Category Archives: Branding

U.S. National-Security Concerns Cast Pall over Huawei

As 2011 draws to a close, Huawei faces some difficult questions about its business prospects in the United States.  The company is expanding worldwide into enterprise networking and mobile devices, such as smartphones and tablets, even as it continues to grow its global telecommunications-equipment franchise.

Huawei is a company that generated 2010 revenue of about $28 billion, and it has an enviable growth profile for a firm of its size. But a dark cloud of suspicion continues to hang over it in the U.S. market, where it has not made headway commensurate with its success in other parts of the world. (As its Wikipedia entry states, Huawei’s products and services have been deployed in more than 140 countries, and it serves 45 of the world’s 50 largest telcos. None of those telcos are in the U.S.)

History of Suspicion

The reason it has not prospered in the U.S. is at primarily attributable to persistent government concerns about Huawei’s alleged involvement in cyber espionage as a reputed proxy for China. At this point, I will point out that none of the charges has been proven, and that any evidence against the company has been kept classified by U.S. intelligence agencies.

Nonetheless, innuendo and suspicions persist, and they inhibit Huawei’s ability to serve customers and grow revenue in the U.S. market. In the recent past, the U.S. government has admonished American carriers, including Sprint Nextel, not to buy Huawei’s telecommunications equipment on national-security concerns. On the same grounds, U.S. government agencies prevented Huawei from acquiring ownership stakes in U.S.-based companies such as 3Com, subsequently acquired by HP, and 3Leaf Systems. Moreover, Huawei was barred recently from participating in a nationwide emergency network, again for reasons of national security.

Through it all, Huawei has asserted that it has nothing to hide, that it operates no differently from its competitors and peers in the marketplace, and that it has no intelligence-gathering remit from the China or any other national government. Huawei even has welcomed an investigation by US authorities, saying that it wants to put the espionage charges behind it once and for all.

Investigation Welcomed

Well, it appears Huawei, among others, will be formally investigated, but it also seems the imbroglio with the U.S. authorities might continue for some time. We learned in November that the U.S. House Permanent Select Committee on Intelligence would investigate potential security threats posed by some foreign companies, Huawei included.

In making the announcement relating to the investigation, U.S. Representative Mike Rogers, a Michigan Republican and the committee’s chairman, said China has increased its cyber espionage in the United States. He cited connections between Huawei’s president, Ren Zhengfei, and the People’s Liberation Army, to which the Huawei chieftain once belonged.

For its part, as previously mentioned, Huawei says it welcomes an investigation. Here’s a direct quote from William Plummer, a Huawei spokesman, excerpted from a recent Bloomberg article:

“Huawei conducts its businesses according to normal business practices just like everybody in this industry. Huawei is an independent company that is not directed, owned or influenced by any government, including the Chinese government.”

Unwanted Attention from Washington

The same Bloomberg article containing that quote also discloses that the U.S. government has invoked  Cold War-era national-security powers to compel telecommunication companies, including AT&T Inc. and Verizon Communications Inc., to disclose confidential information about the components and composition of their networks in a hunt for evidence of Chinese electronic malfeasance.

Specifically, the U.S. Commerce Department this past spring requested a detailed accounting of foreign-made hardware and software on carrier networks, according to the Bloomberg article. It also asked the telcos and other companies about security-related incidents, such as the discovery of “unauthorized electronic hardware” or suspicious equipment capable of duplicating or redirecting data.

Brand Ambitions at Risk

The concerns aren’t necessarily exclusive to alleged Chinese cyber espionage, and Huawei is not the only company whose gear will come under scrutiny. Still, Huawei clearly is drawing a lot of unwanted attention in Washington.

While Huawei would like this matter to be resolved expeditiously in its favor, the investigations probably will continue for some time before definitive verdicts are rendered publicly. In the meantime, Huawei’s U.S. aspirations are stuck in arrested development.

