the SMB Reseller of the Year category sponsor Exertis, to find out why the sector is such a vital part of its business strategy
Analyst predicts spending on Robotic Process Automation will rise XX per cent next year, driven by price decreases