Copacetic

This made me cry laughing.

At the FOWA Demo Bar Conor O’Neil and I were exchanging notes on getting funding out of Enterprise Ireland. We are in the process of completing the R&D Equity grant process with Enterprise Ireland so here is our story.

This information related specific to our application (which is for a R&D grant associated with a software company) your mileage may vary in other sectors. The process is not adversarial and the EI staff are on your side. They (by and large) want you to get the money.

You should also be aware that EI offer a host of other incentives to businesses and I encourage your to trawl the EI web site with your sector in mind.

Do EI know you exist?

The first step in this whole process is to get on the EI radar. You have two goals 1) achieve HPSU status and 2) Get a Development advisor assigned. HPSU = High Potential Startup. A HPSU is a a company likely to generate employment or exports in the near term (next 3 years). The best way to get this (in Dublin at least) is to join an EI endorsed incubator program there are several to choose from, we participated in the HotHouse Program based a East Wall.

On the HotHouse program each batch of ten companies was a assigned a group DA. The DA (DA=Development Advisor) is your mentor and guide and you next job is to get your own personal company DA assigned. This will happen when you start to make overtures regarding any one of several grant schemes that EI operates.

The first grant available to us was CORD (commercialization of Research and Development). This is strictly speaking designed for commercialization of university research but we got this pretty much because we were participants on the HotHouse program. You have to submit a two page business plan and some three year financial projections, but as long as you meet HPSU criteria (Exports and Employment) and sound reasonably credible you are in the gang (I think 8 out of 10 in our program got the CORD grant).

A CORD grant will net you up to 31k euro tax free, but you must be an Irish national and must have paid at least that much in tax in the previous year i.e. this is essentially a refund of your tax. They will go further back, but it gets tricky. Word to the wise, this is where that note on the top of your P60 that says “this is a valuable document” comes home to roost.

As I was investing in my own startup I started to engage with EI directly towards the end of the HotHouse program (around Sept 2006). At this point EI assigned me my own Development Advisor. Bingo, now I was in game.

What’s Available to early stage startups?

So once you have a DA there is a bunch of grants available. Now there is some subtlety here that often eludes people. EI loosely allocates around 65k in startup funding to each HPSU. This can be drawn down as,

• CORD
• Feasibility Studies
• Market Research
• Strategic Consultancy
• A host of others with more specific markets in mind

However, they will not “double fund” an initiative. So for instance while I was drawing down CORD I couldn’t apply for feasibility or any of the other grants.

We did use a strategic consultancy grant to get our final application into shape, but the key thing to remember for most of these grants is that they are nearly all (with the exception or CORD) offered on a “spend it to get it” basis. So if you are a penniless startup they are about as much use as a chocolate teapot.

To really crack open EI’s coffers you need to apply for R&D and/or Key Hire funding. These are often bundled together (as was the case with us) into a single grant application.

Applying for the big money

EI will help fund the growth of your business if you can demonstrate the ability to raise matching funds yourself. This typical grant for software startups like PutPlace is offered as a 50% 35% subsidy on your total R&D spend over a period ranging from one to three years. EI expect you to demonstrate the ability to hold up your end of the project for its duration, typically by demonstrating you have cash in the bank to cover the costs of the project over its duration (along with the EI cash). So the first you have to do is raise (or plan to raise) a pile of cash. The Business Expansion Scheme has been used by ourselves and several other companies to give angel and early stage investors an opportunity to to get a 40% rebate on their investment.

Its important to note that EI will not value your company for you. So, in the absence of a third party setting your valuation (e.g. a VC) EI will invest using a financial instrument known as a Cumulative Participating Preference Shares. These are shares that convert to ordinary shares at a discount to the final price set by a third party investor (typically at the next round of investment).

The first step in the process is to fill out a R&D application form. This gives an overview of the project and is the base document that will form a launch pad for a host of other submissions. Don’t be obsessive about getting your EI submission documents perfect, its much better to get something in early as they can all be revised right up to final committee stage. You champion and the person who will eventually pitch your idea to the funding committee is your DA so its important to keep them informed and onside. (We didn’t do a great job of this at the start, but we got better as time went on).

The R&D application will typically be followed by a meeting to discuss the project and if you and the DA are happy with the application at that point you can proceed to the next stage. Your DA may also propose a feasibility study to analyse any gaps perceived in the initial R&D application. EI will often grant fund this study.

