by theologic | 2025-09-15 03:56:31+00:00
The value prop is that we could launch a Dell (Gateway) channel by offering leading edge systems, and look for unique features, and live in the other guys holes. The team wasn't stupid, and they had a matrix of where they felt that they could put some products into the ecosystem that could occupy some space that Dell (Gateway) didn't have clear products. If I remember correctly, there was also some thought that we could cut off Dell in EMEA. (Europe.) Dell was far stronger in the USA at the time.

Being this is 30 years ago, I can't remember an exact matrix on some that wasn't my core product. But they had a strategy.

This was early in my career, but I happened to be in a pivotable position that got me access above my pay grade. (I have this weird background in both marketing and engineering, and as somebody that can speak both, I turned into basically a language translator in many meetings, then I was sent out as PR person to the magazines.) I did not work for the Ambra team, but they had an impact on my work, so I got to be involved a enough to see the edges.

I'm not going to have the exact numbers, but I remember that we stated that we were going to have no more than 8 IBMers involved with the thing. The Taiwanese clone market was just starting to take off, and we were starting to outsource to Taiwan. If I remember correctly, it was the Phoenix BIOS, who we had already done a deal with for our Consumer PC line. (Actually, it was co-development.)

As I already wrote, the final bit is that the guys had done some anonymous bid work, and had gotten some very aggressive bids--better than what we were getting. So, they had the impression that they could take a lot of cost out of the system. Also, we wanted to take out Dell and Gateway, but not impact the core IBM brand. Compaq was considered the real comp. HP second. Dell was this annoying "can't stop them because they always win the bids" company. Gateway was on the fringe, and more of a threat to our consumer brand, which was small at the time. But it was free TAM.

So, there was an impression if we followed the Dell/Gateway model, leading tech, very competitive pricing, and full page ads, with some systems that lived in the space, we could start to cannibalize the their TAM.

Now, you don't want to read back into history. The Dell then is not the Dell of now. But, buying behavior was stronger with Dell than the group anticipated. It just was tough to get the velocity growth they wanted. I think we launched in EMEA first, maybe because that is where the VP that ran the thing was from, and then it was rolled out in the USA. However, it just did not see the growth, and I remember there were some quality issues that the small group couldn't handle, but this is pretty foggy.

I will also state that the Round Rock team (and even Gateway), was incredibly tough competition in this arena. I would say that the team did not appreciate this.

However, it was never a massive corporate push for RTP--the home of the PC and PC Server. It was a "let's try this and see if we can learn something." I do remember most of us in the core PC team to NOT get involved as it wasn't pitched as being our core business. If I remember correctly, we did help share some information on parts that we procured to help them.

Its not Costco as the models are so different. As I have run a distribution business before, and Costco is really a marvel to me. My disti business was to the VAR channel, but my sister group used Costco and Walmart. Costco is absolute maniac about delivering value to their customers with quality. Really, it blows me away. They had a bunch of brands, and Sinegal said they could combine them all under Kirkland, turn it into a quality brand to drag up the entire Costco brand. He is so freaking brilliant, and I would argue unique to a company that had a distribution business that wanted to position themselves in the consumer's mind. I would argue that Costco never used their branding to indicate a "secret way" to get a better brand. I think that Costco is keen on making sure that Kirkland IS the brand, which is different than Ambra.

Thanks for asking. I don't think we ever did this type of post mortem at the time, and thinking through events always seems to generate learning for myself as I type it down.