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To: Captain Jack who wrote (69020)	10/17/1999 7:55:00 PM
From: John Koligman	Respond to of 97611

Couple of columns from PC Week... First - Dell's pact with IBM: The big deal that isn't By Michael Caton October 11, 1999 9:00 AM ET After making this big services deal with IBM, I just have to wonder, What's going to keep Dell around anymore anyway? The new goal at Dell must be to become the low-margin hardware source for one of the few companies that has a hope of making money over the next 10 years, IBM Global Services. Needless to say, direct marketing of PCs to the corporate buyer is probably dead, or, at the very least, has hit its peak. IBM will become as big a source for Dell sales as the phone and Web are today. If you can't tell by now, I don't think this type of deal, or any of the other services deals Dell has made in the past few months, will do anything to help the company grow over the long haul. In fact, the strategy could work to hurt business. Certainly, having the weight of IBM Global Services behind a product will make Dell hardware a more compelling buy to customers searching for enterprise solutions. It dovetails nicely with all that IBM technology they are buying. Without the IBM technology, Dell would remain stuck delivering midtier boxes. Without the IBM services, Dell doesn't really have a means of delivering enterprise-class hardware to customers. The problem in this deal for Dell becomes failure to make contact with the customer on some pretty important deliverables: integration and support. The one thing that Dell does really well—getting the box in the customer's hands on time and at a great price—is important, particularly compared with the competition. However, the impact of price on customer satisfaction diminishes every year as competition erodes margin for everyone. The way to impress customers will be through service and support. With IBM calling on enterprise-level accounts, will customers be thinking of IBM or Dell when it comes time to make the next round of enterprise technology purchases? If I just saw IBM integrate Dell hardware into my infrastructure successfully, I'd ask IBM for input prior to making my next purchase, before I asked someone at Dell. Will IBM recommend Dell hardware before someone else's? I don't think it will, unless IBM is getting a cut. Dell and other PC manufacturers are falling into this trap of thinking that providing services will create brand affinity. It will, only not to the brand they hope it will. Dell's Internet access and online backup services are perfect examples. Dell offers Internet access to its "portal," Dellnet.com. Dellnet.com, in turn, should create affinity through value-added services such as @Backup Corp.'s @Backup, which allows users to back up their data over the Web. For an online backup service, @Backup definitely delivers value, so buyers will be thinking about the service, not Dell. The FUD factor works in Dell's favor. Users will likely worry about getting access to their data should they leave Dellnet.com. A more positive view on the service would be that Dell could actually leverage the service to deliver a PC, with preloaded applications and data to your doorstep. @Backup isn't doing an exclusive deal with Dell, though. The company has similar deals with Gateway, Toshiba and even software vendor Intuit. What do you think will happen to Dell when Gateway signs a service deal with IBM? Write me at michael_caton@zd.com. See more Ins & Outsourcing columns.

To: Captain Jack who wrote (69020)	10/17/1999 7:57:00 PM
From: John Koligman	Read Replies (1) \| Respond to of 97611

Second - The looming demise of the PC By Brett Arquette October 11, 1999 9:00 AM ET People who purchase a PC with the belief that computer literacy is not necessary are kidding themselves. Still, millions of people, including my grandparents, are buying PCs with the mistaken notion that they're no more difficult to operate than VCRs. Many PC owners don't know how to do the basic tasks, such as installing software and hardware and defragmenting a disk drive. And God help them if they ever have to reinstall the operating system. Making the PC easier to maintain would require the companies that produce the operating systems, software and hardware to work together in harmony. This will never happen. It's a problem crying out for a solution. And it's not hard to imagine one: What if I told you that I could provide you with a solid-state device a quarter of the size of a PC that had no moving parts to break? You could run 50 software titles such as Word, WordPerfect, Lotus SmartSuite, Quattro Pro and Quicken, as well as games. You would never have to upgrade those applications because they would be upgraded for you. With this device, you could watch more than 175 cable channels and select from thousands of movie titles that you could watch either on the machine or on the TV in your living room. This device would have a hard drive so large that you could never fill it up. And you never would have to back up files again because they would be backed up for you every night. If lightning hit this device while you were using it out by the pool, you might lose some hair and skin, but you wouldn't lose data—and I could overnight you another machine. There would be no problems with an operating system, hardware drivers or other software. You would simply plug it into your cable box, and you're ready to go. Services for the masses In the near future, services such as these will replace the PC for millions of people who were never cut out to be PC administrators. Thin-client operating systems, such as Citrix MetaFrame running on MS Terminal Server, combined with ISDN, ADSL or cable modem Internet access, will inevitably be the basis of a virtual PC service that will revolutionize the industry. Instead of buying a PC, you would pay the company a monthly fee, and the company would send you a Winterm device that plugs into your new high-bandwidth Internet connection, which links to its service. After powering it on, you would simply hit "connect" and your personalized GUI desktop would pop up on the screen. You could instantly run hundreds of applications without installing anything. Any time you saved files, they'd actually be saved to a server's hard drives, which would be backed up every night. Combine these services with an e-mail account, and watch PC sales plummet. After all, who would want to buy a PC with software that had to be upgraded every year, if you could hire a service to take care of the mess? Many corporations, tired of the cost and IS staff required to manage hundreds of PCs, would jump on it. The technology to build a virtual PC service is here today. Other technologies, such as movies on demand, are probably a few years out. The advent of virtual computing will shift the entire PC infrastructure with such momentum that the PC as we know it today will be used only by a group of oddballs: "computer" people. Brett Arquette is chief technology officer for the 9th Judicial Circuit Court, Orange and Osceola counties, in Florida. He can be reached at barq@iag.net. See more Corner Office columns.