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Innovators vs Copiers: HP vs Dell

Hemos posted more than 10 years ago | from the the-battle-rages dept.

HP 392

eaglemoon writes ""The days of engineering-led technology companies are coming to an end," Mr. Dell declared. The NY Times outlines a modern version of a classic innovation theory. Who gets to win in the marketplace - the innovators who invest in R&D like crazy or those that just take cost out of standard products? The current fight between Dell and HP over the printer business is a great natural experiment in verifying this theory." The article does a good job of stating what the real contest is - it's the different theories of corporate structure that's being tested.

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392 comments

LASTMEASURE: THE TRUE OPEN SOURCE ALTERNATIVE (-1, Offtopic)

(GNAA)Zeikfried (782454) | more than 10 years ago | (#9237902)

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That is completely... (-1, Offtopic)

Anonymous Coward | more than 10 years ago | (#9237907)

Cazy! Cazy I tell ya!

When you're a commodity-oriented company... (5, Insightful)

Lord Grey (463613) | more than 10 years ago | (#9237908)

"The days of engineering-led technology companies are coming to an end," Mr. Dell declared.
When your business is in mass-producing someone else's technology, quotes like this are almost mandatory. After all, the shareholders have to be given reasons for liking your company and you're not allowed to use the word "innovative" anywhere in the press release.

Sure, there's something to be said for running a solid business around commodity products, even if they do cost a lot (compared to say, paper plates). It really is a good business to be in. The printer business, which the article focuses on, fits Dell's ideas pretty well.

But when I look for a new computer to buy, I look to Apple and I look at Dell. There's a big difference there.

Re:When you're a commodity-oriented company... (5, Insightful)

MoonBuggy (611105) | more than 10 years ago | (#9238040)

I actually find that quote very short sighted. While there is plenty to be said for being a manufacturer rather than an innovator, it does not mean that the innovator's days are numbered. They both need to exist - only innovators would mean everything would be too expensive and something better would always be just around the corner.

Only manufacturers would be just as bad. What exactly do Dell intend to do if everyone does stop innovating? Eventually everyone has a printer which is at the limit of the existing technology. Since it is not (according to that quote) profitable to research more printers Dell's printer business will dry up leaving them with just the odd repair or replacement to go on. Their PC business would go the same way if people stopped coming up with faster and better CPUs, graphics cards etc.

Re:When you're a commodity-oriented company... (5, Insightful)

Short Circuit (52384) | more than 10 years ago | (#9238119)

What exactly do Dell intend to do if everyone does stop innovating?

Building a limited lifetime into a product is hardly innovation. A plastic shell, cheap plastic parts, built-in print heads--they all lead to a consumer purchasing a new one.

The problem you describe, however, was one of the issues faced in the 1930s. Clothes washers and dryers in particular, had been in high demand. Thus, the companies kept ramping up production. Nobody expected the market to get saturated...

I think it's a problem all durable-goods manufacturers face. Especially those whose new product concepts' markets havn't been saturated yet.

Re:When you're a commodity-oriented company... (2, Interesting)

earlydaysofsin (576939) | more than 10 years ago | (#9238189)

Thats the risk that Dell takes. However Dell's risk is considerably lower in the short and medium term than a company like HP. I'm not saying that innovation is a bad thing (TM) it's just that in the current market it's a bad investment.

Re:When you're a commodity-oriented company... (5, Insightful)

Doomstalk (629173) | more than 10 years ago | (#9238252)

Only manufacturers would be just as bad. What exactly do Dell intend to do if everyone does stop innovating? Eventually everyone has a printer which is at the limit of the existing technology. Since it is not (according to that quote) profitable to research more printers Dell's printer business will dry up leaving them with just the odd repair or replacement to go on.

Two words: ink cartridges.

Re:When you're a commodity-oriented company... (5, Informative)

bandrzej (688764) | more than 10 years ago | (#9238063)

Exactly! I was in a vendor meeting with Dell, and they clearly stated they make Intel, HP, and all the other manufacturers do the R&D...then after a product has been on the market for a while, they take it, partner with that company to get its product, and Dell-ify it with their own R&D. That is *exactly* what happen with Lexmark and the "Dell" printers. All of Dell's printers are manufactured by Lexmark, just different requirements and rebranded.

re: when you're a commodity-oriented company... (1)

ed.han (444783) | more than 10 years ago | (#9238232)

sourcing doesn't just happen with jobs...as the grandparent comment noted, there is a need for both types of approaches. R&D is expensive and time-consuming. this is part of what has helped companies lacking those facilities remain nimble.

ed

Re:When you're a commodity-oriented company... (5, Insightful)

OECD (639690) | more than 10 years ago | (#9238066)

"The days of engineering-led technology companies are coming to an end," Mr. Dell declared.

It doesn't then follow that Dell will prosper. I bought my last computer at Walmart [walmart.com] for $200. That should worry him.

Re:When you're a commodity-oriented company... (0)

Anonymous Coward | more than 10 years ago | (#9238224)

I call bullshit. Which PC did you buy for $200. The closest I found on that site was a shell:

1.4 GHz Duron processor with 3-D Now! technology
128 MB 133 MHz SDRAM Memory
Ethernet Connection

Not included: Hard drive, CD-ROM drive, modem, floppy disk drive, operating system

I don't think Dell is going to be scared of that. People buy from Dell because they have a history of making quality products and supporting those products.

