Commentary: What's the larger impact of computer defects?

Dell's prompt announcement about problems with notebook batteries reflects a more proactive and upfront PR strategy now being employed in the increasingly competitive PC market.

3 min read

Dell Computer's recall of 27,000 batteries manufactured by Sanyo for both consumer and business notebook computers will not have a significant lasting impact on the computer maker's reputation or business. Nor will Dell's competitors gain any significant benefit from this relatively minor quality glitch.

If anything, this prompt announcement by Dell reflects the more proactive and upfront public relations strategy now being employed in the increasingly competitive PC market to minimize the impact of quality problems.

However, in the next few days

See news story:
Dell recalls notebook batteries suspected of fire hazard
or weeks, some notebook owners and corporate buyers will react to this news with concern about whether their notebook batteries might be defective, regardless of whether the Dell notebook models they use are covered by this announcement, or even if they purchased their notebooks from a Dell competitor.

This sensitivity over quality issues underlies a recent change in the tone of computer makers' marketing campaigns--a change that reflects the increasing maturation of the computing infrastructure market. Compatibility concerns and cross-economies from a multivendor perspective are beginning to dominate buying and selling, instead of the technological advantages of any single vendor vs. the others.

People understand that PC manufacturers often purchase parts from the same supplier, or from different suppliers using similar processes. Therefore, when any single manufacturer announces a quality problem, it immediately calls into question the quality and reliability of a larger set of products and vendors than is covered by the specific announcement.

When Dell makes an announcement like this one, it immediately makes people ask the question, "Where did Dell buy those batteries? Does that mean that IBM and Gateway notebooks will have the same problem?" In this way, fear and uncertainty about one vendor's products immediately spread to the products of that vendor's competitors.

In recent years, this emerging perception by customers has resulted in a gradual but definite change in marketing messages for PCs and other infrastructure products. The traditional way for computer vendors to differentiate themselves was to position their products as superior in some way to the competition--in terms of quality, speed, performance or technical support.

However, as information technology infrastructure has become an increasingly prevalent part of everyday life and the workplace (and as customers perceive their increasing dependence on this infrastructure), raising doubts about the dependability or effectiveness of any part of that infrastructure--including computers supplied by other vendors--is becoming a disturbing and counterproductive message rather than an effective incentive for customers to buy.

It's clear that the total fabric of computing infrastructure has become interconnected, and when a manufacturer slams the competition, it is implicitly calling into question the entire infrastructure, thereby increasing uncertainty even about its own products, and contributing to reluctance to buy and lengthening sales cycles.

In our conversations with end-user organizations, we have learned that they dislike nothing more than having a big-time vendor swagger into the organization and tell them that the technology sky is falling and that everything in the infrastructure has to suddenly change over to something newer and better.

The result is that in some instances computer vendors have adjusted their marketing messages to be less critical (explicitly and implicitly) of competing products. Especially for the corporate marketplace, we believe vendors will increasingly position their products as effective components of the total infrastructure environment, rather than as a superior single-vendor offering that far outstrips the value of competing infrastructure components.

Although quality problems affecting the products of any single PC manufacturer may provide short-term sales benefits for competitors, such events may also call an increased hesitance to buy the products of all vendors. Therefore, computer vendors should react to product recalls by the competition not only with opportunistic sales efforts, but also with reassurance about the presence of analogous defects in their own products.

People should bear in mind that occasional quality defects will always occur, and avoid overreacting to any single recall announcement such as Dell's current problem with notebook batteries.

META Group analysts Peter Burris, Jack Gold, and William Zachmann contributed to this article.

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