To be sure, the damage might not be restricted entirely to the United States. As this ominous saga plays out, Huawei is trying to develop its brand in Europe, Asia, South America, Africa, and Australia. It’s making concerted advertising and marketing pushes for its smartphones in the U.K., among other jurisdictions, and it probably doesn’t want consumers there or elsewhere to be inundated with persistent reports about U.S. investigations into its alleged involvement with cyber espionage and spyware.

Indulge me for a moment as I channel my inner screenwriter.

Scenario: U.K. electronics retailer. Two blokes survey the mobile phones on offer. Bloke One picks up a Huawei smartphone. 

Bloke One: “I quite fancy this Android handset from Huawei. The price is right, too.”

Bloke Two: “Huawei? Isn’t that the dodgy Chinese company being investigated by the Yanks for spyware?

Bloke One puts down the handset and considers another option.

Serious Implications

Dark humor aside, there are serious implications for Huawei as it remains under this cloud of suspicion. Those implications conceivably stretch well beyond the shores of the United States.

Some have suggested that the U.S. government’s charges against Huawei are prompted more by protectionism than by legitimate concerns about national security. With the existing evidence against Huawei classified, there’s no way for the public, in the U.S. or elsewhere, to make an informed judgment.

Dell Reloads in Mid-Market Data Center

Last week, Dell announced a fusillade of products for small- and medium-sized enterprises looking to benefit from converged, virtualized data centers.

Depending on one’s vantage point, Dell proactively announced the products to offer its mid-sized enterprise customers interoperable solutions that will allow them to derive efficiencies from data-center automation;  or it made the announcement reactively, in a bid to preclude incursions into its installed base by Cisco, IBM, HP, and perhaps even Oracle, which has yet to play the data-center-hardware hand that it was dealt in its marathon acquisition of Sun Microsystems.

In receiving an update yesterday from Brian Payne, director of Dell PowerEdge servers, and Mike Roberts, senior manager of Dell PowerEdge servers, I was struck by how much emphasis the Dell spokesmen placed on two key themes: openness and innovation.

For Dell, architectural openness is defined by interoperability, adherence to industry standards, and customer freedom from proprietary lock-in. Dell draws a distinction between its interoperable approach to data-center networking and the proprietary offerings of Cisco and, increasingly, HP. Dell contends that customers that adopt  converged data-center solutions from HP or Cisco — encompassing servers, storage, networking, and virtualization — could find themselves tied to a vendor that stops innovating. For those customers, the result could be competitive disadvantage, especially if their counterparts patronize vendors  — for instance, Dell — that offer an interoperable, open model.

This leads to a discussion of innovation. Dell is at pains to stress that it has innovated and continues to innovate in the data center. Indeed, while there’s nothing revolutionary or dramatically disruptive in Dell’s new slate of product announcements, the company is making noteworthy advances in its server architectures, its storage offerings, its management software, and its support for virtualization. It’s also innovating, through its Dell Business Ready Configurations, in offering preconfigured solution bundles to mid-size enterprises in target vertical markets.

Although Dell suffers from a brand-image hangover that has proven difficult to shake,  the company has escaped from the ghetto of white-label box vendors. To be sure, Dell still has chapters to write in its data-center narrative, but it is proving adept at devising and deploying viable technical architectures and business solutions for its target markets.

In that respect, what Rob Enderle, principal analyst at the eponymous Enderle Group, told Channel Insider rings true:

“The market likes choice and specialization. No one vendor, since IBM owned this market, has been able to be expert enough at all business sizes and types providing room for each vendor to specialize and carve out a market.”

“Dell tends to favor firms who want to do much of the work themselves, aren’t particularly interested in global services, and want a hardware vendor who is at arm’s length from software to avoid lock-in. There appear to be enough of those folks to sustain Dell.”

I generally agree. Moreover, I think a case can be made that those customers, once they’ve made a significant data-center buying decision, are unlikely to switch vendors unless they’re given a compelling reason to do so. Usually, though not necessarily, that impetus would involve their incumbent vendor falling woefully behind the innovation curve over a sustained period.

