The NY Times reports that Radio Shack has laid off 400 employees, and notified them by e-mail. The electronics retailer (and HP and Sprint/Nextel retail channel partner) cut the jobs mostly from its headquarters staff; it has also closed close to 500 stores has consolidated its distribution centers and product lines.
Aside from the HR faux pas, Radio Shack has been relatively savvy about how it uses technology to drive the company. But the company is suffering for the same reason that many small VARs are suffering–what was once a business that thrived on upgrades and tweaks and personalization has become a commodity business that is increasingly dominated by big box retailers and manufacturer direct sales.
Radio Shack’s move toward sales in stores based on a more broad appeal may have made sense a few years ago, but based on personal experience, I’m betting that it’s cut down on their retail foot traffic. In the past year, I’ve stopped going into stores because they no longer carry the kinds of cables, adaptors and other techie niche products that used to pull their core audience in–which in the past they had successfully converted into larger sales. All that specialty stuff is online now — which doesn’t help them any, because the whole reason Radio Shack got my business in the past was convenience (their ubiquity meant I could find one close by) and instant gratification (I could always get it cheaper someplace else, but I’d have to wait).
In other words, Radio Shack has picked the wrong customers to focus on, and the wrong way to interact with its best customers. Strikes one and two. How good are you at identifying your most potentially profitable customers, and making yourself indispensable to them?
Realizing that (a) delays in Vista have dampened revenues, (b) customers probably won’t widely adopt Vista for business use until at least Service Pack 1 (or maybe SP 2), and (c) there was increasingly large potential for mass attrition among some trailing-edge customers from the Microsoft brand to one of those free operating systems that run well on legacy hardware if they didn’t do something, Microsoft has extended its Custom Support Agreement program to provide for at continued support of Windows NT (paid) support for large customers. The same is true of Exchange Server 5.5, and Windows XP Service Pack 1, which were both due to be dropped from support shortly.
The long life of Windows NT in some particularly conservative markets has certainly surprised (and probably distressed) Microsoft, which attempted to pull all life support for NT a few years ago but extended the lifecycle of Windows NT due to popular outrage/demand in 2002. That extension was supposed to end at the conclusion of this year.
But now, laggards with applications that absolutely require Windows NT 4.0, XP SP1, and Exchange 5.5 will be able to pay for continued patches and technical support from Microsoft — at a sharply increased price, as support pricing is shifted to a per-device basis. As a result, the ROI calculators of many customers still stuck in the 90’s may become a little more upgrade-friendly. But Microsoft is “all about customer choice”…
On his Cisco Blog. Jeremy Cioara provides a blueprint for an inexpensive testbed network for practicing for the CCNA exam. Check it out, Cisco-ites; it’s a thing of beauty.
Ed Bott on ZDNet reports that Microsoft accidentally released pricing for Vista on its Canadian website. The pricing is also now visible (at least as I post this) on Amazon.com.
Microsoft had been rumored to be close to sending out Release Candidate 1 for Vista. This would seem to confirm that. Amazon is taking pre-orders now for delivery in January.
Based on the pricing shown ($300 for a Business license? $200 for an upgrade?), I don’t think mass early adoption will be much of a problem for the channel. On the contrary, Microsoft seems to have made pushing this puppy out to its installed base through the channel an extremely low priority by setting the bar so high…or maybe they need to charge more to make up for the revenue they lost from delays?
With Eduardo starting to puff its way toward Florida, Orlando-based Vlad Mazek, the CTO of managed infrastructure service provider Own Web Now Inc., has come up with a quick-and-dirty disaster recovery plan that can be executed in under an hour for $150. The key elements: a prepaid cell phone, a Skype Dialin voice mailbox, an analog phone (for the “ride-it-out warrior”, says Mazek), and a disaster blog for coordination of staff.
After my experience with a no-warning loss of all Internet connectivity a few years ago, I can add the following things to that list:
Although harmless at this stage, the viruses could be used to create malware that affects computers with disparate operating systems, according to Vincent Weafer, senior director at Symantec Security Response.
“If I can get to the processor level, potentially I can start tying myself into the core hardware,” he told vnunet.com.
