THE INDUSTRY STANDARD MAGAZINE
Subscribing to Your Computer
Oct 19 1999 12:00 AM PDT
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Micron Electronics (MUEI) is struggling to sell PCs over the Web on razor-thin margins, as it competes with the likes of Dell (DELL) and Gateway. Tired of the struggle, Micron has decided to move the playing field. The company will introduce all-in-one subscription plans in which small businesses can get PCs, a LAN firewall, Web hosting, e-commerce development services and support - all for a fixed monthly price.
Nice idea, but can it make money? The Wall Street Journal and Reuters covered Micron's announcement of its intent to invest $210 million to launch the new business model. The Journal's Dean Takahashi noted that Micron has been acquiring companies over the last year to position itself for the subscription business. The Journal not only priced a representative package - five PCs, a server, e-commerce software and a Web presence for $550 a month - but also analyzed some of the impediments to making money with the new model. Takahashi quoted Micron CEO Joel Kocher on why the company had to take the leap: "I think it is doubtful that anyone will make money on hardware sales alone in the future." The unbylined Reuters coverage didn't get into details of pricing - but it did identify some of the acquisitions: HostPro for Web hosting, and Micron Internet Services for dial-up access and e-commerce development. Neither report looked beyond Micron Electronics at what other PC makers are doing to broaden their offerings. CNET (CNET)'s Stephanie Miles reported on Gateway, with a nod to Dell. While these established PC makers aren't going whole hog with bundled subscriptions, they are beginning to offer services such as online support, network configuration and remote software installation.
Micron to Invest $210 Million in 'Subscription Computing'
Micron Electronics Shifts Sales Strategy to Monthly Computer Subscription Fees |