Innovators Rule (4, Interesting)

HBPiper (472715) | more than 10 years ago | (#9237912)

Provided they can outlast the drain on their development dollars and recoup the investment. I think Iridium was a good test for that. The people that bought them out for 10 cents on the dollar are making a killing now.

Re:Innovators Rule (3, Interesting)

earlydaysofsin (576939) | more than 10 years ago | (#9238153)

Unfortunately the real wielders of power in the stock market (insurance companies) are (at the moment) risk adverse ... so a company like dell which does not invest in risky R&D is far more attractive that a company that like HP which is investing in R&D. Given that the current economic environment is likely to persist for the next 5 years, for a lot of R&D companies the question becomes "can we survive 5 years of lack luster investment in the hope that we will rake it in when the the market is more buoyant". Personally, given global IP laws not being as .. stringent as they could be i think that heavy R&D companies are a poor short term investment, average medium term investment and risky long term investment.

The real contest actually is... (-1, Offtopic)

Anonymous Coward | more than 10 years ago | (#9237914)

... getting first post!

missing something here.... (3, Insightful)

krymsin01 (700838) | more than 10 years ago | (#9237941)

I'm sorry, but am I missing something here? There will always be Innovators and there will always be copiers. It really doesn't matter, since the two are in a mutal parasitic relationship. The innovators make some money when they come out with something new in a market that's flooded with clones, and the copiers make money by driving down the bottom line for their clones...

Re:missing something here.... (2, Insightful)

baudilus (665036) | more than 10 years ago | (#9238111)

There will always be Innovators and there will always be copiers.

read: There will always be innovators and there will always be Microsoft.

All kidding aside, this is nothing new. Xerox invented. Apple copied Xerox, and Microsoft copied Apple. It's the same with Japanese automobile makers. The innovator usually never reaps the rewards because the true potential of their innovation is only realized by an outside pair of eyes.

Re:missing something here.... (4, Interesting)

OwnedByTwoCats (124103) | more than 10 years ago | (#9238191)

Such slander. Xerox invented. Apple bought the rights to the invention from Xerox, improved it dramatically, and launched a revolution. Microsoft copied Apple.

Japanese automobile makers led in the development of fuel-efficient, low-polluting engines. Look at how long it took GM, Ford, and Chrysler to sell cars with engines that had 3 or the now standard 4 valves per cylinder.

Japanese automobile makers took American quality control approaches, and actually applied them. And made better cars.

My next car (my current ride has an American brand, was built in Kansas City, but was based on a european design; I've had it for 7 years, and it was 9 months old when I bought it. 150,000 not-so-trouble-free miles.) will be built in Kentucky or Ohio.

Re:missing something here.... (3, Informative)

Anonymous Coward | more than 10 years ago | (#9238269)

>>Japanese automobile makers took American quality control approaches, and actually applied them

After WW2, Dr. Deming [deming.org] was sent to Japan to help in reconstruction. In America, Deming's ideas were universally ignored. The Japanese were led to believe he was the US's leading quality engineer.

And the rest, as they say, is history.

Re:missing something here.... (5, Insightful)

Short Circuit (52384) | more than 10 years ago | (#9238241)

The innovator usually never reaps the rewards because the true potential of their innovation is only realized by an outside pair of eyes.

I disagree with the first part, but agree with the reason. Take PK-ZIP, Ethernet, RS-232, and Eclipse for example. Their creators released the specifications to the world. Suddenly, their product is compatible with a lot more machines out there, so people will buy products centered around it.

  • ZIP became the standard, and PK's closed version of the library was the fastest around for dealing with it. (A big deal when you consider the speeds of commodity hardware at the time.
  • Ethernet still is the standard. There's still lots of money to be made in hardware implementations.
  • RS-232 isn't the standard on the home PC any more, but it's still widespread in industrial equipment. Analysis tools are still big money there.
  • IBM's Eclipse is close to a de facto standard. IBM can still make money off it by developing plugins.


In fact, that's one of those business models that was mentioned in the OSS compatibility handbook [ ;) ] Slashdot linked to last week.

The point is, innovation can survive in a copycat-filled world. You ju

Remember how the biz/tech press makes its money (4, Insightful)

Infonaut (96956) | more than 10 years ago | (#9238195)

No, you're not missing anything. The business/technology press makes money by selling advertising, and conflict stories sell their publications. It's obvious that Dell needs innovators to show them the way, just as it is obvious that innovators can never completely dominate a market as their innovations become commoditized. But don't tell that to the press:

May 27, 2004: "Michael Dell announces that sleeping with underage gerbils is the only path to transformative strategic insights."

May 28, 2004: "Carly Fiorina declares death of gerbil-inspired strategy and outlines new meerkat-based inspiration management system."

Who needs the Enquirer?

who needs the enquirer? (-1)

Anonymous Coward | more than 10 years ago | (#9238211)

A justifiable swipe at /. by implication as just another media whore.

Innovators? (3, Insightful)

sulli (195030) | more than 10 years ago | (#9237943)

Ex-innovators. Under Carly HP is a shadow of its former self.

Then who will innovate? (5, Insightful)

Anonymous Coward | more than 10 years ago | (#9237946)

Will the pace of improvements decrease as fewer companies are willing to invest in research and development? It seems to be the case for the last 4 years.

Re:Then who will innovate? (3, Interesting)

millahtime (710421) | more than 10 years ago | (#9238047)

Will the pace of improvements decrease as fewer companies are willing to invest in research and development? It seems to be the case for the last 4 years.

