Big Sky Network

I moved to Boise in 2000 to take a job as Director of IT for Micron PC in Nampa, Idaho.  The division I worked for closed a year later.  And for seven more years I watched the company struggle to keep its doors open.  Last week the company announced it was filing for bankruptcy. 

The configure-to-order direct to consumer model seemed to be a promising way to make a profit in an industry which relied on expensive components with an incredibly short shelf life.   But it wasn’t to be. The PC industry experienced the worst slump in history in 2000.   In 2000, the same year as direct model PC manufacturer Gateway was doctoring its books to live up to Wall Street’s expectations,  MicronPC became distracted with the retail model which required it to invest heavily in IT, stock up its inventory and be ready to ship thousands of PC’s to the big box stores.  It couldn’t compete with the bigger PC manufacturers and the resulting financial losses forced it to abandon this new venture.  MPC’s CEO at the time, Joel J. Kocher, always a proponent of “out of the box” thinking,  diverted the company vision to web hosting, sold the PC division to Gores Technology Group, and hightailed it to Atlanta to run Interland, Inc.  He stepped down as CEO of Interland when the company was forced into major restructuring in 2005.  

Dell, in the meantime was focused on expanding marketshare and engaged in a price war in 2000 which boosted it to the number one PC manufacturer slot in 2001.    It expanded its product offerings to servers, printers, LCD’s and accessories and forged ahead into world markets.  

The top five PC manufacturers currently hold 54% of the PC market.  So who will emerge from this economy, and who will be left behind?  HP and Dell appear to be in the best position to ride out the recession, a big factor being the fact that both receive a large portion of income from overseas.