In an unusual step, Bob Enderle, senior analyst at Boston based Giga Group, has issued a vendor watch on Dell following the vendor's alleged failure to attend to new customer delivery and configuration problems.
In a damning report - which Dell has denied outright is accurate - Enderle said that while long term customers are being treated on a par with service levels in the PC industry, new Dell accounts, "Particularly those that have reported activity during the last three months, have reported configuration, support and relationship problems with the firm."
Enderle was quick to stress these do not reflect a broader quality problem, but said it, "does reflect a risk for accounts that are choosing to move to Dell from another vendor - a move that we believe is unreasonable."
Dell prides itself on its efficient operations that allow it to maintain very low stocks, but is apparently running into serious shipment delays with new customers and this has led to it being unable to fulfil some orders effectively.
While this is not an uncommon problem, Enderle described Dell's attitude as, "an arrogant disregard for the customer and questionable business practices" and accused the PC giant of compounding the problems through a series of management cover-ups.
Brian McBride, Dell's general manager UK and Ireland fundamentally disagreed with Enderle's comments: "I just don't recognise the problems he's referring to. In the last three months, if anything I've seen an improvement - you can be sure we'll be following up with this guy."
In the report, Enderle added that failing to solve problems and then covering them over was not unusual in fast growing organisations and cited Netscape, Apple, 3Com, IBM and Microsoft as similar past miscreants. But in those cases, Enderle said that once senior management attention was brought to the problem, they have acted.
"Regardless of the cause, this behaviour represents an unacceptable risk for companies, particularly large companies looking for Dell as a replacement for an existing vendor, largely because it can embarrass the decision maker and put them at significant career risk," he said.
Although Enderle said the problems seemed highly concentrated in Texas, there has been a wide spread of reported problems, including Europe.
Dell's McBride countered that he sees all complaints and has not lost a single customer through service issues.
"If these problems were real, we wouldn't be able to attract customers like Barclays Bank," he said. Barclays recently handed over its entire desktop infrastructure and services responsibility to Dell in a £50 million deal. (see Newswire 15 September)
Even so, McBride acknowledged that there are always problems, but claimed: "Less than 20 issues have arisen this year where I've had to get involved."
By contrast, Enderle praised IBM, which it said has been quick to fill the gap and is said to be executing well on the direct selling model Dell originally pioneered. With Compaq quality getting better, Enderle suggested that existing Compaq customers might wish to sit tight.
This is only the second time Enderle has issued a vendor watch. The last time was in respect of Compaq in 1997 following repeated problems with notebooks. Gartner Group also slammed Compaq at the time for quality problems. Both companies lifted their watch earlier this year.
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