Randy Switt wrote:
> Addressing your digression :-), I wondered
what you think the
> significant differences between Dell
and Gateway are right now.
One simple fact is sheer size. Dell is about the $40+ Billion class, Gateway about $8 Billion. This helps in advertising, buying power, impresses the buyers, etc.
It isn't quite that simple since Dell has a more complex product line which goes higher into server territory, which is of course more profitable.
OTOH, Gateway has burdened itself with real store outlets. This is great for the consumer, but hell on profit margins unless they bring in a lot more business. I don't see that happening. Given the field they are competing in, it may be too much for their size to carry.
And on the gripping hand, for consumers, I prefer and recommend Gateway because much more of Dell's attention (and resources) is towards the business market. SMB (Small and Medium Business) area is a toss up.
Dell has also benefited from the uncertainty about Compaq. Some of that business is lost to Compaq permanently. Without that, Dell might not be looking so good right now, so their strength may not be long term.
Gateway reacted quickly to the downturn. Dell has carried on, but if the slowdown lasts, Dell's overhead burden may be much greater because of their size, where Gateway could squeak through. Gateway is taking a conservative approach, Dell a riskier one given the uncertain times.
If the HP-Compaq merger doesn't go through, which is getting more likely, the competition for the PC business will be brutal. Gateway will be in an arena with IBM, HP, Compaq and Dell elephants. They'll have to be nimble and lucky to avoid getting stepped on. In that case, it's likely that Gateway will be acquired by one of the elephants to beef up their home/small business presence and support.
Which one would acquire Gateway? Compaq and Dell most probable, HP less so, and IBM unlikely but possible. Eventually those four may become three, though antitrust may affect that outcome.
In the longer term, the market will change in a way that will redefine who is in charge. As part of what I wrote in "Meta Clusters," the big new market is cluster farms of servers, mostly 2 and 4 way commodity servers. AMD may make a killing here with the Hammer, especially if Intel's McKinley has less than mountainous success.
There will be big markets for large managed clusters, and software for same. IBM has a real head start here, Sun is partway there, Compaq has Vax clusters to build on, HP has the 8000 class systems and HP UX, Dell may be stuck with Intel and Microsoft, which will be a handicap.
End user PC will be supplemented with (and by) very cheap appliances. The OS could be Linux with a GUI interface, locked down to avoid user screwups, but most people will just use the browser, email, streaming web radio, video, flash, etc.
The system will be small, like the Nintendo Game Cube or Apple Cube, almost silent (thermostatic controlled fan), and designed for remote diagnostics and home user maintenance (put it in the return shipping box when your replacement arrives). It will be incredibly reliable by today's standards.
OBTW, this also serves quite well as a business desktop with a fast connection to the business cluster service. (For an early view, see the Shuttle SS51 as an example)
The implications of this scenario upset the whole set of current assumptions on how computers are bought and used. We will see a whole new revolution, and I'll predict that it won't be led by any one of the elephants mentioned above.
How far away are we? The hardware could be done today, and has, but the rest of the infrastructure isn't quite there. We need two more things.
First, a full build out of DSL/broadband & fiber to the home. This needs to reach more than 50% of the homes with some High Speed communications capability.
Second, cluster sites need to become known as an alternative to using your own computers. Few of us generate our own electricity and though the analogy is not perfect, future users will not generate most of their own computer power. Computers will be an appliance connection, just like plugging the refrigerator appliance into the power plug.
Finally, some Venture Capitalist needs to jump on this and get started now. The market will be visible in 2002, and start taking product in 2003. A $200 browser/email system could sell today, especially if it came with an ISP all ready to support it. Plug it in to power and DSL (or phone line), dial the ISP 800 number which uses the caller ID to set the registration and configure the nearest ISP cluster, and you are live.
You could be on line in 15 minutes. This product would fly off the shelves. Smaller versions would replace sub notebooks and little ones your PDA. No synchronization problems, backup is handled by the ISP, it's just there when you need it. Anywhere, anytime. If the appliance breaks, get a new one, turn it on, enter your secure ID and away you go.
The companies who need to be worried about this are the elephants I listed above. Gateway may be innovative (and/or desperate) enough to go for this approach.
Oh, this takes care of the MS monopoly and Intel's dominance as well. Everybody wins except the buggy whip manufacturers. :-}}
A Merry Christmas to all, and sleep tight, IBM, Dell, Compaq and HP.