Micron Electronics Inc is hoping to revitalize its flagging PC business by relaunching it as Micronpc.com and switching to a new sales model – subscription computing. In return for a monthly payment, Micron will provide as web hosting, desktop management and internet services and access aimed at small and mid-sized companies.
Micron has been shifting its focus from consumer sales to small and medium-sized businesses over the last year or so, but has encountered stiff competition from direct sales PC vendors such as Dell Computer Corp and Gateway Inc. In its fourth quarter, unit shipments dipped 6% year-over-year and revenue fell 15%. Consumer revenues plunged 61% from the year-ago quarter.
The company will use the technology and expertise it acquire recently from the Los Angeles-based internet content and applications hosting company HostPro Inc, combined with the internal Micron Internet Services division it established back in 1995. To fund the new re-structuring, which includes a $210m investment to build up a services infrastructure, Micron hopes to rely on the profits currently coming out of its SpecTek memory products business, although due to the wax and wane of memory prices, these can be unpredictable.
In contrast, Dell is resisting the move towards services, with CEO Michael Dell recently quoted as saying that helping corporate customers set up and maintain their computer networks will remain an adjunct and not a substitute for Dell’s main business of selling hardware.”
