cM :: MORLEY|DIGITAL

I’ve witnessed a very comical phenomena in the system building business in the past several months.  Two companies have come up with the ultimate spin as to why they have not joined the rest of us in the year 2008 when it came to their system configurations.  One spoke very eloquently as to why they were not introducing a new chipset that would allow compatibility with the latest and greatest processor (or was it why they weren’t releasing the latest and greatest processor period?), and the other, well, just randomly talked in a circle about how not innovating was actually innovating.

What was interesting to me and those in the know was the motives behind these public announcements and the real problems they were trying to cover up.  Normally I’d just chuckle and move on, but what bugged me was the subtle and not so subtle inference that those of us who in fact were able to bring these new products to market were somehow doing a disservice to our customers, as if we did not properly qualify the components.  Without offering any specific assertion that new components had critical issues that would have delivered an unacceptable customer experience, these companies rather insinuated that sitting on their hands was actually doing their customers a favor.

Of course, I had to wait until today when they, like all of us, were falling all over themselves to launch the latest NVIDIA graphics solutions before I decided to post this.  Because I knew it would underscore my point. 

You see, our business thrives on being first to market.  Typically a boutique is given very early access to bleeding edge hardware.  We are quick to react, and are great brand holders for companies like NVIDIA, AMD, and Intel.  We are able to qualify, tweak, and productize a component faster than your typical Tier 1 for various reasons.

Some of the delays large companies face in being first to market have nothing at all to do with their postured position regarding “careful R&D,” etc, but rather the normal bureaucracy that the entire industry faces. 

Since one of my companies is direct with Microsoft, I am very intimate with what all it takes to do business with Microsoft on a direct level.  There’s WHQL certification of systems, making sure your models are on your DTOS (Desktop Operating System agreement), creating new images and recovery media for deployment of systems, and registering said images with an Authorized Replicator.  Sheesh, it’s time consuming!  And not one part of that has to do with stability testing, thermals, etc!

Then there’s the creative team that has to create marketing collateral around a product launch.  Pictures, press releases, and web development.  That takes time too!

Then, and here’s the key:  SUPPLY CHAIN.  This is key because it can really stick a company in more ways than one.  First, if you’re deploying your systems into retail, you need a lot of parts quick, and that can be a hassle for a hot new video card or CPU.  Secondly, since you’re playing a price game on margin - you’re ordering quantity to get the best price and that can be a gamble when it comes to an unknown product’s performance and market acceptance.  The larger the company, the more complex this step is.  For smaller boutiques, it’s easy to get 10, 20, or even 30 hot-off-the-press parts for launch, and sometimes that’s all you need if they’re an Extreme Edition CPU or $649 video card.  And believe me, companies HATE missing launch dates, because you’re sure to get a call from your IHV as to why you’re not selling their product but you still expect that quarterly MDF check!

So what happens if supply chain screws up, and you bought too many of the previous generation’s video cards or motherboards…yuck.  And that hot new 45nm CPU?  Yeah, it doesn’t work on that motherboard you bought a metric ton of.  Or those video cards?  Eek, they shrunk ‘em, tweaked ‘em, chopped the price, and released a new model.  And those mobos you bought for retail?  Yeah, underpowered and boring, and the model didn’t sell well, ACK! 

So what do you do?  Well, it seems like the only logical thing is to tell the public that you’re protecting their interests by continuing to sell the old and busted, and all those guys selling the new hotness are really just mavericks preying on your ignorance!

Well, in the words of Al Pacino in Glengarry Glen Ross, “Your excuses are your own!”

Since some people get their panties in a wad when I don’t fully disclose every business venture I’m affiliated with at the start of every sentence that comes out of my mouth, I must again remind people (and probably for the first time on THIS blog) that I do consult for MAINGEAR Computers.

In doing some competitive analysis, I came upon this gem of a post from a boutique builder as to why they are “better.”  To me it sums up the biggest problem facing the boutique business:

But they offer a very limited amount of options and choices.  They also charge more than us for the same options and configs.  Sure people are happy because they can spit out these systems fast, and they know they work.

Our systems are completely different for every system we build.  We have no idea what our next order is going to be.  Sometimes components just do not want to work together and sometimes they work together the first time. 

I’m not sure where to begin on this because it is so full of fail.  First off - being able to be sure that a configuration is going to work is a Good Thing.  That’s the point of a limited number of choices.  If you offer 8 vendors’ motherboards, 6 vendors’ memory, and an equal number of heat sinks, power supplies, etc, there is no way to ensure that all configurations are compatible.  That means there’s a very realistic chance that a customer will order a system that the company has never built before nor fully qualified as a reliable product.  Furthermore, can you imagine the support nightmare?  Personally, if I wanted to call up technical support on a product that I’ve dropped $2,000 on, I’d want to be damn sure that the person on the other end has at least SEEN a configuration like mine before.

I’ve run a real product development lab at a $30 million dollar company.  I know exactly how difficult it is to balance choice versus responsibility when it comes to your customers.  There is a balance and you always err on the side of responsibility.  It is flat out not worth it to add that latest hot motherboard that got a great review on a website just because you don’t want to lose a sale.  You must properly qualify it in your system configurations and in your production process.

To do otherwise is simply irresponsible and reprehensible.