Segments: Slices from the Macintosh Life
Apple Versus Dell, or Why Technology Isn’t Just About the Technology
As for the question, “So who knows?” the answer to that last question is, I do. I know. Let me explain. What people overlook is that the advantages that allowed Dell to prosper for about a decade were all fleeting advantages. Dell was for a while an innovative company, but its innovations did not involve product design. They involved manufacturing and distribution efficiencies.
This quote comes from another great post from Daniel Lyons in his Fake Steve Jobs persona. When people try to analyze Apple or compare it to other computer companies, they typically make at least one of two mistakes. One, they think every company that makes computers has the same business model. And two, they assume that technology is the only thing that matters.
When you try to compare Dell and Apple as businesses, all you can really compare are their relative financial positions. The manner in which the companies go about their business are so disparate that you can no more say “Dell should be more like Apple” than you could say “Apple should be more like Dell” ten years ago.
(That’s not to say that the companies haven’t employed similar strategies over the years. Apple’s push toward online sales and reducing on-hand inventory both come to mind. While the latter was most likely influenced by Dell’s success with low inventories and the costs incurred by Apple’s larger on-hand inventories, the former was pretty much inevitable, as many companies were moving toward the Internet for direct sales efforts.)
The Apple and Dell business models are completely different; while Apple has been innovating in a user-facing manner, Dell has been squeezing every last bit of efficiency out of its business and manufacturing processes. The problem for Dell is that there’s only so much fat to trim from business and manufacturing—eventually, you start cutting away the muscle. When you innovate in a user-facing manner, there are far more opportunities for improvement.
The downside of attempting user-facing innovations is that they can be more difficult to achieve. Every attempt will not be successful. It’s also harder to quantify the value of user-facing innovations. With a back-end improvement, you may be able to say “Doing X will decrease the time to completion by three seconds per unit, which leads to a time-saving of Y each year.” When you try something new in the end-user space, however, you can’t really say “Doing A will increase product sexiness by 12%, increasing revenues by a factor of B.” Michael Dell simply can’t walk into work on Monday morning and say, “Today, we’re innovating.” (As an aside, I always get a kick out of those innovation ads from IBM because I know there are companies that basically use the same scenarios that IBM is mocking.)
Over the past few years, Apple has put together a strong track record of reading the market and releasing innovative products, but not even Apple has been perfect. Expecting a company that has little to no experience with user-facing innovation to suddenly turn on a dime and replicate Apple’s success is just folly.
When people look at computer companies, they are often blinded by the technology. They forget that these companies are run by people and, through these people, the companies have developed a culture. Changing the culture of a company is difficult and time consuming, if it is even possible. In The Perfect Thing, Steven Levy has a great comment from Sony CEO Howard Stringer regarding its efforts to launch a music store prior to the iTunes Music Store launch:
“We were well ahead,” he moaned, “but we tried to write the perfect legitimate download experience and got bogged down.”
I’m pretty sure I heard more about this story elsewhere, either from another section of The Perfect Thing or from some other source, but I’m pretty sure the “bogging down” came from Sony’s music label (and from the context of Stringer’s quote, it seemed that “perfect legitimate download experience” was code for “unbreakable DRM”). In discussions about the dominance of the iPod, numerous people have thrown Sony at me as a company that could develop a viable iPod competitor—it has all the individual pieces. What people either don’t know or choose to ignore is that Sony’s internal politics and distribution of power have often hamstrung efforts by one division to release products that may impact other divisions, regardless of the benefits to Sony as a whole.
From a culture standpoint, Dell is in a very similar position to Sony. Not so much that Dell has internal divisions bickering over one another’s products, but that the employees, from management on down, are conditioned to follow the Dell Way. At Dell, if a project isn’t seen as having a direct economic benefit, the project dies. As I mentioned earlier, though, it can be more difficult to quantify the economic benefit of many end-user innovations. I think the combination of these factors leads to more conservative thinking. A conservative approach may lead to a higher percentage of successful projects, but taking risks on less certain projects can lead to larger successes—there are times when it’s fine to string together a few singles, but sometimes you have to swing for the fences, strikeout be damned.
Who knows? Dell may turn it around. Dell may reinvent itself and aggressively attack new markets as opposed to cutting costs in existing markets. Anything is possible. But simply basing your theory on the premise that “Apple did it, so why the heck not” just doesn’t cut it.
Also in This Series
- About My Particular Macintoshes · May 2012
- From the Darkest Hour · May 2012
- Shrinking Into an Expanding World · May 2012
- Growing Up With Apple · May 2012
- Recollections of ATPM by the Plucky Comic Relief · May 2012
- Making the Leap · March 2012
- Digital > Analog > Digital · February 2012
- An Achievable Dream · February 2012
- Smart Move? · February 2012
- Complete Archive