There are at least 2 companies that will innovate. IBM and Apple are all about it. And in many ways for years they have come up with many of the computing advancements that a few years later show up for the rest of the market.

Dell makes printers? (3, Funny)

night_flyer (453866) | more than 10 years ago | (#9237955)

I need to get out of the house more often...

Re:Dell makes printers? (2, Informative)

Anonymous Coward | more than 10 years ago | (#9238023)

Nope, they spray paint Lexmark printers. Every unit they sell is one less that Lexmark did, not HP.

Re:Dell makes printers? (1)

rootofevil (188401) | more than 10 years ago | (#9238217)

um, scuse me? lexmark still makes the printer, and the cartridges. so how, exactly, did they not sell the printer? just because it has dells logo on it doesnt mean squat.

Re:Dell makes printers? (1)

mrjackson2000 (733829) | more than 10 years ago | (#9238221)

i was thinking the same thing...

New logos (5, Funny)

FattMattP (86246) | more than 10 years ago | (#9237959)

HP
Invent

DELL
Copy

Blah blah lamesness filter blah blah blah.

Re:New logos (1)

TopShelf (92521) | more than 10 years ago | (#9238151)

I follow that logic, but if Dell copies, who pastes???

Re:New logos (0)

Rude Turnip (49495) | more than 10 years ago | (#9238201)

The pasting job has been outsourced to India...profit!!!

VC input (4, Interesting)

Smallpond (221300) | more than 10 years ago | (#9237966)

VCs will generally not invest in companies that don't own their own IP. I'm not saying they know everything, but, to paraphrase Vizzini "never bet against a VC when money is on the line".

Re:VC input (2, Insightful)

2names (531755) | more than 10 years ago | (#9238133)

"never bet against a VC when money is on the line"

Unless the economy happens to be in an investment frenzy, which is cyclical. Just ask the dot-com losers...

"...once I built a dot-com, made it run, brother can you spare a dime?"

And whose technology will they copy? (3, Insightful)

ShatteredDream (636520) | more than 10 years ago | (#9237971)

The real question is, whose technology will Dell copy if Apple and HP fall apart?

Re:And whose technology will they copy? (0)

Anonymous Coward | more than 10 years ago | (#9238049)

well, since they're using rebranded Lexmark printers already, i'm sure they'll find someone.

Re:And whose technology will they copy? (2, Insightful)

elwell642 (754833) | more than 10 years ago | (#9238138)

There will always be more Apples and HPs out there. And there will always be more Dells to copy them.

It's really not a question of "if". Even Bill Gates said that all companies fail (including Microsoft.) It's just a question of when.

Actually... (2, Funny)

Kazymyr (190114) | more than 10 years ago | (#9237973)

Dell innovating? That's unpossible!

HP? An innovator? (4, Insightful)

Em Ellel (523581) | more than 10 years ago | (#9237977)

Boy do things change... well at least labels.

HP was always known for not jumping on latest technologies and only entering market once it is well established, improving on existing technologies. I mean these are the people who passed on original Apple designs and were still proud of it when Apple became successful. They were by far not the first ones to enter laser printer market. It was part of their philosophy.

Now they are the innovators. Curious times. But then again, if Microsoft can claim to be innovators, HP is way ahead of them there.

-Em

Re:HP? An innovator? (3, Insightful)

Anonymous Coward | more than 10 years ago | (#9238037)

HP was always known [...]

for creating new microchip designs, amazingly reliable and fancy sensors, and more. They lead in fields where others refused to go (medical, industrial, and nuclear control systems).

Now HP's marketting team sucked ass, but that's a bit different.

Mature products (5, Insightful)

rueger (210566) | more than 10 years ago | (#9237979)

Who gets to win in the marketplace? The Innovators who invest in R&D like crazy or those that just take cost out of standard products.

The innovation was in creating products that filled a formerly unidentified need. Those lovely early HP calculators are an example. The first reliable laser printers are an example. The personal computer is an example.

When each of these was being developed, the technology industry - heck the whole personal computer industry - was in its infancy, and just about anything with a semi-conductor as "innovative".

Those are now mature products, which is where companies like Dell appear. Their role is not to address needs that other companies haven't seen, but to build a business that exploits mature technology with identified market.

Innovation will come from left field, and will involved products or processes that few of us will see coming.

Re:Mature products (2, Informative)

OwnedByTwoCats (124103) | more than 10 years ago | (#9238058)

HP did not produce the first reliable laser printer. That would have been Apple, with the LaserWriter, in 1985. Mechanicals were supplied by Canon, parts from their small copiers.

Re:Mature products (1)

dildatron (611498) | more than 10 years ago | (#9238107)

And who do you think makes and has made HP laserjets for many years? Canon has made much of HP's higher end laserjets for almost 20 years now.

Thank God I've still got my LaserJet III (5, Insightful)

n1ywb (555767) | more than 10 years ago | (#9237981)

All I can say is "Thank God I've still got my LaserJet III." I'm sure that it will long outlive every POS printer that's being sold today, and I'm sure I'll always be able to find toner cartridges for it.

I hate to see HP forced into competition with a company like Dell. Dell is the Walmart of computer hardware, it's cheap, it probably works okay for a while, but but eventually it's gonna crap the bed and you'll have to buy a new one. HP stuff USED to last forever, but now they're starting to sell wally-peripherals as well. It all goes back to our disposeable culture. But some of us (like me) would much rather pay a little more for something that will last a lot longer, or even pay a little less for something that's already old but that will STILL last a lot longer (like my LJ III).

