PC vendors do battle on service differentiation

In the mid-1980s, I was part of a team that evaluated PCs for use at NASA’s Johnson Space Center. Personal computers were still a relatively new phenomenon, and the primary focus of our evaluation testing was compatibility. Would a particular brand of PC work with our standard operating system, application software, printers and network cards? We spent long hours testing every possible configuration of PCs coming from vendors like IBM, Compaq, Acer, Wyse and Sequa.

Beyond compatibility, purchase price was a large consideration. With each PC carrying a price tag of $5,000 or more at that time, the vendors varied widely on proposed pricing. And, there was still significant differentiation among the various vendors’ hardware offerings, from memory expansion capabilities to number of card slots. “Industry standard” hadn’t been coined as a phrase yet, and IBM had just muddied the waters with something called Micro Channel Architecture.

Today’s purchasing picture is quite different, of course. We assume full compatibility when we see “Intel Inside” or find that the PC runs Windows. There’s no need to test applications and peripherals anymore – they will just work. As pieces of hardware go, PCs have become very industry standard, and they are basically interchangeable commodity items.

Of course, hardware vendors hate the “C” word: commodity. About five years ago, the leading vendors shifted the purchasing decision focus to value-added features and services that support the entire lifecycle of a PC – from the time you take it out of the box to the time you retire the computer. These lifecycle services have become the true differentiators among the few PC hardware vendors still standing today.

Gartner estimates that as much as 80% of the cost of owning a corporate PC is attributable to managing and supporting that machine. That would include imaging and installing it; servicing it with upgrades and repairs; supporting the end user when there are technical questions; keeping track of the PC as a corporate asset; maintaining antivirus files, configuration settings and the like; and securely decommissioning the PC at the end of its useful life.

Those kinds of tasks are very “touch-intensive.” That is, people need to touch the computer to perform those functions. What’s more, people of varying skill and pay levels are needed to perform the maintenance and support tasks.

The most logical way to chip away at the cost of owning this PC is to automate the management and support of the PC. Automation can save a company hundreds or thousands of dollars over the life of just one PC. When you multiply that by the thousands or tens of thousands of PCs that large corporations usually buy, the cost savings in these value-add services are staggering.

The competition among vendors to bring significant new value to market through these services is fierce. Huge corporate contracts can be won or lost on the basis of these services. That’s why IBM, HP and Dell are giving it all they’ve got to enhance the value of a “commodity” PC.

Over the next few weeks, we’ll look at what each vendor offers in the way of life-of-the-PC services. This is where the real evaluations – and real savings – are taking place today.