To Dell and Back!
Dell's third-quarter earnings slip
http://news.zdnet.com/2100-9595_22-5924630.html
HP shines as earnings, sales surge
http://money.cnn.com/2006/08/16/technology/hp_earnings/index.htm
I spent a year at Dell tech support in Bangalore. It was my first job, and I didn’t know what to expect. I took all everything- the job stress, the performance management system and abusive management with a pinch of salt. Its only after I actually quit Dell and joined another firm that I realized how satisfying a job could be. Dell was an island of abuse in an industry where people just want to give their employees a good time so that they stick around.
Dell didn’t have any such concerns.
When I joined Relationship Tech Support, (the group that provides tech support to companies that bring in business in excess of USD 500,000 a year) there were 475 of us in a department that was to have 750 people to handle the total amount of calls offered to the group. In the 14 months I was there, they never saw that figure. In fact, the numbers steadily declined till I left in Aug 2004, when there were just about 300 people. There was a running joke in the HR department that if they had 20 people waiting to collect offer letters for induction into RTS, there would be 25 people waiting for exit interviews. In Oct 2004, the Relationship Support business was closed down and moved to another site.
The Senior Management consisted of arrogant and mediocre imports that lacked cultural sensitivity. Some of them just thought we were a bunch of fools. I remember one presentation given by one of the American managers where he was showing us a bar graph describing bonuses. The bar that denoted a bonus of 7.8% was DOUBLE the height of the bar that denoted a bonus of 7%. Though I flunked statistics in college, I was able to figure out the con.
Well… forget the human rights abuses. What was Dell doing in the Market?
They screwed everybody.
They drove margins down and offered impossible to sustain frills like free lifetime tech support and deep discounts. They were able to blackmail their suppliers into offering them low prices based on volumes. They sold a lot of computers, but then it started to turn sour.
Their corporate philosophy was Cheaper, Cheaper, Cheaper, Faster, Better- in exactly that order. Business units were appraised based on the amount of money they saved instead of the amount of value they created.
When you have an underpaid and overworked lad providing tech support to someone with a $3000 computer that’s just gone bad, you can’t expect the customer’s experience to be sterling 100% of the time.
Dell followed a deliberate policy of bias among its customers, sucking up to the bigger companies that bought millions of dollars worth of their stuff and abusing the “home and small business” segment; scornfully described by one of the senior managers as “pop and ma Johnson who buy one computer every 5 years”.
Acquaintances who worked in sales told me about the way they’d upsell- what I now understand, is a trade malpractice called “bait and switch” (bait and screw, as far as Dell is concerned). These bait and screw tactics involved a confusing array of mail-in rebates, “free” upgrades, finance options and hidden charges.
Pushing the margins down drove several competitors to the edge of bankruptcy. HP and Compaq had to merge to stay afloat.
Now things are different. It seems the consumer has begun to recognize Dell computers as the cut rate trash that they are, and are opting for more stable and better serviced computers from local stores or other vendors. Pop and Ma Johnson are taking their business elsewhere.
What goes up must come down. Anybody remember the Roman Empire?
http://news.zdnet.com/2100-9595_22-5924630.html
HP shines as earnings, sales surge
http://money.cnn.com/2006/08/16/technology/hp_earnings/index.htm
I spent a year at Dell tech support in Bangalore. It was my first job, and I didn’t know what to expect. I took all everything- the job stress, the performance management system and abusive management with a pinch of salt. Its only after I actually quit Dell and joined another firm that I realized how satisfying a job could be. Dell was an island of abuse in an industry where people just want to give their employees a good time so that they stick around.
Dell didn’t have any such concerns.
When I joined Relationship Tech Support, (the group that provides tech support to companies that bring in business in excess of USD 500,000 a year) there were 475 of us in a department that was to have 750 people to handle the total amount of calls offered to the group. In the 14 months I was there, they never saw that figure. In fact, the numbers steadily declined till I left in Aug 2004, when there were just about 300 people. There was a running joke in the HR department that if they had 20 people waiting to collect offer letters for induction into RTS, there would be 25 people waiting for exit interviews. In Oct 2004, the Relationship Support business was closed down and moved to another site.
The Senior Management consisted of arrogant and mediocre imports that lacked cultural sensitivity. Some of them just thought we were a bunch of fools. I remember one presentation given by one of the American managers where he was showing us a bar graph describing bonuses. The bar that denoted a bonus of 7.8% was DOUBLE the height of the bar that denoted a bonus of 7%. Though I flunked statistics in college, I was able to figure out the con.
Well… forget the human rights abuses. What was Dell doing in the Market?
They screwed everybody.
They drove margins down and offered impossible to sustain frills like free lifetime tech support and deep discounts. They were able to blackmail their suppliers into offering them low prices based on volumes. They sold a lot of computers, but then it started to turn sour.
Their corporate philosophy was Cheaper, Cheaper, Cheaper, Faster, Better- in exactly that order. Business units were appraised based on the amount of money they saved instead of the amount of value they created.
When you have an underpaid and overworked lad providing tech support to someone with a $3000 computer that’s just gone bad, you can’t expect the customer’s experience to be sterling 100% of the time.
Dell followed a deliberate policy of bias among its customers, sucking up to the bigger companies that bought millions of dollars worth of their stuff and abusing the “home and small business” segment; scornfully described by one of the senior managers as “pop and ma Johnson who buy one computer every 5 years”.
Acquaintances who worked in sales told me about the way they’d upsell- what I now understand, is a trade malpractice called “bait and switch” (bait and screw, as far as Dell is concerned). These bait and screw tactics involved a confusing array of mail-in rebates, “free” upgrades, finance options and hidden charges.
Pushing the margins down drove several competitors to the edge of bankruptcy. HP and Compaq had to merge to stay afloat.
Now things are different. It seems the consumer has begun to recognize Dell computers as the cut rate trash that they are, and are opting for more stable and better serviced computers from local stores or other vendors. Pop and Ma Johnson are taking their business elsewhere.
What goes up must come down. Anybody remember the Roman Empire?
posted by Ajit Nathaniel at 4:57 AM
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