What Price Rankings?

July 2001 – This week, Apple will undoubtedly make several announcements at the Macworld Expo in New York. Among these will be some product revision announcements, Mac vs. PC benchmarking demonstrations, and sales figures showing how Apple has regained the lead position in educational sales. What won’t be announced are some of the unfortunate tactics Apple has used to get to this position in the education market.

For those of you who are not budget-savvy, in any large organization there are two calendars. The calendar year is the same as the one you hang on the wall. The fiscal year is the date that all accounts are reconciled, the checkbook balanced, and budgets for the forthcoming year finalized. The end of the fiscal year is an important time, because that is when annual profits are calculated, expenses for the next year are estimated, and the overall health of a company is evaluated.

The budget year is divided into 3-month quarters, and at the end of each quarter a financial statement of the company’s performance to date is computed. The end of the year (4th quarter) calculations are the most important, and it’s probably not a coincidence that the Macworld conferences are scheduled following the end of the quarter.

This year Apple had considerable motivation to improve its standing in the education market before the end of its fiscal year – they needed to refute Dell’s claim that Apple has become irrelevant, its stockholders should be paid off, and Apple’s employees sent home permanently.

Last year, as you may recall, Apple dumped its contracted sales force that had served as liaison between Apple and the school district technology purchasers who were responsible for buying, installing, and maintaining Apple equipment. New people were appointed who were internal (and inexperienced) Apple employees. No less than Steve Jobs admits that the move was at best poorly timed.

In many districts, the committees formed by the schools and districts were stocked with technology teachers, parents, community members, and others who looked to the district technology staff for guidance – and were told that Apple would not be a part of the equation. Just this past weekend, I spoke to two glum science teachers who said they were inheriting the Macs discarded by other parts of the district, because all high school purchases would be PC only, no matter what, no discussion allowed. “There’s no consideration for the fact that I think the Mac’s the best tool for the job,” said one. “Now I have a Dell Doorstop, which the tech department really likes,” said another. “I don’t want it, and I won’t use it unless forced to.”

In other California districts this year, the district made a deal with Apple for the purchase of hundreds of Apple computers. And in others, such as the one I am going to tell you about, passionate arguments among the Digital High School committee members led to the purchase of some PC computers and some Apple computers – nearly a 50/50 split.

In this district, contracts were signed with Apple and with Dell to provide several hundred computers on site with installation services.

Most of us never buy more than one computer at a time, but large corporations and districts must sometimes ask the computer vendors to prepare the computers with configurations and software preinstalled in custom arrangements. The district and vendor work together to prepare a master disk that is used to set up the machines prior to shipment from the factory. When the machines arrive, techs from the vendor install the computers, boot them up to make sure they are working, and the district techs make sure they has the right IP address, security settings, and so forth.

At least they do when the vendor does its job correctly.

In this particular case, Apple didn’t.

According to the district’s technology director, who has asked that the district’s name not be used, Apple was contracted through its iServices program to burn the district CD (using only legally licensed software, of course) onto hundreds of new iMacs, deliver them in a staggered schedule to multiple school sites, uncrate the computers, remove the trash, and assist as necessary to get the machines up and running for school this fall.

That isn’t what happened.

The tech director, who is admittedly not a fan of Apple Computer or Apple computers (to put it mildly), was in a meeting with his tech staff discussing the scheduling of work for the individual schools, coordinating summertime vacations, arranging for IP addresses to be made available, planning the inventory of equipment coming in to the district, when a phone call came in, interrupting the meeting.

“There’s a semi here with 200 iMacs,” the person on the line said. “There’s no one here to unload them. What do you want to do?”

With no other choice, the tech director canceled the meeting (irrelevant now) and sent his entire staff to the school to unload and inventory computers.

And to add insult to injury, Apple also did the following things wrong:

  • A sizable chunk of the machines had the wrong disk copied onto the drive, technically making the district have illegal, unlicensed software. Now each machine will have to be configured by hand using an already understaffed department.
  • Because of the hurried unloading and inventory, the district is still not quite sure every machine was placed where it was supposed to be. Inventory control efforts are still ongoing.
  • The machine’s delivery dates were not scheduled to be on one day; the agreement was to stagger them over three days. Three days is the maximum time to which Apple would agree (unlike Dell, which had no such limitation). The staff from Apple computer was not on hand to assist with the delivery of the machines. The dumpsters included in Apple’s iServices fees were not in place.

Most significantly, because Apple’s iServices are normally $80 (per machine) and Dells’ are $15, the district had every right to expect world-class service getting those Macs into classrooms and having them up and running correctly. The district did successfully negotiate a lower price per machine with Apple, but they didn’t get what they bargained for. Instead, they got a screw-up of titanic proportions. (It is true that Apple’s iServices include some services not covered by Dell, such as waste disposal, but the difference in service is not worth the difference in price, according to the district.)

And the tech director is disappointed. “If any other vendor sold Macs – any other vendor,” he said, “I’d cancel the contract and go with them.”

The Mac-friendly assistant who worked directly with the sales rep for Apple had no kind words either. “It was the worst vendor experience I’ve ever had,” she said. “I sure hope Dell doesn’t have a big problem like this,” she continued. “It would completely ruin my summer.” She has deleted the iServices fee payment from the invoice before authorizing payment for the computers.

Both the tech director and the assistant have been unsatisfied with Apple’s response to the problem. “We got a little apology card,” said the director. “Somehow, it just doesn’t do the job for me.” The assistant chimed in, “I think the entire staff here should get a Titanium [PowerBook G4] each for the hassle we’ve been through these past two weeks,” she said, half-jokingly. The sales rep offered some other things, such as free training, but the district refused. “I’m not inclined to value anything Apple has to offer,” he said. “Apple is just riding on its laurels from the past and has nothing compelling for me compared to PCs,” he continued.

Why not name names, I asked. “The sales rep seems like he’s been overwhelmed with work all of a sudden,” said the tech director. “It may not be his fault.” It’s the opinion of the staff at this district that Apple, desperate to increase the bottom line and close as many purchases as possible prior to the end of the quarter, pressured its sales staff to complete deliveries no matter what before June 30.

Mac advocates like to point out that Apple is the only vendor responsible for the entire experience. That also means that Apple needs to be responsible for the entire experience, not just the nice display for individual users in the Apple Store. Here we have a case of a technology director, practically dragged kicking and screaming to the Apple camp, only to be handed a giant I-Told-You-So on a silver platter.

This is the audience Apple needs to win over – the tech staff that, despite their training and better judgment (as they see it), responds professionally to the demands of their committees, teachers, and staff, and goes ahead with a cross-platform implementation.

As it stands, it will be a long time and a hard road before Apple makes a significant sale in this district again. This is despite the fact that this district has a lab of iMacs right next to the director’s office and several vocal Mac advocates – all of whom are angry and disappointed. Apple needs to make this right, and they need to do it immediately. They cannot afford the ill will that will spread from this district to others with whom they come in contact.

Keywords: #appleiservices

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