Dell is cognizant of the risk, which explains why the company is pushing the innovation theme so forcefully. It wants customers to understand that its interoperable converged data center doesn’t involve an innovation tradeoff in relation to alternatives from IBM, HP, and Cisco.

Accordingly, Dell draws attention to the fact that its new blade-server hardware features the latest industry-standard microprocessors from Intel (in the PowerEdge M710HD) and AMD (in the PowerEdge R715), not to mention an interesting utilization of general-purpose GPUs in its PowerEdge M610x.

Similarly, Dell cites automated data tiering and performance improvements in its EqualLogic PS6000XVS and PS6010XVS storage arrays. It also talks up the performance advances in its PowerVault MD3200 and PowerVault MD3200i storage arrays.

On the networking side, with the release of PowerConnect-J series of products, the first offerings derived from Dell’s OEM agreement with Juniper, Dell emphasizes that its customers can rely on Dell’s networking partnerships to ensure that they don’t suffer from Cisco envy. There is a similar message in Dell’s extension of the PowerConnect B-Series of chassis-based switches OEMed from Brocade. which recently gave its own notice that it has its head and heart back in the enterprise-networking fight.

Dell also draws attention to energy-efficiency enhancements delivered in its M1000e blade-server chassis, and it notes systems-management updates to its Lifecycle Controller, Chassis Management Controller, and Integrated Dell Remote Access Controller (iDRAC). Yes, a lot of this is rustic meat and potatoes, but it’s all part of the data-center buffet, and Dell needs to demonstrate that it hasn’t forgotten to provide  a full menu.

When I spoke with Dell, I got the feeling that it fears Cisco most of all. IBM plays upmarket, mostly out of Dell’s neighborhood, and HP is a known commodity — in more ways than one — perhaps with a reputation for enterprise innovation that is no longer warranted under the grim cost-cutting scythe of Mark Hurd’s technocrats of doom.

Cisco, though, seems to command Dell’s full attention. There appears to be a belief within Dell that Cisco won’t be content to spread its Unified Computing System (UCS) for data centers exclusively to high-end enterprises and cloud-based service providers. That assumption is probably correct. Dell has reason to be concerned.

Then again, healthy paranoia never hurt anybody. If concern about Cisco keeps Dell focused on delivering solutions to its core customers in the middle market, the preoccupation will have been a positive stimulus.

As a company, though, Dell might have a better chance defending its turf if it put more resources into its SME and enterprise strategies and product portfolios and proportionally fewer resources into consumer markets, where it seems destined to lose market share and squander brand equity.

Why ODM Evolution Puts HP and Dell at Risk

The mounting suicides at Foxconn have put that company squarely in the media spotlight, and not in a good way. Those deaths are human tragedies, and one can only hope that the factors that contributed to them will be identified and addressed so that similar incidents can be prevented.

As the vast size of Foxconn’s manufacturing plants and campuses attest, contract manufacturing has grown into an enormous business, one that continues to evolve far beyond its humble origins. In the past, contract manufacturers built or assembled finished products on a third-party basis for brand-name consumer-electronics companies. In recent years, however, their mandate has expanded.

At first, the business bifurcated between those delivering outsourced electronics manufacturing services (EMS) and those categorized as original design manufacturers (ODMs). As the names suggest, the former restricted itself to providing traditional contract manufacturing whereas the latter offered design and development as well as manufacturing services.

Until  recently, as Joseph Wei wrote last year, Foxconn, Flextronics, Jabil, Sanmina and Celestica were classified  as EMS vendors, while companies such as Compal, Quanta, Wistron, Pegatron (ASUSTek),  and Inventec were deemed ODM vendors. Increasingly, though, the distinction between the two classifications has blurred.