On Dell's reliability. (2, Informative)

InThane (2300) | more than 10 years ago | (#9238086)

I work at a relatively small company (~120 users) and we're pretty much standardized on Dell equipment. Other than the laptops (which IME are a crapshoot servicewise no matter what company you go with - too many "vertical distance adjustment difficulties") we have had one service call to Dell in the entire time I've worked here, for a failed CPU fan.

Some of the machines are over three years old.

I'm impressed. I may not like Dell as a company, but as far as making a reliable product goes, they've done pretty well by me.

Re:Thank God I've still got my LaserJet III (2, Insightful)

Malc (1751) | more than 10 years ago | (#9238145)

Dell doesn't want their printers to last that long. They want them to fail so that you buy another in a few years. My HP LaserJet 1100 has been excellent. I've had it four years and I haven't even had to replace the drum and toner yet. I hate to think how often the ink would have dried out in an inkjet in that time. It just sits waiting for those urgent occasions when I really need. The only issue was the mutli-feeding problem (there's been a class action lawsuit over that too) and HP sent me a very simple repait kit at no cost to me. I can see this printer lasting for years producing decent quality text and reasonable B&W graphics on demand with no hassles.

Re:Thank God I've still got my LaserJet III (2, Interesting)

b0bby (201198) | more than 10 years ago | (#9238172)

Of course, your III has a Canon SX engine, so the most important part wasn't made by HP...
I'm still happily using a IID so I can save paper by printing on both sides.

Re:Thank God I've still got my LaserJet III (1, Insightful)

jjjefff (525754) | more than 10 years ago | (#9238190)

Dell is the Walmart of computer hardware, it's cheap, it probably works okay for a while, but but eventually it's gonna crap the bed and you'll have to buy a new one.

What meaningless blather. I've owned several Dell computers, and they've all lasted beyond my needs (e.g., still have a 1995 200MHz P2 running at home).

And incidentally, while I know it's very fashionable to bash Wal-Mart (kinda like wearing a Che Guevara t-shirt), what everyone seems to forget is that Wal-Mart has made it possible for lower-class people to live more middle-class lives.

Since when is business streamlining seen as evil? What country do you think this is, anyway?

Re:Thank God I've still got my LaserJet III (1)

vasqzr (619165) | more than 10 years ago | (#9238280)

Today I have to go fetch, exchange at the store, and return a 2 month old HP inkjet.

On the other hand, I've got a 4 year old Laserjet 4100 that's on page 300,000 (which is pretty low for a Laserjet) and has been rock solid those 4 years.

Software Patents (1)

thedillybar (677116) | more than 10 years ago | (#9237987)

I know that the majority of us are strongly opposed to software patents, but where would HP be right now without patents?

Clearly the only incentive for HP to be "innovators" is to be able to market the product without competition for a period of time. How are we opposed to patents, but yet I'm sure most of us will go with HP on this issue, not Dell.

Does the issue have to do with the scope of software patents? And what will likely be the inability of patent offices to find "prior art"?

I'll tell you where... (2, Insightful)

Anonymous Coward | more than 10 years ago | (#9238054)

"but where would HP be right now without patents?"

Same place as they are today.

Patent the printer, copyright the printer driver.

But patent the printer driver? Only someone not versed in the art of software development would say something so ridiculous. And I think I'm putting that very kindly.

NOT CLEAR... (-1)

Anonymous Coward | more than 10 years ago | (#9238083)

or even true that the only motivation for innovation is the hope of a temporary monopoly.

Re:Software Patents (0, Insightful)

Anonymous Coward | more than 10 years ago | (#9238091)

It has more to do with the duration. Once upon a time, your patent for whatever would only last 15 years. Plenty of time to make money, not so long that it choked off innovation.

Today they last 75 years. Thank you, big business, for where this will eventually lead.

Re:Software Patents (1)

nebaz (453974) | more than 10 years ago | (#9238226)

Patents do NOT last 75 years. Patents last 20 years (or maybe 17), COPYRIGHT lasts 75 years. There is a difference.

Re:Software Patents (1)

Smallpond (221300) | more than 10 years ago | (#9238193)

I know that the majority of us are strongly opposed to software patents,

This might be true.

but where would HP be right now without patents?

This might be true also, but how is this related to the above? The problem with software patents is that they patent an algorithm, not an invention. I can get around a hardware patent by doing a function differently. I can't get around a software patent because it is written to define the function, not the expression of the function. In this way, they more resemble "business method" patents than hardware patents.

HP invents? (3, Interesting)

telemonster (605238) | more than 10 years ago | (#9237988)

Haven't read the article but I don't personally consider HP an innovator anymore. When someone says HP, I think "sore sight for a once great American Company." Morale is supposidly in the toilet in the American shops. Maybe morale is better over in India.

HP's test equipment is nice, and HP printers are great. I actually liked Compaq's x86 servers, and hated Compaq's non-business desktops. Never liked HP desktops, never seen much in the way of HP servers outside of the HP-UX systems. Hockey-PUX is wacked, I'd prefer Solaris or IRIX.

Toss the Dell servers in the trash where they belong, give me a used Compaq server over a new Dell rackmount turd any day. I guess Dell desktops are okay, but you really get what you pay for.

I'm not quite sure why Dell is so popular. Poor Gateway, why are they failing when Dell manages to ship such low grade product and run such poor customer service. And where did Austin, Northgate and Swan go.

You, Sir, are a Pip (-1)

Anonymous Coward | more than 10 years ago | (#9238096)

> Haven't read the article but ~.

