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January 5, 2007


Main Entry: co·nun·drum
Pronunciation: k&-'n&n-dr&m
Function: noun
Etymology: origin unknown
1 : a riddle whose answer is or involves a pun
2 a : a question or problem having only a conjectural answer b : an intricate and difficult problem

As found in Miriam-Webster’s Online

 For my purposes today, I’m going to favor definition number 2 and reflect on Computers, Personal Computers, and the situation that consumers and manufacturers may find themselves in today.

 In the late 1960’s IBM introduced the system 360 which really ushered in the age of generalized computing.  Through the 70’s computers evolved in much the way they do today, they became more powerful, more compact, and slowly more user friendly.  To be sure, those 70’s model’s systems from DataGeneral, Digital, IBM, Sperry-Rand, and numerous others were still rack mounted chunks of wire wrapped wonderment, that could only be operated by specially trained individual.   Not everyone had a terminal on their desk.   The IT department was probably called “Data Processing”.  When a system broke down, the expectation was that it would be down for hours, perhaps a couple days, and would be serviced by factory engineers who traveled to the customer site, or if the account were large enough, had a permanent station there.   Labor costs for repair, portal to portal were upwards of $100 per hour, and were paid as part of a maintenance agreement, or built into the lease,  as many systems weren’t owned outright.

Along came the age of  personal computer, which ushered in personal freedom and productivity available on everyone’s desk for perhaps several thousand dollars.  Throughout the 80’s,  personal computers grew in power, and the mystique of the computer was slowly eroded.  Much effort was placed on standardizing, and modularizing designs, such that the machines could not only be operated, but serviced by their owners.   The age of computer dealerships rose and fell with the 80’s, and as efforts to make computers less expensive, friendlier, and generally more usable with less specialized knowledge, the way in which computers were purchased changed.   Purchase routes quickly evolved from face to face manufacturer reps, to factory storefronts and authorized dealerships, to big box stores like CompUsa, Best Buy, Circuit City,  to newstand mail-order like “Computer Shopper”, and finally to Telesales and Web based virtual storefronts.

Computers were simplified and mass marketed in order to drive penetration into every home, business, school, corner coffee shop.   As PC’s have been de-mystified, and commoditized, the prices have declined.  A top of the line laptop in 1995 cost $8,000.  Today, fully loaded, perhaps $2,000.   Desktops have gone from $3,000 in the days of the PC/AT to $299 with mail in rebate at your local electronics store.  

A problem is that the simplification and “fool-proofness” of computers has  not kept pace with the reduction in component pricing, nor with customer expectations.   In the days of an $8,000 PC, the cost to engage a customer in terms of labor dollars was quite minimal as a percentage of the cost of the machine.  In today’s market, virtually any customer contact after the sale consumes the profit associated with the system.   Today’s computer companies literally cannot afford to provide the same level of personalized service that they were able to 10 years ago.   Certainly, every effort is made to provide  quality technical service at the lowest possible cost per event.   Human technical support is outsourced, often off shored to places in the world where labor costs are still low.   Interactions are routed through the web, automated phone systems, or other “self help” venues wherever possible.     Consumer expectations haven’t followed along this curve. 

So, the Conundrum.   Ongoing, industry driven supply side pressures to sell the highest technology at the lowest possible cost point on one side, met by Consumer expectation that no matter the price point, or relative value, that each and every product be made to work in their respective environments, and to their satisfaction.   

How does this industry alter course before a meltdown occurs?   How is equalibrium re-established?  

One Comment leave one →
  1. January 31, 2007 1:26 am

    I’m not sure, but I have a feeling a lot of us tech’s and system engineers are in for even rougher times unfortunately. Give mankind anything, they will surely find a way to exploit it to the point of it’s death, it’s sad but true.


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