Add Lack of Innovation to Dell's List of Woes

Ann All

Dell just wrapped what has to be one of the worst years in its history -- maybe one of the worst years for any company, ever.

The latest sales figures confirm that it has not regained its longtime title of top PC maker, which it lost to rival HP in 2006's third quarter.

Its list of woes is long and includes a highly embarrassing recall of laptops after several of its machines burst into flames; a tarnished customer service reputation; an SEC inquiry into accounting practices; and stockholders angry enough to sue the company.

Some observers fault the management decisions of recently departed CEO Kevin Rollins, such as his move to go after the high-end enterprise and gaming PC markets. Even once vaunted business practices such as Dell's direct sales model are coming under negative scrutiny.

It's possible that Michael Dell can correct some of these problems as he takes over the company he founded. But even he may not be able to correct what could be a far more fundamental issue: a corporate culture that prizes operational efficiency at the expense of innovation.

According to Cutter Consortium, innovation will become a primary competitive differentiator in today's economy. Operational efficiency has become expected, just like product quality, and thus can no longer give companies enough of an edge against rivals, the firm says.

ZDNet blogger David Berlind agrees. Dell has simply relied on the innovations of suppliers like AMD and ATI, he points out, rather than investing in its own R&D. This lack of internal R&D is an especially big problem in the server and networking infrastructure market that Dell is trying to crack.



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Feb 10, 2007 9:34 AM Ronald J Riley Ronald J Riley  says:
You are right about Dell's inability to invent.  In my opinion Dell has always been a parasite.HP most certainly started out as a innovator but today they are not very innovative.  Both Dell and HP have a huge appetite for real inventors work, and equally big egos and limited ethics when it comes to fairly compensating inventors. Take a look at the scandals which have impacted both companies.  Both companies have been caught red handed with their sticky fingers in others patent cookie jars. And in its'quest to take the market it is pretty difficult to tell the difference between HP and Dell today.Dell & HP are members of the Coalition for Patent Fairness, a group whose idea of fair is being able to take others inventions. In our industry this group is known as the Coalition for Patent Piracy. The group knows no shame. After they pillage an inventors property and rape them they compound the sin by whining about patent trolls. They never acknowledge that those inventors are transformed in mythical nasty trolls by the companies who abuse those inventors, nor do they admit that they could have avoided the problem by dealing in a reputable way with the inventors.When inventors prosper they produce more inventions, jobs, and tax base. When transnational patent pirates appropriate the inventor's work those inventors usually abandon the business and the appropriated invention benefits the transnational and China or India.Invention has always fueled America's economy. While we used to profit from making our inventions that is no longer the case because the manufacturing is increasingly done in slave wage developing countries. This means that retention of our patent property rights is more important than ever. It is the only thing standing between poverty and us. There is a reason that we are seeing more epic patent battles. The reason is that our transnational's and our foreign competitors see profit in socializing American ingenuity.Many tech companies including HP and Dell are both on the same path the auto industry took, just a decade or two further up the slippery slope which did in the auto companies. Dell is in worse shape than HP because they couldn't invent themselves out of a wet paper bag. Since everyone has learned to cut costs Dell needs to either invent or buy inventions. But both HP and Dell have acquired reputations which means that the inventions they need to save themselves will be taken to more reputable companies. It is a fact that the reason Coalition for patent Piracy members are working so hard to weaken patent enforcement is that they know they are dealing with an increasingly more sophisticated inventor community which is really tired of patent pirates.====InventorEd is an approved nonprofit with over 500 web pages which exceed 3000 printed pages. It delivers web content to inventors in nearly 80 countries. InventorEd helps aspiring inventors grow to become entrepreneurs via web content and email based discussion groups where they can get one on one help. In addition to helping inventors learn the business InventorEd is the leader in exposing and reigning in invention promotion fraud. Inventors typically lose between $10,000 and $50,000 to this $500 million annual and growing industry.====The Professional Inventors Alliance USA was created more than a decade ago to protect American invention and encourage innovation. Reply
Feb 10, 2007 9:34 AM Ronald J Riley Ronald J Riley  says:
American inventors saw a need to track congressional legislation and federal policy that impacts independent inventors, small and medium-sized businesses and colleges and universities.The Alliance is the premiere organization in the nation, providing independent inventors a united voice in order to improve public policy.  The Alliance provides legislative counsel, congressional updates and strategy development to its members through a number of vehicles.Additionally, through its speaker’s bureau, Alliance members have an opportunity to provide expert opinion to many of the nation’s top-tier business, technology and mainstream media organizations.Over the years its members have testified before Congress, offered counsel to key Senate and House committee members, and successfully pushed legislation to protect America’s independent inventors.Since its inception, the Alliance has grown into one of the most vocal advocates for America’s patent system.  Examples of areas of our expertise include David Vs.Goliath patent litigation, patent reform, and we have a unique view of patent pirating companies who are associated with the "Coalition for Patent Fairness".Ronald J.Riley, President - www.piausa.org/" rel="nofollow">www.PIAUSA.org - RJR at PIAUSA.orgExecutive Director - www.inventored.org/" rel="nofollow">www.InventorEd.org - RJR at InvEd.orgWashington, DCDirect (202) 318-1595 - 9 am to 9 pm EST.  Reply
Apr 14, 2011 11:07 AM Mike Morris Mike Morris  says:

I've been using DELL hardware for 8 years now and although it's not top notch, I can't complain. Architecture is not their strongest point, nor is it customer support, maybe they don't make the prettiest notebooks out there, but they're a solid company. My 2003 DELL 30 still works to this day, and I'm quite fond of it, and you're right, they don't invest a lot in innovation, they try to keep up with the market instead.

Mike Morris from www.simplysecurity.com/">Security News

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Nov 7, 2011 12:19 PM Diane Diane  says: in response to Mike Morris

You're right Mike that even if they are not having a special design, DELL is a very solid company. I am working at an nodesphere.com/">IT Support New York company and we use DELL laptops. Recently I've bought a Dell M4600 laptop and I am very satisfied with it.

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Mar 27, 2012 5:42 AM Renata Duarte Renata Duarte  says:

Thank you for this informative article.I've recently bought a Dell laptop and I am very satisfied of it.It has a great operating system and also very good www.trendmicro.com/us/home/products/titanium/internet-security/index.html">Internet Protection.

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