They key things to outline in the R&D application are,

• Novelty: What makes this different. new, unusual, deserving of R&D funding. You don’t want to pitch incremental improvements to an existing service.
• Difficulty: Does this initiative require significant effort to resolve serious technical problems?
• Cost: A detailed breakdown of the costs and associated headcount
• Benefits: What will the be the key benefits to accrue from completing this R&D (remember, employment and exports are what light EI’s fire)

Technical Assessment

If the DA likes your R&D application he will assign a technical assessor. The technical assessor is there to establish,

• Your technical credentials
• The actual novelty and or difficulties associated with the project
• Your ability to deliver
• The key challenges associated with the project
• A validation of the costs and headcount

The interview takes a few hours and will typically range all over the project.

Financial Assessment

After technical assessment you will need to produce a detailed financial data sheet that detailed your costs using an EI supplied template. This is essentially a rework on the initial costs submitted and needs to be aligned with a complete set of financials for the business typically out to three years in the future. The financial assessment is initially reviewed by your DA, but the final assessment is done by an assessor who is based inside the EI commercial evaluation unit. A key goal of this phase is to provide external assessment of the overall project viability and to minimize the effects of DAs who have gone native

The Committee

If you make it this far then your DA will prepare a presentation for review by the EI funding committee. The committee meets twice a month so you need to align yourself with one of those dates. You should meet with your DA and technical assessor a day or two before the presentation to do a final review so they are fully briefed. Make sure to keep them up to date with what is happening both with your business and in your sector (Twango got bought just before our presentation which helped price our proposition in the minds of the committee).

Its extremely rare for the committee to bounce a proposal (I’ve never heard of it), which is why so much preparation goes into the process. The answer will come on the day the committee meets, so stay on the phone.

The aftermath

If your successful (of course you were successful with all this help!) then you will need to amend your company articles and memorandum to reflect the new share holding and draw up a new share holders agreement to reflect the EI provisions for shareholding.

Other Points to Note

EI will never hold more than 10% of a companies issued stock so make sure you proposal represents 10% or less of the issued share capital.

EI often offers key hire grants along with R&D equity. They rolled our grants into our equity package but if you can keep them separate that would be peachy, ‘cos then their a straight cash grant and not equity.

They will not take a board seat, but the audit requirements over the lifetime of the project can be a bit burdensome. For instance you will need paper copies of signed time sheets for all time that is eligible for EI grant assistance.

Only full time PAYE employees are eligible for cover under the R&D scheme.

EI will only fund against future spending, you cannot get grant aid retrospectively.

I attended a seminar on how to raise venture capital yesterday. It was pretty useful because we had four real VCs in the room giving presentations, Brian Caulfield from TVC, John O’Sullivan from ACT, Shay Garvey from Delta and Micheal Donnelly from Growcorp.

My notes are below. Some of the key points that stayed with me were,

• Irish VCs are all locked into the same ten year cycle so they all raise and run out of cash at the same time. They were all cashed out last year so it was a really bad year to try and raise VC in ireland.
• VC’s regularily break their own investment rules, so its always worth meeting them even if your idea is not something that looks like it fits their current portfolio
• There is no point in emailing or colding calling, an introduction via a third party is much more likely to engage them
• Focus on building a great powerpoint presentation rather than a great business plan
• Irish VC’s will sign NDAs especially if you use the standard IVCA one.

The subheadding of the whole talk was "How to make your story investor intelligent".

Regina Breheny: DG IVCA

Venture Capital funds have a ten year life.

IRR is the key measure. Internal Rate of Return.

Only 16m in funds raised in 2006. How much in 2007?

Aldiscon spawned at least 14 startups (How many has Iona spawned?)

IVCA NDA is available on IVCA web site. Recognised by Law Society.

Irish VCs tend to be locked together in a similar ten year cycle.

EI 175m stalled investment in 2006.

Joe Tynan - Price Waterhouse Coopers

1 in 6,000,000 high-tech business ideas end up in an IPO

Less than 1% of business plans recieved by VC’s get funded

Founder CEO’s of high-tech companies typically own less than 4% of their companies after an IPO

60% of VC funded high-tech companies go bust

Most high tech companies that succeed in having a IPO take 5-7 years to do so

What point are you at in the VC’s ten cycle.

Plan to buy in management expertise.

BC : 1 minute pitch, value proposition and market opportunity

Shay: Proposition, Complication, Solution

John O’Sullivan - ACT Venture capital

VC’s continuously demonstrate exceptions

VC’s is not the only answer

VC’s are curious, positive and entrepreneurial

VC partners invest their own money in the deals

VC money is somebody’s pension fund

Risk: VC is here to reduce risk

Capital efficiency (How much will it take to exit?)

VC’s have to convince their colleagues

What do really want when you ask "What is your added value?"

What are you like to work with?

VC’s are always concerned when companies start taking their advice pre-investment

Financial’s -

• Focus on cash
• Gross margins after startup phase

When did you last meet the competition?