But nothing. You are Slashdot. Be proud!

Re:HP invents? (1)

Jim_Maryland (718224) | more than 10 years ago | (#9238230)

My company still uses a lot of Dell equipment (desktop and servers), even though many of the administrators are starting to complain about them. One of the biggest complaints at the desktop level is getting a duplicate hardware configuration for a given model. The company I work for delivers "solutions" which include servers and workstations and getting a single hardware configuration is a problem for the PC admins. We order anywhere from 50 - 100 PC's at a time, then maybe a week or two later, order another batch. Deploying an image to these systems can be a bit of a challenge (so I'm told by the PC admins) when you can't be sure what the actual hardware is inside, particulary graphic cards.

The Dell servers aren't quite as bad as our installation process on servers doesn't involve deploying an image. We do however find that the Dell power supplies seem to be the first part that goes on servers.

My former employer used Compaq Pro-Liant servers and I did like them over the Dell servers. The Compaq's seemed to work well for small to medium size configurations.

Poor Gateway, why are they failing

I don't think Gateway does a much better job then Dell in my opinion. In fact, Gateway's case designs have often been undesirable if you have to work on them. Most of Dell's desktop cases are easier to access than the Gatways that I'm familiar with (haven't used them in a couple of years, so maybe they have improved).

Who will win? (4, Funny)

JosKarith (757063) | more than 10 years ago | (#9237994)

Well, my money is on the company whose ink's price by volume is seven times the cost of a good Dom Perignon.

Price (2, Insightful)

tfbastard (782237) | more than 10 years ago | (#9237995)

Competing on price alone seems pretty risky to me. The minute someone else provides the same commodity for a lower price, you're out of business.

IMHO, the key to it all...... (3, Insightful)

MrIrwin (761231) | more than 10 years ago | (#9238007)

....is patents. The patent system needs to be re-written so that it protects real innovation and not real big legal budgets.

Failing this there is a natrual advantage to innovators in legal regimes that allow local embryonic development without legal hassle (inventors get to eat)!

The only thing I care about is (-1, Offtopic)

cyber_rigger (527103) | more than 10 years ago | (#9238012)



Does it have Linux drivers?

Three Phases of Competition (5, Interesting)

bwt (68845) | more than 10 years ago | (#9238014)

Jim Morgan, who used to be the CEO of Applied Materials used to say there are three phases of competition: innovation, differentiation, and commoditization. AMAT wanted to win in the first phase and make do in the second and get out of the game in the third.

A company needs to pick which phase it will focus on in and stick to that. If HP wants to be an innovation company, they need to know when to bail out of a market with no innovation left (like printers).

The Innovators should always win (4, Insightful)

ChopsMIDI (613634) | more than 10 years ago | (#9238015)

The Innovators (HP) could always just raise the licensing prices to the copying companies (Dell).

Without companies like HP that can afford to dump large sums of money into innovation, the industry would be pretty stagnant.

That's exactly why patents exist...to promote innovation....and to protect the innovators from someone who could just take the technology the innovators worked so hard to develop, then mass-produce it for less (and without the R&D cost), effectivly putting the innovators out of business.

"Commodoties" got "invented" first (3, Insightful)

SlashDread (38969) | more than 10 years ago | (#9238017)

No commodoties would *exist* as such, without some *invention*(*) first

Dell and MS are leeches, and as such they work. Now, without any hosts, leeches die.

"/Dread"

(*) I use the term loosely.

If true, new use for patents... (4, Interesting)

linuxtelephony (141049) | more than 10 years ago | (#9238028)

Sadly, I see Dell's quote as probably accurate. And, one of the things the patent system was supposed to help prevent. The innovators were supposed to be able to profit (for a time) from their efforts. Assuming bad business practices and/or poor financial handling, they should be able to stay in business. Even if they are not the market leaders - their technology would be, and they'd still be making revenue from the licensing.

It's the mentality of the Dell's that are hurting us. Innovation is required. Yet, to compete with the Dell's, innovation (and R&D) often suffer because R&D costs money. The companies that truly innovate, that really study and work hard with R&D, will have a harder time in our current greed-driven, shareholder value is the only goal mentality market place. Why? Because the R&D takes money from profits, making margins smaller. Therefore, the copycats (Dell) have better margins because the ride the coat tails of the innovator, without having the spend the money to innovate.

Cyclical Business Models (2, Interesting)

duffbeer703 (177751) | more than 10 years ago | (#9238029)

One of the problems with a pure-manufacturing business model is that without R&D, you are dependent on your competitor's innovations to get out of the "valleys" when demand for current products slackens.

Dell is one of the last great US manufacturers -- everyone else has contracted everything out and become a drop-shipper.

If you look at the great manufacturing businesses of the past, you'll see that once demand starts to get quenched, the business dies. Dell has a need to push out huge amounts of product to make up for the deflationary PC industry... which is a strategy that will eventually catch up.

False question (0)

Anonymous Coward | more than 10 years ago | (#9238036)

HP is not and has not been an engineering company for the past 10 years, and some would argue that I'm being generous.

Strategies (1)

vchoy (134429) | more than 10 years ago | (#9238050)

I would think Dell being the distributor would be the better strategy over beging the inventor. If you look as MS as they have done, pay the royalties (if you have no choice), sell sell sell, profit and then build or buy the invention/technology. Simple.

How do you sell sell sell? Look at McDonald's strategy, "Would you like a printer with that Sir?", cross sell and bundling is the way to success. How to sell even more and profit? Sell Dell branded consumerables (eg cartridges, paper, cable peripherials).