The aforementioned companies are extending and expanding their capabilities. Acer founder Stan Shih has noted that bare-bones EMS companies eventually will disappear or transition into what he called design manufacturing services (DMS). That’s a transformation Foxconn and others are undergoing, strengthening their R&D and design services to offer more value to consumer-brand clientele.  In adding design and development to their services portfolio, companies formerly in the EMS business mitigate distinctions between themselves and their ODM counterparts.

Although many of these firms originated in Taiwan, nearly all have Chinese operations, which are growing quickly. Like China itself, these companies are eager to ascend the value chain. Cut-price manufacturing of consumer electronics has been a good business for them, but the margins are wafer thin and the competition is fierce. (Then, of course, there are the dispiriting and sordid issues relating to sagging employee morale.) The more value a company can offer its consumer-brand clients, the more margin and profit it can make.

Now let’s turn this around, and look at it from the perspective of shareholders in the brand-name consumer-electronics companies availing themselves of the services of Foxconn, Wistron, and Quanta. For a Dell or an HP, the obvious appeal of doing business with a DMS vendor is that it reduces your development and engineering costs, especially as you outsource a greater proportion of design and development to a third party.

As that happens, however — at least in PCs, netbooks, tablets, and even smartphones — the value of the brand-name consumer-electronics firm increasingly inheres in the commercial appeal of the brand. But in little else. If HP or Dell ceases to design and develop many of its products, what is its value in the marketplace? Moreover, what is its competitive differentiation or barrier to competitive entry? Such companies, at least in these particular markets, are only as strong as their brands.

After all, a competitor can easily contract with ODMs or DMSs to have similar, if not identical, products brought to market. As the ODM assumes a greater share of value creation in its bid to attain better margins, it effectively gains more power in the broader ecosystem. Brand names will depend on it to provide designs and development as well as manufacturing. But that design and development is not exclusive; it can be provided to any company willing to do business with it.

This is one reason why Stan Shih said earlier this year that American PC vendors HP and Dell might eventually be rendered extinct within the next 20 years. (Conceivably, it could take less time than that.)

Said Shih:

“The trend for low-priced computers will last for the coming years. But U.S. computer makers just don’t know how to put such products on the market. U.S. computer brands may disappear over the next 20 years, just like what happened to U.S. television brands.”

There’s a real danger that, at least in the realm of PCs and related products, America’s top vendors have sacrificed long-term viability for a short-term reductions in operating expenditures. In transferring design and development overseas, increasingly to China, what defenses do they have against lower-priced offerings that essentially will be the same as their own products. Their only defense will be provided by their marketing departments, which will promote brand identity and equity. The care and feeding of those marketing departments, paradoxically, will result in higher corporate cost structures than those incurred by their Asian (increasingly Chinese) rivals.

It’s a daunting dilemma, one that Apple has been keen to avoid. While Apple uses contract manufacturers such as Foxconn, it has been careful not to outsource its storied design and development to companies overseas. Unlike its North American PC rivals, Apple sees design and development as integral to the value of its brand. For Apple, the brand isn’t just, well, the brand. Instead, the brand derives its power at least as much from design and development (R&D) as from advertising and marketing prowess, though Apple is undeniably skilled in those dark arts, too.

Apple knows that product differentiation, based on the technological innovation, still matters. HP and Dell might have to learn that lesson the hard way.

Apple Vaults Past Microsoft in Market Cap, but Markets Never Sleep

There was considerable discussion last night, continuing through this morning, about Apple supplanting Microsoft as the technology company with the largest market capitalization.

The discussion is warranted. When a changing of the guard occurs at the top of the heap — even if it’s a heap built on ever-shifting market valuation  — people will notice and try to invest great meaning in the event.

At a basic and literal level, of course, it means that the market ascribes greater value to Apple than to Microsoft. In terms of mindshare and brand, Apple has been outgunning Microsoft for some time, and the market now believes that, based on where the two companies stand today, Apple is a more valuable company that Microsoft.

