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Direct model claims victory

Direct model claims victory

It's official. US users who buy their PCs from a direct vendor such as Dell, Gateway or Micron, will not only save money, but will also probably be happier. That's the unavoidable conclusion of US Computerworld's recent enterprise PC customer satisfaction survey (see page 40 for the survey).

More than 1600 PC buyers at medium-sized and large-sized US organisations answered the survey, generating statistically valid data for the top 10 desktop and notebook vendors.

The research could hardly be more timely. Sales from direct vendors are booming, forcing Compaq to publicly debate the future of its traditional channel approach. Going into the survey, we thought customers might see price advantages of the direct model. But how would their enterprise services compare?

The answer is clear. Selling direct isn't just about eliminating reseller commissions. It's about knowing customers, getting them the latest technology, configuring systems as needed and testing for compatibility and rapid service response. In those and other areas, Dell consistently scored big, almost always among the top three vendors across the 33 desktop and notebook categories measured. Gateway and Micron were just a small step behind. The former was strong in desktops, and the latter very strong in notebooks.

The only channel-based player to match the scores of the three direct vendors was Hewlett-Packard, which continued its remarkable streak of being first or second in every category it competes in across US Computerworld's network, enterprise systems and now PC satisfaction surveys. HP's overall record is so strong it makes you wonder if somehow it has just trained its customers to always report how happy they are.

What about the traditional PC giants? Compaq's results were uninspiring, especially in notebooks; the number one PC vendor was rated average for most product and service categories. Like Compaq, notebook giant Toshiba will find little comfort in its generally mediocre scores. For IBM, the results were more damaging.

Its desktop ratings were consistently below average, especially in terms of hardware quality and cost of ownership. Its notebooks faired better in quality but faced similar value concerns.

From a broader perspective, the success of the direct approach should be seen as a success for our industry. Information technology makes direct vendors' mass customisation and one-to-one marketing possible. It enables them to keep up with ever-changing and highly complex technologies. It's a big step towards real electronic commerce and provides a compelling proof-of-concept story. Other industry sectors surely will notice.

For vendors still using a traditional reseller strategy, this research is perhaps a final warning. The PC industry has found a superior sales and service approach that will only gain momentum as long as PC technology continues to change rapidly. Technology-enabled mass customisation can provide the highest quality and the lowest price. Deep down, channel-based vendors know that tinkering with processes just won't cut it. It would be a dangerous time to remain in denial.


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