I wouldn't be suprised if Dell at a later stage invents some other proprietary printing technology beside BJ/Laser (please don't reply and say 'Enhanced Dot Matrix'). Thank you.

Dell printers...??! (5, Informative)

adrew (468320) | more than 10 years ago | (#9238056)

Dell doesn't design its own printers! They're simply run-of-the-mill Lexmark units with a Dell logo. But here's the shady part. The Dell printers are modified so that only the special Dell cartridges fit. The Lexmark cartridges had the same pin configuration, but the Dell cartridge holders are shaped a bit differently. If the cheaper Lexmark (or generic) cart is modified a little bit, they work just fine.

I have a laser printer--but Canon seems to be the best deal in inkjets right now. Black carts for most of their printers are only like $7.

2x128Mb = 256Mb for P4 2.8GHz (0)

Anonymous Coward | more than 10 years ago | (#9238059)

Over time, Dell contends it can drive down the cost of printing by 25 percent to 35 percent a page. Shave a third off the cost of a standard color inkjet cartridge for a home printer, now typically $29.95, and the price tag would fall to $19.95.

If it's like their free double memory offer (as if 128Mb is enough to load the damn thing) then the Dell page is A5. :(

(Expires 26/05/2004)

One little thing ... (2, Interesting)

JSkills (69686) | more than 10 years ago | (#9238068)

I know everyone is saying HP innovates and Dell copies. I won't dispute that.

However, one thing I noticed many years ago, when Dell first became known, was that they built their PC cases with simple one-screw-and-open panels pretty much by default. This was a stark constrast to the cases you'd get from any other PC maker. What a joy to be able to easily access the innards of the PC. I think a lot of companies make cases this way now. I'm not sure that Dell started it, but they were the first I'd seen do it and Compaq and HP definitely were *not* at that time ...

Re:One little thing ... (3, Interesting)

attemptedgoalie (634133) | more than 10 years ago | (#9238287)

For a long time it was considered "bad mojo" to make a machine that was easy to service. That implied that the system NEEDED to be serviced, so we'd better make it easy. In the time I've been paying attention to PC systems, it's gone from needing special tools to open, all the way to machines that can be disassembled with one finger. (Not that finger, people.)

IBM had handles on some of their systems, and they were ridiculed because that must have meant that they needed to be carried in to service...

Dell wasn't the first, but it sure was a kick in the butt to the other manufacturers.

Short-sighted (4, Insightful)

ErichTheRed (39327) | more than 10 years ago | (#9238072)

Thinking like this stagnates the industry. Copying existing technology is easy money, but don't forget that some aspects of PC design are nearly 25 years old. The market is ripe for something new...and the company that comes up with something other than a variation on a theme will make lots of money in the long run.

This is the same kind of thinking that has CIOs everywhere shipping jobs off to outsourcers; they figure one sysadmin is much like the other. Technically they are, but if you train your staff well, they learn much more about your core business than any outsourcer would.

Especially in tough times, it's tempting to cut R&D budgets. However, comapnies that abandon basic research do so at their own peril!

apples and oranges... (5, Interesting)

pedantic bore (740196) | more than 10 years ago | (#9238076)

Note that what Dell is selling is "Dell-branded" printers. Dell doesn't manufacture printers -- Dell doesn't manufacture much of anything (at best, they assemble things). HP, on the other hand, actually makes printers. (Who knows, maybe some of the printers that Dell sells will be made by HP some day.)

Dell has sold printers for a long time. As far as I can tell, they target buyers who like to buy everything through one web site. The peripherals they sell are nothing special, and the prices aren't that good, but it's easy and convenient to buy everything with one click.

People who want the best are usually willing to shop around for it. Hopefully HP won't be run out of business if Dell is successful in undermining their market, and the next time I want a good, dependable printer I won't have to buy a re-branded Lexmark or some other similar junk.

This is why Dell (4, Informative)

WCMI92 (592436) | more than 10 years ago | (#9238090)

Is NOT a true first tier company, no matter how much money they paid Gartner to say they are...

Only IBM and HP qualify as such to me in the PC based server world...

We recently had to scramble to do a firmware fix for a customer who had bought Dell servers rather than the HP ones we recommended...

The fault? A bug in Dell's RAID card firmware that would cause the card to eventually destroy the data beyond repair... A bug of the type that would NEVER get out the door in a HP or IBM product... Then there was the server that had the power supply defect that smoked and died... Dell does not do anywhere NEAR the quality control HP or IBM does.

Dell appeals to those who buy strictly on price.

You get what you pay for.... HP ProLiant is by far my favorite server line, and it's not really that much more expensive than Dell.

Re:This is why Dell (3, Interesting)

edremy (36408) | more than 10 years ago | (#9238277)

The fault? A bug in Dell's RAID card firmware that would cause the card to eventually destroy the data beyond repair... A bug of the type that would NEVER get out the door in a HP or IBM product...

Don't be so sure. A few years ago my research group got a couple of brand new, top of the line RS6000 workstations. Set them up, ported the various apps and started running.

Oops, they fell off the network. Hmm. Only way to get it back was to reboot. They promptly fell off the network again. Anytime you tried to move a big file between machines they'd die.

IBM had removed a hardware check for malformed packets in the latest and greatest ethernet cards. Hey- they had software correction in the firmware, that would work fine. Except that nobody had actually bothered to test it, and it didn't work in some cases.

