Musings on hardware prices - opps - longer

[Alvin Oga]

hi ya

hummm... more babbles from me :-)

On Tue, 23 Aug 2005, Michael T. Halligan wrote:

> Dell has a brilliantly designed manufacturing technique

yup.. build lots of it cheap, and sell cheap ... to flood the market
with their own propiertory stuff ... folllowing the lead of
ibm and hp and compaq ...

> and rolling in his grave over their quality problems.
 
and bad support too

> Dell is something like 37% profitable overall.  I've heard (but not 
> researched) that they are somewhere around 20%
> profitable on average for every piece of hardware they sell.

yup.. because they make their own systems
	- they make their own case
	- they make their own motherboard
	- they make their own bios
	- they make their own cables
	- they make their own cables

	- they haggle down the $$$ for cpu/mem/disks due
	to their shear volume and upfront commitments 

	- watch out when they start to maek their own
	cpu, memory, disks

> My prediction is that Dell is either going to have to change their 
> thoughts on quality, and stop their low-end price-wars, or sell
> off their server manufacturing arm.. The next HP merger screw-up maybe?

manufacturing is outsourced
 
dell is a "marketing/sales" company .. with some proprietory toys
like chassis, motherboard and "DELL" logo 
 
> Who is left? I haven't really researched this in quite a while, but I 
> know (or rather, think I know) that IM purchased Avad, Nimax, D&H, Tech 
> Pacific,
> I might be mistaken, but I thought they also acquired Synnex, and GnR.

i don't buy from any of them .. and obviously nobody else either
lately ???

ingram used to be good 20+ years ago ... when taiwan/china wasn't
in the distribution and computer business

other local hw companies also use synnex for their contract manufacturing
whom have also left them .. job shopping onto the next CM that will
either give them a good price or better service or something else ??
 
> My experience has been entirely the opposite. 

- so they like you ... that's good .. but i do know where they get
  lots of their parts too ... i see their van and driver almost
  each and every time i go shoppping 

> Ingram barely returns your phone calls if
> you're not doing $50k per month with them.

that is whats gonna kill ingram, because now there's competitors to
their 20+ year of old style marketing/sales mentality

 Until recently, I dealt with 
> MAlabs via AIM,
> which was pretty convenient. On the last 100 purchases I've made through 
> MAlabs,

and i bet if you were to show up in 1hr, they wont have it in stock

what they and all PC stores does is to go and order or pickup the
item at the distributor and tell you to show up "tommorrow" after
the distribors delivered the items to the store

you can get almost any time in 1hr now days ...
as long as its still being made vs discontinued items like a p3 cpu

> If there's a better option for small things like this, I'd love to know. 

depends on what you like to do .. and how much you're willing to 
pay, since they obviously is making a profit too on your sales

but luckily, there's little margin on pc parts, so again, as oyu say,
is better to buy parts from vendors you know will deliver to you
or buy dell at discounts

> Fun? Hardware has always been designed for functionality.  Assembling 
> computers is just a nightmare.

depends ...

some folks like to cook .. some folks like to eat .. some folks
like to cleanup .. 

> A real infrastructure requires a massive amount of documentation, 
> process development, and testing.

that's whent eh "real fun" starts ...
	- how good are the specs and docs
	- how accurate are the labor time and hourly fees
	- how accurate are the production line estimates
	...

> I
> could build 200 servers with decent specs for $300k.  I'd rather spend 
> $450k, lay the responsibility of
> warranty, parts replacement, etc, on the vendor, and focus on building 
> well-managed infrastructure.

i'll take the $150K difference in hw costs ...

> DL is Compaq/HP. I've never known anybody to complain about reliability 
> on the DL's.

i've run across a few pesky compaqs ( to fix ) for the customers

> >
> >if the customer is intested in performace/reliability ... than dell is 
> >out of the loop in my book
> >
> Blanket statements are really hard to make on imperial evidence.

it's called, who calls me to come fix their PCs/servers...
guess what brand it is ???

> My rule 
> of thumb is
> to expect Dell gear to be down 30% more often than HP or IBM. That's to 

30% more downtime is like 10x too high  for what i like to see/use

hardware failures should be 3-5% per year ... and most all vendors
are roughly the same with a few exceptions of brands and/or models
or specific parts or "the specific gorrilla" 

> The difference? The Dell environment was more of a pain to install 
> initially, and had more server failures.

:-) bingo ...

> Dell is cheap. Hardware is cheap. If you build right, hardware is not 
> important.

bingo !!
 
> is just cheap commodity crap.

try to convince google of the value of "commodity crap" or not ..

there some of us that like cheap pc class cpu/memory/disk/mb ..
and one does need to know how to fiddle with it to get it 
working right
 
> We talked to a company a few months ago (Hi Jim) with several thousand 
> servers.. 

sounds like cadence...

> Each server in itself is
> important, running a unique simulation. If the simulation crashes, then 
> money is lost.  In that situation, both
> expensive vendor support, and very stable, expensive hardware is a 
> necessity.

that is what i did for 15 years ... day or weeklong simulations 
of TB of data ( even 5-10 years ago )

reliability is important ...  and dead/downtime is not acceptable
under any condition other than scheduled downtime
 
> Hardware is very, very cheap.

yup... and ez to replace and provide for provisions to get around 
anything that is "dead" or broken or flaky
 
> And, yeah, Unisys sucks.  Dell uses them, IBM uses them. HP probably 
> uses them. That's really where

i thought ibm used their own crew ...

hp uses their own crew in certan countries

> Dell falls apart. Their "professional services" and "enterprise support" 
> would be better staffed through ManPower Inc.

exactly ...and she'd be more fun to talk with over coffee/pepsi
while waitng for the ups truck to arrive with the 4hr delivery
of the replacement part

> Dell likes to release broken firmware, as you'd know if you've ever
> called up Dell support only to be  read a script of "did you upgrade
> this firmware?

hehehe .. you notice that too eh ...

> Did you upgrade this firmware? I can't help you until you flash this 
> <click>". I think it's their hobby.

%%%%
%%%% that is precisely how they get to keep your 30% pre-paid support
%%%% contract and NOT have to fix the problem
%%%%

> As a consultant, I have to put my customer's needs first, and foremost. 

always a good thing ...

> The best option out there is the most labor intensive, CFEngine. 

you cannot get me to use cfengine ... though i know others
that swear by it too

what i notice is those that like to use it will not be writing
another "cfengine" replacement for $10K cash if they could do
it in a day .... its trivial to do the same thing differently
and faster and better and more sanity checking

> My experience might be a bit skewed. I've walked into far, far too many 
> contracts in
> the bay area, with the opening words of "the last consultant".. Looking 
> at other people's
> specs, questionable billing practices, and in general just sloppy work, 
> I find it odd that
> businesses in the bay area hire consultants period.

yup... always fun .. to walk in after other people messed up
for whatever reasons ..
 
> I won't even let money be mentioned until I really understand the 
> situation.

yup... and that they have a budget for the wish list they just rambled
off that needs to be done

> is avoided as much as possible. My opinion is if that you can't fix-bid 
> the project in a way that you
> profit comfortably, the price is agreed to be reasonable, and the scope 
> is quickly definable, then either
> you shouldn't be bidding it, or the project needs full-time employees.

exactly ... 

> The product you see is the same product that 100 different manufacturers 

where you buy parts makes all the difference in the world, in my world,
failed parts is unacceptable ...  period, unless its withing its MTBF

c ya
alvin