TECHNOLOGY
10.16.98
The McGraw-Hill Companies, Inc. business week
Dell Wants to Make It Easy for You
But does its pre-packaged technology give you enough
choice?
Dell Computer Co. wants to be the personal computer choice for small
businesses, but do small businesses want Dell?
Paul Bell, senior vice-president for the home and small-business group at Dell in Austin, Tex., certainly hopes so. About a year ago, Dell formed this unit to focus specifically on the entrepreneurial market. The company has been forging partnerships with cable companies, telecommunications companies, and Internet service providers as part of its ConnectDirect program. The goal is to create one-stop shopping for small-business technology. Entrepreneurs would buy a computer and preloaded software direct from the company, pull it out of the box, and hook it up to a high-speed Internet connection within minutes.
That's a role currently filled by value-added resellers, or VARs, the local middleman between entrepreneurs and technology companies who in
effect serve as the technology manager for small companies. Dell plans to use the Web to provide a level of customization for small-business
customers that it had reserved for its corporate clients, bringing them tailored personal computers, online seminars, even their own personal account pages.
But is Dell's strategy akin to tactics used by software behemoth
Microsoft: Is it trying to control the small-business owner's path to the Internet? After all, one of Dell's partners is Excite, and Dell is installing the Excite browser on most of its small-business customers' computers and pointing them to Excite's portal, whether you want it or not.
So how much choice do entrepreneurs really have when buying Dell
computers? Bell talked with Business Week Enterprise Online's Jeremy
Quittner about these and other matters facing small businesses. Here's an edited transcript of their conversation:
Q: What has Dell done to win the trust of small businesses? Why
should small businesses trust Dell any more than Microsoft?
A: We are the No. 2 computer systems company globally. We have
achieved the kind of market status that says we have earned credibility from people. Small-business people really rely on that. They realize they are paying a huge markup when they go through the indirect channel.
Q: Has Dell done research of small-business needs and the
market?
A: Quite a bit. We use it as a basis for the types of programs that we
bring out to the customer base. The fact that we are a direct company
gives us tremendous information. We talk to 15,000 small-business
customers every week. We get our teams together and ask, "What are
our customers saying?" People who sell through intermediaries don't even know who buys their products, so they can't keep their fingers on the pulse of the industry that way. We have full-time people whose job is to do that.
Q: Why should a small business shift away from the relationship it
has with a value-added reseller, whom they might trust? Whom
can they talk to at Dell if there are problems?
A: They often misunderstand our service and support and think they can
only get that locally. We have "24/7, 365-days-a-year" service. People
can call us and get experts who are really high level, trained specifically on Dell products. We do on-site service just like resellers do. So, if you've got an issue that requires someone to come out, we work with service partners in every part of the country. We could have someone come out to your place of business and respond in the period of time that is critical to you. [For accounts of more than $50,000], you have a dedicated account representative at Dell. Their job is to take care of you, they get you access to all the services within Dell, and you develop a relationship with them.
There are some VARs that we are actually working with. Those service
providers sometimes come to us because they realize we can give them a
better deal on the product.
Q: What is your strategy with Dell's ConnectDirect partnerships?
A: ConnectDirect is our ability to leverage the direct [sales] model --
working straight with our customers -- and give them fast, easy, and
high-speed access to the Internet in ways that they cannot get today.
We've factory-loaded a very easy sign-on process: Right out of the box, you can be on the Web in five minutes.
The way we want to do this is by working with best-in-class partners
and giving our customers choice. We are not off creating "Dell.net,"
which says if you want to go through us, you can only use our service.
We are saying, ... based on who you are and what your needs are, you
will be able to choose from among these best-of-breed suppliers.
Q: Are the preloaded elements subject to customization? If I don't
want the Excite browser, can I tell you I don't want it?
A: You just don't have to use it. It is pretty straightforward for people to choose not to use it. But we also do customized software loading. So ifthey want the Microsoft Office Small Business Edition or the Pro Edition, or they would like us to add some retail software like Quicken, we'll factory-load all that.
Q: Why did Dell choose Excite as a partner? Excite is the
second-place portal. Why did it not partner with Yahoo?
A: We put out a competitive request for proposals. We said, "Here is
what we are looking for in terms of what our partner needs to be able to do. What are the services you can offer?" And even though they are No. 2 for market share, they came in with a better mousetrap. It was really more about capability and working with our technical team in making sure that it worked really well with our systems out of the box.
Q: Do you think that every small business should have a Web
presence?
A: Before long, every single business and institution should and will have a Web presence. As we go forward, being on the Web will be just like having a telephone number. But increasingly, there are things that the Web is ideal for, for every institution and business.
Q: What specifically?
A: Cost effectiveness and reach. There are ways you can put product
information, marketing material, technical support information ... up on the Web and available to customers very cost effectively. You don't have the expense of mailing things to people, creating paper copies of things. Probably the most leveraged thing about the Web for small business is the explosive growth that a small business will come up with, because they can tap into a much broader marketplace than the one they typically serve locally.
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