What you need to remember about markets, however, is that they’re dynamic. Every day, they rise and fall, twist and turn. They never stop. They aren’t like the World Cup, for example, where a tournament is played, teams are gradually eliminated and one eventually claims the title, all its own until the next World Cup in four years.

On the market, nothing is ever fully settled. There’s no time to celebrate a milestone, because any milestone achieved is arbitrary and fleeting.

So, while I think it’s interesting that Apple has surpassed Microsoft in market capitalization — and while I agree that it says much about both realities and perceptions of both companies in the recent past and in the here and now — I also realize that the market is not finished taking its snapshots and making its sometimes capricious determinations.

Today is another day, and tomorrow will be another. Considering all the ferment and volatility we’ve witnessed in the technology sphere during the last couple months, one arguably could make the case that neither Apple nor Microsoft will necessarily accrue more relative strength during the next several years.

Obviously, Microsoft’s past-performance chart, as well as its current struggles, looks worse. It’s by no means certain that Microsoft can remake itself as its core franchises — Windows and Office — are threatened by a broad-based transition to cloud computing.

Similarly, though, the snapshot the market took yesterday might have captured Apple at its peak.  Apple is under attack for its App Store policies and practices, and its ascendant iPhone is likely to meet stiffer competition in the smartphone market from Google Android-based handsets, RIM’s BlackBerry (still a force in enterprise accounts, despite what you might have heard), HP’s Palm, Nokia (though that’s less certain), and even Microsoft, which is in the process of reanimating its moribund mobile business yet again.

Let’s not forget, too, about the Chinese handset players, who are likely to be major forces in their home markets and might not be content to play the comparatively passive role of software licensees.

Clearly news of Apple usurping Microsoft as market-capitalization king was deserving of notice and commentary. We need to remember, though, that it’s only a snapshot in time, and that markets — the public markets in which stocks are traded and those in which products and services are bought and sold — never sleep.

As Belkin Ramps Home-Energy Management, Where’s Linksys?

As Belkin ramps up its smart-grid activities in electric-vehicle charging and home-energy management, an obvious question arises: Where’s Cisco?

Specifically, where’s Cisco’s Linksys unit, the business that competes against Belkin in the home-nettworking market with a portfolio of wireless routers and other access gear?

Linksys would be a natural player in home-energy management. In fact, it wouldn’t be a stretch to imagine Linksys offering home-energy management or vehicle-to-grid (V2G) applications in residential and commercial environments.

True, Linksys already has powerline products, which were reportedly involved in Cisco’s smart-grid, home-energy management initiative with Duke Power. Nearly a year ago, speculation mounted regarding the imminent arrival of Linksys-branded, home-energy solutions.

Those products have yet to arrive on the market, though. Here are some scenarios that attempt to explain the Linksys no-show.

1) Patience — they’re still coming.

For all I know, Cisco could be on the veritable cusp of making a major Linksys home-energy-management announcement. Such an announcement might have been planned for months, and it might be made within the next few weeks.

2) The best smart-grid opportunities are elsewhere

Cisco might think the smart-grid market’s low-hanging fruit does not include home-energy management systems connected to smart meters. Indeed, considering all the infrastructure upgrades at utility data centers, across transmission networks, throughout distribution facilities, and spanning mesh networks that connect everything together, Cisco conceivably could have more than enough on its smart-grid plate.

What’s more, the home market might prove a tougher nut to crack than the aforementioned areas, most of which are, to varying degrees, “now” markets.

In this scenario, Cisco is treating home-energy management as a secondary consideration, a market segment to be addressed at a later date.

3) Maybe an all-Cisco-branded solution is in the works

In a way, this scenario connects to the first one, and maybe even to the second. Perhaps Cisco is putting together a utility-friendly end-to-end solution that will omit Linksys-branded products. I don’t know whether this scenario is probable — the Linksys brand has consumer cache, and it could be leveraged accordingly — but it can’t be dismissed.

