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Tuesday, January 10, 2006

PC Sale Model Not Aligned For Personal Buying

Walt Mossberg brings forth the point that the PC industry operates on a false model of the U.S. computer-using population. It imagines the world is divided between "consumers," who lie around at home playing games and listening to music, with the occasional homework assignment or tax form thrown in; and "enterprises," large corporations where computing is controlled by IT departments and only mission-critical tasks are performed. If these models acknowledge small businesses at all, they get lumped into a category called SMB, for small and medium businesses, where the minimum size is something like 500 employees and an IT staff rules.
In fact, the most accurate way to divide the computer-using world is into two segments: the one controlled by an IT department and the one controlled by the people who actually use the computers, be they consumers or small-business folks. A vast amount of business crucial to the U.S. economy is conducted every day in the non-IT part of the computing world. The computer industry loves, and caters to, the IT segment because it buys machines in large quantities and is run by a geeky priesthood that speaks the industry language. By contrast, the non-IT camp, even though it is larger in the aggregate, buys one, two or three machines at a time and tends to be nontechnical.
If the industry favors selling only to IT departments and developers - this is in part because an engineering/IT-driven organization, as many tech companies are. Volume driven models encourage a few large enterprise deals can be a lot easier for a small software company to manage than a couple bucks from each of thousands of consumer customers. Microsoft software & cellphone carriers also have working models favoring big corporate buyers. This is where Apple scores. No doubt, the world would be better off if the biggest computer companies started catering more to the non-IT part of the market, where significant number of computers live.

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