PCs: Quality Up, Cost Down

PCs: Quality Up, Cost Down

by / December 31, 1998
Welcome to the world of technology, where change is constant. By the time this article sees print, the hardware specs in the accompanying chart will most likely need to be revised and prices changed. New machines are announced once a quarter or twice a year. Computers continue to get faster, hard drives continue to get larger and more features are added to reflect the current trends, all while prices drop. CPUs now hover around $350, or about $600 for Intel's 600 + MHz Alpha processor. There may be a new popularity in network computers, computers without floppy drives, such as Apple's new iMac.

It is an era in which the customer gets what the customer wants: more for less. Hard drives are bigger, up to 5GB in some, RAM has doubled to 64K, and typical processing speeds are a far cry from 286 and 386Mhz. There is less to change; fewer parts, cables, boards and slots, as companies attempt to set industry standards, bid standards, and contract standards. Surveys show that what government customers want is price, individual configuration considerations, industry standards that remain constant, high performance, and machines that use state-of-the-art technology. Rather lofty goals, don't you think?

It is also the era of choice. Customers can choose the chassis (tower or desk), install RAM from 32MB to more than 300 and video RAM of 4MG on average, select the type of interface card, networking topology and processors of 350-400Mhz.

Configuration considerations keep pricing and purchasing stable over the life of the machine. Compaq's Michael Takemura, product marketing manager for North America, said, "The new flexibility with Compaq's EP and EN units is such that customers can obtain an additional three months at the end of the typical 12- to 14-month lifecycle. This can translate into hundreds of thousands of dollars when you are purchasing 1,000 units at a time."

Increased Manageability and Serviceability

Local and state government customers want serviceability and manageability. Hardware companies have added smart features and SMART hard drives that hold proprietary information. Such features as wake-up on demand and remote shutdown are now standard. The new machines are screwless and much more easily serviced.

"More and more customers are requesting advanced manageability, and we have responded to the market by adding LAN client control, wake-up on demand for energy efficiency, tamper proof machines, asset management features built into the memory chip, and recording devices for tracking PCs," said Brad Westpfahl, manager of personal systems marketing for IBM Global Government Industry. Compaq's Insight Manager is a Web Based Enterprise Management feature which allows IT managers to manage any Deskpro unit from any remote location. Intelligent manageability allows for quick and easy access to the PC. Other features allow asset management to take place on-site or remotely.

Security is also important. Compaq has developed a system using power-on-password and a system with a new smart cover lock that locks down the chassis remotely and sends an alert to a network administrator when the machine is physically tampered with. Other companies have built in LAN management with extensive sensors and protection.

What's Different About the PCs?

Industry experts say that what matters is not a initial purchase price but the cost of operating a PC for the total life of the system.

"Customers need to analyze the total cost of ownership and take into consideration some of the standard features hardware companies like IBM have to offer," IBM's Westpfahl said.

There is not much variance in price, nor is there variance in features. When you compare each unit, you need to look at the producer in addition to the product. Does the company have a single point of contact? Can you do business directly with it? What kind of service and support does it offer? Can you customize your order?

Business Models

Dell has responded to the market by offering a self-contained business division that can assist with purchasing and contracting issues. Dell's direct business model enables it to tailor PCs to the specific requirements of each agency office. The direct model allows Dell to eliminate many unnecessary costs, such as dealer markups. Other companies utilize the value-added reseller model, which allows geographically desirable service and support. Resellers also can provide software and customized training. CompUSA continues to be a leader in this area, with a substantial amount of their contract work coming from state and local governments.

Brand Names Vs. Small Contractors

Diamond Flower Electric Instrument Co. (U.S.A.) Inc., founded in 1985, is a custom computer manufacturer in Sacramento, Calif. DFI provides custom-built systems packed with the latest technology and features. DFI claims that this reduces the total cost of ownership and increases end-user productivity. Pricing is competitive, and parts comply with industry standards. One attractive attribute is that they provide free lifetime technical support, and claim to have the lowest return rate in the industry.

Online Purchasing

Just about every hardware company has a store on the Web where consumers, business groups, education customers, and government clients can configure and customize machines. IBM has an Authorized Assembler Program online and recently configured for Netfinity Direct (online ordering for network servers). All of IBM's business partners are listed, allowing customers to locate authorized dealers for service and equipment. Dell's State Store allows customers to check the status of orders online. Customers can access more than 45,000 support items, including reference materials used by Dell's technical staff. You can also find more than 100 interactive diagnostic modules that can walk the client through system problems. Gateway has GSA Advantage, where customers can use a government credit card, set up a blanket purchase agreement, or use a purchase order. Some companies will soon have a list of Y2K-compliant machines and patches.

Leasing: A Popular Option

Leasing helps extend the life of the PC. Many companies offer flexible leasing arrangements that can meet complex federal purchasing requirements. Gateway offers a specially designed lease that includes termination provisions. Payments can be made over 36 months, and many options are available.

The computer industry seems to be responding to its government clients' needs, yet what we are finding is that the government marketplace continues to be varied and segmented, with no standard model. An aerospace customer has different needs from a law enforcement agency. So the response from the industry has been to configure and customize to meet these diverse needs. Differentiation among the components in PCs and in the price are not that great. What counts is the company.

Cynthia Sistek-Chandler is a San Diego-based writer for software publishers, and software review editor for C.U.E. (Computer Using Educators). Email