Research firm Gartner has warned potential Dell customers to beware of the PC giant's "thorny" contracts in a scathing report.
The report describes a long-term PC purchase contract as being a bit like a marriage. "Once the 'honeymoon period' is over, both partners can discover annoying habits they hadn't noticed in the beginning."
Gartner said that long-term agreements with Dell may provide the benefit of aggressively priced mainstream hardware but warns that buyers quickly discover that, as the company brings new technology to the market, "the attractive upfront pricing may erode, and the hardware configurations they initially selected are no longer available."
"Closer inspection of Dell's contracts reveals that Dell has reserved the right to change the service offerings with each new order," it added.
The report said Dell's contracts are "particularly challenging" because its business model is based partially on "world-class execution - just-in-time, build-to-order manufacturing and configuration and rapid inventory turns."
This type of model accommodates the latest product and component changes, said Gartner. As a result, Dell's ability to guarantee product availability and identical PC components for the duration of the agreement is limited and generally less than the other PC manufacturers such as IBM, Compaq and HP.
Gartner also warned that companies may not receive the products they order, as Dell's contract stipulates that the products shipped to the customer may "display minor differences from the products the customer ordered."
The research firm reported that many of its clients found that although the differences may have been minor to Dell, it forced them to re-image their systems multiple times within a one-year period.
"It is critical for enterprises and small and mid-size buyers to understand what they will and will not get in a long-term relationship with Dell if they sign the standard contract," the report said.
"Never sign a vendor's standard contract without reviewing and negotiating for critical points, and be willing to walk away from the deal if a mutual agreement can't be reached."
Dell UK marketing director Nick Eades said: "This report says many, many things and it makes five key recommendations. Dell meets or exceeds all the five points in this report.
"Fundamentally, we as a company don't disagree with the Gartner report but it highlights what customers should be aware of - we are different to other companies. But we've never had a policy of not negotiating and we welcome the opportunity for customers to talk about what they want in their contract."
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