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Dell to offer computer service via the Net

Among the announcements at the DirectConnect show, the PC maker will provide details on a plan to provide greater customer service and support via the Internet.

Microsoft chairman Bill Gates and other luminaries will converge on Austin, Texas, during the next two days to hear Dell Computer flesh out its product and customer-support strategies at its DirectConnect conference.

Among the announcements at the event, Kevin Rollins, vice chairman at Dell, will provide details on an initiative to provide greater customer service and support via the Internet, according to sources at Dell and others. Under the new service, the PC maker, in partnership with Motive Communications, will be able to monitor and service Dell's servers and eventually PCs over the Net.

DirectConnect is a company-sponsored event dedicated to all things Dell. Chairman Michael Dell will kick off the conference with a keynote speech on his vision for the future of the Internet. Other speakers will include Gates, Cisco chief executive John Chambers, and Intel CEO Craig Barrett.

The online service plan specifically--and Dell's overall expansion of its Internet offerings in general--reflect a broader trend among PC makers to not only use the Net to save money on areas like customer service but also to offset losses in other areas, like hardware sales. Dell and companies such as Gateway, which already configure and sell their products online, are well situated to move into these types of services, observers say.

Gateway, for its part, has achieved some measure of success in recent months by expanding its e-commerce and Internet service offerings, while Dell has beefed up its Internet strategy by offering online auctions and customized content through its DellZone portal and Internet service. Dell is expected to further expand its service offerings in the future, sources have said.

Dell is using Motive's technology to offer its PowerEdge server customers the ability to diagnose and repair their systems, sources said, with the target of reducing the number of support calls to Dell by half. The offering is expected to eventually reduce both Dell and its customers' support costs.

Based in Austin, Motive specializes in creating customized Internet support sites that provide automated or assisted customer advice and guidance, as well as software that allows companies to offer customer service remotely through Internet messaging and other remote tools. Motive customers include Microsoft, PeopleSoft, Intuit, and Merill Lynch, according to Motive's Web site.

Dubbed the Dell Resolution Assistant, the new software will be accessible from an icon on the desktop. It will allow users to isolate the area of the system affected and communicate with a Dell service representative via the Internet to fix the problem. Dell is expected to demonstrate the technology at the event, sources said.

Although initially only expected to be available on Dell's PowerEdge servers for small and medium-sized businesses, the technology can be implemented on desktop and notebook computers as well, eventually, sources familiar with the announcement said.

Quality of service has increasingly become a major competitive differentiator for computer companies, especially when selling to small and medium-sized businesses, because they ordinarily do not have independent information technology departments.

Beefing up its online support capabilities fits in with Dell's overall strategy and history. Unlike HP, IBM, and now Compaq, Dell does not have an established services and support division. The bulk of Dell's support obligations are handled by Unisys and Wang. Employees from these companies provide the actual service, while Dell receives a cut of any incremental revenue, Dell executives have said.

The company has in the past said it does not have plans to build up a service unit staffed with thousands of technicians like its competitors. However, Dell is enamored with the Internet and has been using it as a vehicle to tie its customer base closer to the company.

Yesterday, in an unusual move, Dell said it will integrate its OpenManage management software with HP's OpenView ManageX for use on PowerEdge servers. Management software is often a distinguishing selling point for PC server manufacturers, which believe the tools will attract IT mangers looking to simply system administration.

The partnership may be viewed as a concession on the part of Dell. Compaq believes so strongly in its Insight Manager as a value add, it recently organized a whirlwind media tour to promote it.

At the conference, Dell will also cut prices on Pentium III computers, added other sources.

News.com's Joe Wilcox contributed to this report.