I agree IBM is better than some of the competition, but I don't trust anyone.

If HP is such an inovator of technology (1, Flamebait)

spidergoat2 (715962) | more than 10 years ago | (#9238102)

Why haven't they made an OS to compete with Microsoft. Oh, yeah, they're building PC's to someone elses standard.....and there was that UNIX thing......

Where to begin? (1)

NMerriam (15122) | more than 10 years ago | (#9238105)

"most analysts agree" that HP is the technology leader in inkjet printing?

Hogwash, HP hasn't been on top technology-wise since the mid-90's. Epson, ever since their initial Stylus Color line 10 years ago, has more or less led the inkjet field in the most demanding graphic arts output.

HP is strong in CAD and large format, corporate work and lasers, but any analyst who claims they are on top in inkjets under 20" wide has slept through about 6 generations of printing technology.

Dell can probably easily defeat HP in the home and office inkjet printer market, HP doesn't have anything special for those customers that any other manufacturer can't OEM to Dell for less.

When Dell beats Epson and Canon in a market that is more concerned about quality than price, this theory may hold water, but I can't imagine how they would do it.

Tough times (2, Informative)

SolidCore (250574) | more than 10 years ago | (#9238110)

Dell will have a tough time competing in the printer space because it does not have the proper distribution channel or the right business model for the way people use printers.

"If my daughter runs out of ink while doing a homework assignment, I need that ink cartridge right now. I can't wait 24 to 48 hours" for the cartridge to ship. That dynamic means we need to go to Office Depot...and buy the cartridge right away.

Re:Tough times (1)

spidergoat2 (715962) | more than 10 years ago | (#9238182)

You're exactly right. That's what will keep their printer business from growing in the long run. I need to be able to buy supplies when I need them, without the expense and wait for them to be delivered. On the other hand, the only time I run out of ink is 10:00 at night when the kid is doing homework. You always need a spare on hand.

The article says 'Distributors' not 'Copiers' (0)

Anonymous Coward | more than 10 years ago | (#9238118)

There is a role for both innovators, and those who distribute the innovations. It doesn't say that Dell is a copier.. in fact, dell doesn't build their own stuff, they simply outsource that to the innovators.

The real question is if you can be both a distributor and an innovator and be successful.

Next Advertisement for HP (1)

NodeZero (49835) | more than 10 years ago | (#9238127)

"Dude, you're getting an HP"

Yeah, but what happens when..... (0)

Anonymous Coward | more than 10 years ago | (#9238135)

the printer/all-in-one market saturates?

Classic balance of power (2, Interesting)

ThinWhiteDuke (464916) | more than 10 years ago | (#9238140)

In a given market, there are two ways to have power: either you own the product, or you own the customers. Depending on your industry's maturity and rate of innovation, the balance shifts between the two. If Dell can assemble products that compare with HP's just by using parts from HP's competitors, that means that HP is not innovating enough. Or maybe all major improvements have already been invented in the printer business.

Michael Dell says that his company is not a technology company, it's a logistics service provider. He's right, of course. Logistics become a key issue when products become commodities. Ironically, the frantic race to hardware performance only stresses the critical importance of the logistics.

Innovation? (1)

mseeger (40923) | more than 10 years ago | (#9238142)

Hi,

Innovation is more than adding chips to your ink cartridges to make them less prune to copying. If the innovation does not carry any benefit for the user, the copiers take the field. R&D has often degraded much towards a buzz word generator for the marketing generator.

If you take a look at the car industry: Innovations are nowadays the optimizations of the sound the doors and hood make. They recently started optimizing the sound of cookies (no joke). Well if this is innovation, i take the copy.

Regards, Martin

Pundits want to know. (1)

Politicus (704035) | more than 10 years ago | (#9238144)

Will Lazermonks be able to keep up with Dell volume?

Will Hewpaq resist the cancerous tumor that took down Digital?

JOIN THE REVOLUTION (-1, Troll)

Anonymous Coward | more than 10 years ago | (#9238152)

Go HERE [anti-slash.org]

HP CUSTOMERS ARE MIGRATING TO SUN (1, Informative)

imidazole2 (776413) | more than 10 years ago | (#9238158)

lol... thats the banner I have on the top of this page... lol ^^^

What a bunch of balogney. (0)

Anonymous Coward | more than 10 years ago | (#9238161)

This has nothing to do with "theories of corporate structure" there is no need for such thing. Corporations are created and maintained solely to create wealth for their shareholders. This is the end of the story. This glossy fashion mag version of business in which theories contend is sheer fantasy. There is no theory other than screw the other guy and get to the top. This is true for HP, IBM any corporation you care to thinkg of. Bully your way to the top by any means is the only theory. HP intentionally stands in the way of technology as much, if not more than, many companies.

I don't buy Dell. (1)

daviddennis (10926) | more than 10 years ago | (#9238196)

I want to support companies that innovate, so I generally buy Apple or IBM products. With HP being the leader in printer innovation, I bought a HP Color LaserJet 3500 and have been very happy with it.

There's a visceral reaction in my mind against Dell, simply because I don't want to buy from a company whose business model is simply copying other people's work. I find it, frankly, disgusting.

I want to make sure our industry continues innovating, because if it doesn't, we're all dead in the end. I know Dell makes a decent product, and it's cheap -- but the business model undermines the ideals of creativity and originality I value more than a couple of hundred bucks saved at the cash register.

