It doesn’t take much thought to realise that the current suicidal beggar-my-neighbour price-cutting in the personal computer industry is thoroughly unhealthy, and Michael Dell, president and chief executive of Dell Computer Corp, the company he founded in his college dormitory eight years ago, painted a gloomy picture of the computer industry this week when he discussed the industry’s responsiveness to customers’ demands. The talk, given as the keynote speech at Fed Micro ’92 in Washington and reported by Microbytes Daily, acknowledged that hardware buyers today can get more for their money than they did just a year ago. But you as customers, he told the audience largely composed of federal workers, are disappointed and frustrated. We as an industry have given ourselves awards. But we haven’t given customers what they want. What federal users want, he suggested, are standards and open systems. But most computer companies, he complained, can’t accept the economic consequences of making open systems. He cited IBM Corp and Micro Channel Architecture, saying that the IBM proprietary bus offers no customer benefit and responds to no demand. As for Microsoft Corp, he described the company’s Excel 4 spreadsheet as Four million lines of code. Most users don’t use much of it, but even what they use is complex. The money should have been spent to improve ease of use rather than the last 10 features. Of the operating systems wars, he said, We should advance applications software, not operating systems. And as for the alliance between Apple Computer Inc and IBM: The world will be over before they find their solutions. Dell also questioned the results of the micro revolution. Have we really made you more productive with these tools? he asked, echoing similar scepticism expressed by Lotus Development Corp’s Jim Manzi. You’ve invested $80,000m in computer products, and it’s resulted in a one percent increase in productivity. After a pause, he added, I would hate to be the chief executive of a company with those results. Dell did predict a dramatic improvement in user interfaces over the next five years. Voice recognition depends on power, he said, and we are going from the present 15 to 20 MIPS to an average of 100 MIPS. Then we’ll be able to use other senses, both sight and sound. But he concluded gloomily, Sales are declining. We will lose dominance to foreign concerns unless we regain your trust and confidence. There is going to be a dramatic reduction in the number of firms producing computer equipment. The companies that survive will have strong balance sheets and the ability to serve their customers.
