Dell Inc. reached for a larger share of the small business market Tuesday, launching the "Vostro" brand of notebook and desktop PCs designed to simplify tech support, an area that has attracted complaints and lawsuits for Dell in recent months.

To make Vostro PCs easier to use, Dell will ship them without any "trialware," Dell's term for the unwanted software applications that many PC manufacturers load on new computers in the factory, in exchange for payments from the software vendors. In June, Dell agreed to let customers opt out of those programs, after customers complained about that "bloatware" on a company blog.

In another step intended to make Vostro PCs easier to use, Dell streamlined the set-up process. A customer without any IT experience can get a Vostro PC up and running in six minutes, and can connect it to the company network in only six steps, CEO Michael Dell said at a press conference in New York.

And to make tech support easier for companies with fewer than 25 employees, Dell will offer support services such as dedicating 6,500 of its customer service workers to Vostro products, offering 24-hour access to online tech support and 10G bytes of online data storage for a year.

The new computers include the Vostro 200 desktop, with Intel Corp. Core 2 Duo processors and a choice between Microsoft Corp.'s Windows XP or Vista operating systems. Vostro notebooks include the Vostro 1000, with dual-core AMD chips, and Vostro 1400, 1500 and 1700, offering screen sizes of 14.1 inches, 15.4 inches or 17 inches, respectively. Dell is selling the models starting at US$449 for the notebooks and starting at $319 for the desktop.

The company also plans to add a high-performance desktop model to the family in late August.

Although Dell has lost much of its market share to Hewlett-Packard Co. in recent quarters, the company is playing to its strength by focusing on small business users, said one analyst who attended the press conference.

"They still have a lot of brand equity in the small business market and they're extending that with this offer," said Merle Sandler, senior research analyst at IDC. "With the services they become a trusted advisor and hopefully down the road they can turn that into a revenue stream."

Michael Dell acknowledged that point in remarks to reporters, saying: "Small business is a rapidly growing market. It's also a place where there is enormous demand and need for technology." At the same time, he said, "Our customers all tell us, 'Make it simple'."

Still, the company faces a challenge in repairing its reputation relative to customer service. In May, New York state's attorney general filed a lawsuit charging that Dell had used fraud and false advertising to increase profits on PC sales, applying high credit rates to computer purchases despite a promise of cheap financing.

Indeed, Michael Dell stumbled over several of the questions posed by a crowd of small business owners at the press conference. He smiled at one user's story about experiencing Dell customer service problems after experimenting with competing PCs from Sony and Toshiba, and he winced at another customer's plea for Dell to keep offering Windows XP because of the "horror stories" she had heard about Vista.

He also grew defensive after a customer asked whether Dell would offer a hundred-dollar laptop such as the XO computer designed for developing countries by a team at the Massachusetts Institute of Technology (MIT) led by Nicholas Negroponte. Dell pointed out that MIT had recently raised its price to $170, and that a better way to get cheap PCs in the hands of schoolchildren would be to re-use the 125 million PCs discarded each year by users in western nations.

"We've sold more PCs in the U.S. than anyone else ... but that doesn't mean we're going to walk away from our responsibility. Our team has made big investments not only on the product side but in service and support," Dell said.

» posted by ITworld staff

IDG News Service

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