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"Microsoft and HP Are Failing Me"

John Ludwig talks about his experience buying a new Windows PC -- he was in a rush, and so bought a retail PC instead of assembling one himself:

Fry's had an HP 7410 -- small form factor, quiet, $529, Windows XP MCE. Seemed like a fine deal.

The ensuing 4 hours getting it running were painful. And it all comes down to the economics of the business that Microsoft has created and that the big PC OEMs promulgate. At these price points, the OEMs aren't making enough money to make it worth their while, so they spend an extraordinary amount of effort trying to get you to part with more money post-purchase, and they work hard to collect bounties from various service and software providers.

As a result, you have to wade thru literally hours of crap to get the pc in a reasonable state...

Basically the pc business model as promulgated by ms and big name oems is corrupt. To make ends meet, the oems resort to all this crap that is the moral equivalent of spam -- I didn't ask for it, it isn't explained at purchase time, I never gave anyone permission to slam it all over my system.

I'd rather pay a honest price up front for a system that respects me and is truly personal. No wonder apple is resurgent.

If I'm looking for the greatest weaknesses of people or organizations, the first place I look is at their greatest strengths, taken to an extreme. Arguably, Microsoft's greatest strength over the years has been its OEM model, which enables Microsoft to remain focused on software and farm out all the expense and risk of hardware sales to others. Learning software product marketing on the job in the late 1980s and early 1990s, I came to take it as axiomatic that making software was vastly preferable to making hardware -- hardware is expensive to develop, expensive to manufacture, expensive if it doesn't sell, and the margins are low. (This probably compares quite nicely to the product marketing types coming up through the ranks of Internet startups this decade, and their perception of how preferable Internet businesses are to hardware or software.)

Unfortunately for Microsoft, the OEM model threatens to become a weakness instead of a strength. By enabling the commoditization of the PC business, Microsoft has created a fundamentally flawed industry. PC OEMs have no research and development to speak of -- they simply take the latest hardware from Taiwan Inc. (now becoming China Inc.), tart it up, and ship it. Their ability to differentiate is limited, and most such efforts end badly anyway, so most of them don't try. Their margins are razor-thin, so any company that comes along with more stuff to install (and make users wade through) is welcomed with open arms, as long as they bring their checkbook.

More on this soon.

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