D

Works for a while (1, Interesting)

Crashmarik (635988) | more than 10 years ago | (#9238197)

Dell has done an excellent job of assembling a catalog. The problem is the only thing in their catalog that they have even a semblance of control over is their desktop PC line. The rest should be labeled Made for Dell by Ching Dai/Lucky Goldstar/Samsung/Take your pick. All the companies Dell buys from have absolutely zero scruples about selling to an office depot, a staples, EDS generic computers. On the PC side you can hit pricewatch and by the complete set of parts for a dell for considerably less than dell sells their PC for.

If you don't innovate you don't control your destiny, Other people do. In Dell's case, Micron, Microsoft, Intel, Maxtor and or Seagate could toss Dell onto the ashheap of history before you could say boo. Dell does little but package their products and put a sticker on them.

That being said a fair comparison between an innovator and a copier in the computer business would be Dell and IBM. Its pretty clear how innovation pays off big time for Big Blue. Its clear how copying is paying off now for Dell, Tommorow is another day.

HP isn't really in the printer business (2, Insightful)

sjbe (173966) | more than 10 years ago | (#9238198)

They made the decision to make the printer as cheap as possible and instead make their money selling ink. It's a very similar strategy to Gillette's famous (almost) give away the razor and sell the blades strategy. However this really means HP is in the ink business moreso than the printer business. And ink is a commodity far more than cheap printers. And the printers aren't really highly differentiated either. HP printers are good but most of the time there are competing products that are technologically just as good. It might be the case that HP chased profits and marketshare but opened themselves to competition from Dell in the process.

If I were HP, I would be very concerned about my cost structure right now. Dell is a reseller of commodity products. Yes they do some R&D but realistically they mostly just manufacture and resell products developed elsewhere. In a battle of selling commodity products, Dell's cost structure is just better. Dell actually gets paid days before they have to pay for products and they have only a few days of inventory on hand at any time. HP does pretty well with commodity products but they are much more similar to IBM than to Dell with multiple divisions, heavy R&D, high end servers and support organizations. This isn't a bad thing necessarily but it does mean that they may eventually have to exit the low end printer business if it becomes any more commoditized much like IBM has had to move upmarket in PC and focus on business customers.

Fortunately for HP, they do have a great brand, strong R&D and a pretty substantial computer business of their own. HP is hardly defenseless. But if this becomes a pure cost battle, HP probably will lose. I think the most interesting part of this battle will be to see how much brand matters here.

Customer Backlash (1)

halo8 (445515) | more than 10 years ago | (#9238205)

I do sales for a big competator of dell

and from what ive seen hes right.. yes small medium sized buisness will go with Dell cause there cheaper

but when it comes time for service and support, cutting edge computing for their cad lab, video, ect.. ect.. and after their 3 years are over their fleeing the company in drove. dells good for the shortsighted IT manager.. IBM and others here for the long run total cost of ownership

HP vs Dell Business Model (2, Interesting)

dsrtegl (584275) | more than 10 years ago | (#9238208)

As a VAR, the main problem that I have with Dell is the lack of any partner programs. As an HP partner, I get good discounts, deals on refurb equipment, and onsite hardware support that is unrivaled. With Dell, I CAN'T resell their stuff because they'll always underprice you. You can buy a million bucks worth of Dell per year and only get 5 points of discount from them.

The HP/Compaq business-grade machines are light years ahead of that Dell trash. Better construction, better components, better design.

-Just my $.02.

MIRROR (0)

Anonymous Coward | more than 10 years ago | (#9238225)

Here [www.vyr.us]
just in case of /. effect

and now you know (2, Insightful)

musiholic (94408) | more than 10 years ago | (#9238227)

why everyone strives to control IP... for if you control the IP, then one cannot copy you to make a commodity of your innovation.

Dell are innovators too, (2, Informative)

anti-NAT (709310) | more than 10 years ago | (#9238231)

because the word "innovate" means to introduce changes and new ideas [emphasis mine] [cambridge.org] . Both HP and Dell are innovators.

What HP supposably does, or used to do, and Dell doesn't do, is invent, which means to design and/or create something which has never been made before [cambridge.org] .

Innovators will cease to exist if invention or discovery never happens, as there will not be any new idears or changes to introduce.

Mr Dell has made a common mistake, most people aren't aware of the difference between innovate and invent.

HP stopped innovating in printers... (2, Insightful)

sphealey (2855) | more than 10 years ago | (#9238248)

HP stopped innovating in printers about 5 years ago (say 1998 or so) and since then has just been releasing variations that require new, propriatary toner cartridges every 18 months. Basically a razors/blades scam.

So, this contest doesn't mean what you think it means.

sPh

Inkjet printers are dead (4, Interesting)

Clueless Moron (548336) | more than 10 years ago | (#9238257)

I got fed up with insanely priced inks, printheads that clog, wasted printouts because one of the damn colours ran out halfway through, and printouts that dissolve when the tiniest bit of moisture contacts them.

So I threw out my last POS inkjet printer years ago, and got a real laserprinter (HP LaserJet 4000TN) instead. The pinnacle of b&w printing. Fast. Stunning quality. Toner cartridges so large that one will last me around 10 years at my current rate of consumption.

And colour? If I want that, I put it on a floppy and get it printed at the photoshop down the street. 60c canadian (about 40c US) for a 4x6 printed on real kodak photo paper, by a real dye sublimation printer that costs as much as a fancy car.

The days of _engineering_ (1)

johannesg (664142) | more than 10 years ago | (#9238288)

...are also coming to an end, then. But not to worry, India and China will be happy to pick up where we left off.
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