While it’s intellectually interesting that someone has figured out how to execute arbitrary code independent of the operating system on Opteron, allegedly independent of the OS, any virus written to do so and actually go after elements of the hardware–like storage, or a network interface–would probably have to be tailored to specific system configurations. On the other hand, if an organization bought enough systems with a single common hardware configuration, that might create an opportunity for someone who really, really had some time on their hands and a desire to make life miserable for that select audience.
Of course, it doesn’t take a virus for that to happen. Any time you have a hardware/software monoculture, simple problems can become huge problems very quickly. Ask anyone who worked with Unisys’ whitebox systems built for the Air Force Desktop III contract, which initially shipped with a SUMO SCSI controller that turned out to be incompatible with Windows. The support hassles, I have been told, ended up costing Unisys more money per deployed system than they were paid for delivery of them.
Over on SearchWinIT.com, Mark Arnold explains the The downside to outsourcing Windows desktop and server management from the IT manager’s point of view. While it focuses on large-scale outsourcing, the problems are similar to what any organization will face when a service provider takes over management of a Windows environment — or at least the points of resistance that the service provider will encounter:
[A]ny problem with a server that you control will take significantly longer to resolve when you’re relying on an outside company to solve it. … Server and Active Directory permissions are almost always changed. Settings … are set in a way that only personnel in the data center or remote support center are able to control such things as drive configuration, Registry settings or patch levels. If you have an application problem, rest assured that the problem will come straight back to your lap, but you will have one hand tied behind your back while you are troubleshooting and resolving the problem.
All you Microsoft partners doing Outlook/Exchange/Microsoft IM installs in the midrange market or providing hosted Exchange services, take note: Google wants to eat your lunch.
The NY Times reports: “Taking aim at Microsoft, Google plans to offer a package of software for business users.”
The initial software bundle, called Google Apps for Your Domain, will provide e-mail (based on GMail), calendaring and instant messaging, as well as a Website development tool–for free. The bundle is obviously aimed at the same space as Microsoft’s Windows Live services.
Google plans to offer a paid version of the service later that will include technical support and other services. I’m betting those other services include Writely, the web-based word processor that Google recently acquired , and a Google spreadsheet application. I’m also betting that the services will eventually also be bundled with the Google Mini search appliance for an all-in-one solution for document and knowledge management.
Free is a hard price to beat, particularly at the price point Microsoft currently offers Exchange seats at. And with Microsoft looking to capture the same audience with its own software-as-a-service play (Windows Live), it’s going to get increasingly difficult to make any kind of money providing core software and services for SMB’s like messaging and basic knowledge worker applications. But that was true before Google got into the market — the safer ground is still customization and integration.
But if you can’t beat ’em, join ’em.
IDC claims Sun regained the #3 position in overall server market share this summer, with 12.9% of a weakening market, stepping over distressed Dell. IBM still leads the server space, and HP remains in second; but only Sun saw an increase in market share, and a bump in revenues as well.
The UltraSPARC platform is still Sun’s main money-maker…
“…but the growth in the company’s Opteron-based products are having a positive impact,” IDC enterprise server research director Steve Josselyn said.
Well, duh. Having a viable product to compete with Dell (with less heat issues) certainly should have a “positive impact.”
The NY Times reports that Lenovo has hired yet another exec from Dell–the fourth in 8 days.
Lenovo, the Chinese computer maker that bought I.B.M.’s personal computer business for $1.25 billion last year, has been trying to beef up its executive ranks and transform itself into a global computer giant in a fiercely competitive market.
The new hire is Christopher Askew, VP of Dell Services. Previous hires were David Schmook, a VP of marketing; David Miller, head of Dell China; and Sotaro Amano, director of Japanese home and business sales.
Considering Bill Amelio, the CEO of Lenovo, is a former Dell denizen as well, it leaves room to wonder if Lenovo is planning on stealing Dell’s business model as well by emphasizing direct sales at the expense of the channel. And the hiring of Askew indicates that Lenovo may be looking to be a lot more to large customers than just a laptop supplier.
Askew’s hire comes on the heels of news that Dell is taking over desktop support for Citigroup as part of an outsourced services deal, though it’s not clear that Askew was involved in that transaction. Neither Dell nor Citigroup have spoken publicly about the deal, which was revealed by an irate soon-to-be-ex-Citigroup technician with a blog.