4) Perhaps Cisco is asleep at the switch

Cisco is busy on multiple fronts across a growing number of technology-related markets. It’s entirely possible that Cisco’s market reflexes have slowed, and that it was beaten to the punch by a nimbler rival.

It’s possible, but I’m not buying it. John Chambers and his team waste no opportunity to cite the smart grid’s commercial potential and to emphasize Cisco’s singular suitability to address it. I don’t think Cisco has forgotten about this market.

In all probability, a hybrid of scenarios one and two explains the low profile Linksys and Cisco have projected in home-energy management.

Dell at the Crossroads

As I read the news coverage of Dell’s fourth-quarter financial results, I noticed a salient question from Shannon Cross of Cross Research:

“You have higher revenue but we didn’t see it on the bottom line. The question is, what is the potential profitability of their model?”

That’s a good question. I don’t have the answer, and I’m not sure Dell does. Which begs another question: Just what is Dell’s strategic focus?

The company is caught between a rock and a hard place. When Michael Dell returned to the company, he said he would boost gross margin and find a way to bring back the balanced profitability and growth for which Dell was known in its halcyon days.

He’s struggled to recreate the old magic, but it’s not because he’s doing things differently from how he and his team did them previously. In fact, the problem is that Dell hasn’t adapted enough to current circumstances. Dell needs to make some hard choices, and that means answering some difficult questions.

For example, should it continue to play in the consumer-PC market? I think the answer to this question depends primarily on whether it has the wherewithal to succeed in the market, and secondarily on whether the company can reduce its component and production costs to the point where it makes decent margins on sales. As things stand, Dell isn’t getting it done, and one has to wonder whether the situation will change. As it slides down the PC market-share charts, its economies of scale won’t improve.

The company also has a branding problem in the consumer space, and that exacerbates the situation. The tarnished brand can be burnished, but that will take sustained effort and resources, both of which might be more gainfully employed in other areas of the business.

Recently, Dell has added a smartphone and a five-inch tablet PC to its consumer-product portfolio. I understand the motivations. Dell wants to get a piece of the relatively high-margin smartphone market, and it’s also keen to ride the iPad wave in the seemingly resurgent tablet space. However, does Dell have a market mandate to play in these spaces? Does it have a reasonable expectation of being anything more than a non-medal contender in those areas?

A given market segment might be attractive, for reasons of margin or other considerations, but not every company should try to compete in it. The dynamics of the aforementioned consumer segments overwhelmingly favor the top market-share players, and I don’t think Dell can become a leader in smartphones or tablets, especially with products that seem compromised, inspired by calculations of margin percentage rather than by an implicit understanding and appreciation of consumer interest.

On the other sides of Dell’s business, there’s promise. In the SMB and enterprise markets — as well as in verticals bolstered by its acquisition of Perot Systems — Dell can compete effectively and win. It has a decent brand, it has the customer relationships, it has a reasonably attractive product and services portfolio, it’s growing its profile in the emerging BRIC economies (though I wonder whether any technology company that is not of China can truly thrive for long in the Chinese market).

In those business-oriented markets, the company also possesses a good appreciation of what the customers want today and what they might want tomorrow. As some news coverage suggests, Dell might be discounting more than is necessary to maintain presence in SMB, enterprise, and government accounts. But, with careful calibration, that problem can be readily fixed.

Another area that Dell needs to reconsider, on the product side, is its networking strategy. I think this is an area where it cannot be ambiguous. Dell can follow HP’s lead, and go all in against Cisco as a direct competitor, or it can to take a software-based, services-led approach that is agnostic toward network infrastructure, responding impartially and objectively to customer needs. Sometimes that will mean working with Cisco and its gear and sometimes not, but it doesn’t entail the same stark dynamics as an unambiguously antagonistic relationship.

Here’s the question that should drive that decision: In all honestly, and without the reality distortion that comes form wearing one’s own marketing goggles, does Dell believe that enterprise customers want the integrated, proprietary data-center pitch of Cisco’s Unified Computing System (UCS)? If Dell believes that’s what enterprise customers want, and that HP will follow suit once it has integrated 3Com into its full-service offerings, then Dell probably has no choice but to acquire and own the necessary networking assets to play the same game.

If Dell doesn’t believe that UCS is what customers want, that customers will seek an open, interoperable approach to data-center integration, then the company ought to take an IBM-like, integrator’s approach to the market. It can leverage Perot, focus on extending its software portfolio in areas such as data-center management and orchestration, build value at the application layer, investing in the glue that brings everything together rather than in the underlying plumbing.

Dell knows what its customers are telling it. The company just has to listen to what’s being said.

Dell’s Consumer Debacles Continue

I’ve remarked before that Dell should rethink its strategic priorities. It doesn’t have the depth and breadth — not to mention the prodigious resources — of a Hewlett-Packard (HP).

If Dell is to succeed, it will have to focus on a specific set of customers in defined markets. The company needs to stop trying to be all things to all people. That just isn’t working.

I think Dell should place more of its bets on SMB and enterprises markets, and that it should begin withdrawing resources from the consumer space. Just as Microsoft is hopelessly tone deaf when it comes to understanding consumers, Dell is similarly out of tune and out of touch.

Dell’s disconnect with consumers doesn’t just relate to its brand, or to its marketing prowess, or to the fashionability and design of its products relative to those of its competitors. The problems run deeper than that. At a fundamental level, Dell is attitudinally and philosophically maladjusted for the consumer space. To make matters worse, the condition is chronic and seemingly permanent.

How many times have we read or heard about the company’s ham-fisted dealings with exasperated consumers? Well, add several more instances to the list, as a recent piece in the Wall Street Journal demonstrates. (For additional flavor, read the comments that accompany the story.) A blog post at the New York Times echoes the frustrations of customers who placed their orders with and trust in Dell.

As many of you might have heard, we just experienced the holiday season. Typically, that’s a period where people buy gifts, including computers and consumer electronics, for their family and close friends. You would think that Dell, as a putative purveyor of consumer products, would understand the seasonal demand and the consumer expectations that come with it. But you would be wrong. Dell apparently has no clue.

The WSJ story recounts that many would-be Dell customers made orders well in advance of the holidays — sometimes months ago — only to be dismayed as delivery of their goods was repeatedly delayed, sometimes beyond the holiday period.

Quoting disaffected Dell customers from the WSJ story:

“I ordered an Inspiron 17 on NOVEMBER 28, supposedly to be delivered on Dec 14. Just checked the status page, and it has been delayed for the fourth time and now not set to deliver until JANUARY 7, 2010!,” wrote one customer.

Said another: “I haven’t received a single email from Dell, either proactively about the delays or in response to the two emails I have sent…Some people here report problems cancelling orders. I can’t even get in touch with anyone to be able to talk about cancelling mine!”

Dell didn’t respond to a request for comment. But on its blog, Dell blamed the delays on increased demand for computers and an inability to get the appropriate components from suppliers.

Perhaps I’m being unreasonable, but shouldn’t Dell, as a consumer-serving PC company, have anticipated consumer demand for its computers? Other PC vendors seem up to that task. And shouldn’t Dell have ensured that it had an adequate supply of components at hand? Why market and sell PCs if you have no means of, you know, actually assembling them and getting them to customers? It’s unconscionable, and it provides further evidence of why Dell needs to get its consumer house in order or get the hell out of it before it burns down.

The WSJ story, written by Ben Worthen, ends with this paragraph:

In the current blog post dated December 17, Dell offered to send people who were waiting for computers intended as Christmas gifts a holiday card to stick under the tree instead. That didn’t go over so well. The first response: “Thanks Dell my son will be so thrilled to receive his holiday card instead of his netbook, you really came through this time!!”

A holiday gift card, at Christmas, instead of a computer? This is a company that just doesn’t get it.