Competition : Anything that is an alternative for your customers.

One alternative is "do nothing"

Is the maximum valuation the optimum deal?

Asset strategy is the focus of many companies. They also need a liability strategy.

Michael Donnelly - Growcorp

Michael Donnelly - Growcorp

Deal Timings - 1m - 12 months, typically 3-6m

Does your investment preferences match the stage of the business

What is the sector track record

Is the fund compatible with your business

Does the investor have conflicts of interest

"Freedom to Operate" - Limits liability in the case of patent contention

JOS: Outside life-sciences patents rarely impact valuations at exit

Make sure you look for enough money to accommodate delays and problems

Offer letter is usually bound by exclusivity (for some period of time)

No skeletons in the cupboard, they will come out and warrants will hold you liable in the worst case

You should have invested if you expect a VC to invest, team investment should be "material"

"Material" is subjective

Due Diligence is need to support or contradict initial business plan impression

Is the venture dependent on IP for its success

Syndication limits control from any one investor

Costs grow by themselves, sales do not

Shay Garvey: Term Sheets

Irish VC’s front load the due diligence so that term sheets are close to complete

Unlikely to get two term sheets that are directly comparable

The term sheet gives clues as to what the investor wants to achieve

• Valuation
• People
• Timing
• Risk Management

How will you manage a sale and continue to run your business?

Brian Caulfield - Trinity Venture capital

Companies being acquired are much more mature

Companies going IPO are much more mature

Not looking for the perfect team, but need market opportunity

Avoid being a feature company (rating companies, OS feature companies e.g. DoubleSpace)

Price your technology sale on future potential sales if haggling over current sales is happening

Companies are bought not sold

Engage early with advisors so they are prepared for an out of the blue M&A request

Are there multiple potential acquirers?

Is there a deal on the table? If so negotiate for a % of the amount over the desired valuation

M&A advisor fees 2 to 5% of the transaction value

(see slide for other stats)

For stock deals, how long will it take to sell the stock, i.e. what is the amount of trading each day? 1m shares but 20,000 sold a day.

Tactics : We are note for sale

Deadlines drive the process

Colm Rafferty: Legal and Administration Process

Put a health warning in your business plan. Nothing contained is warranted.

Use the standard IVCA NDA/Confidentiality agreement

Take your legal advice at Term sheet stage

Test their eagerness for the deal by seeing what you can challenge/change in the term sheet

Ask for a set of warranties when presented with a due diligence questionnaire

Distinguish between what actions are controlled by VC vs what is controlled by the Board

I tried to use Webex recently. Turns out they debit your credit card each month without warning (38 euros a month) once the free trial expires. No bills, no invoices, just  38 euro clipped of your credit card each month.

Attached is my conversation with support.

Please wait while we find an agent to assist you…

You have been connected to Kirk Bridges.

Kirk Bridges: Hello Joe

Kirk Bridges: Sounds like you may have signed up for our free trail and did not cancel prior to the expiration of the trial

Kirk Bridges: You will need to contact the billing for that service @ 866-929-5483

Joe Drumgoole: Ok, but I can’t find the invoices anywhere on the website and I haven’t recieved any email advice regadding thse debits

Kirk Bridges: Did you sign up for Meet Me Now or Pc Now?

Joe Drumgoole: I have no idea. I tried using it once, but your servers in ireland are pretty awful

Joe Drumgoole: That was months ago.

Kirk Bridges: Did you use it for online meetings or to remotely access one of your computers?

Joe Drumgoole: Online meeting

Kirk Bridges: OK that was for Meet Me Now

Kirk Bridges: In order to get your invoices you will need to know your log in informaiton…do you remember it?

Joe Drumgoole: So regardless of whether I use the service or not you take 38 euros of my cerid card

Joe Drumgoole: and you never email me and invoice?

Kirk Bridges: Only if you do not cancel prior to the end of the free trial

Joe Drumgoole: Yes I have my login information

Joe Drumgoole: I’m logged in now

Kirk Bridges: Ok when you log in there is an area where you can look up your usage

Kirk Bridges: and invoices

Joe Drumgoole: Ok no meetings listed under reports? Where are the invoices?

Kirk Bridges: Your best solution would be to call the number and speak to a representative

Kirk Bridges: I don’t have access to pull up your account

Kirk Bridges: I am in the Sales Department

Joe Drumgoole: So there are no invoices? I have access to my account in front of me just direct me to them

Kirk Bridges: I can’t pull up your account to get you to the invoices

Joe Drumgoole: There are tabs on the
left My Meetings, One click setup, schedule a meeting, my contacts, my
profile, my reports, training support

Joe Drumgoole: Nothing about invoices

Kirk Bridges: Should be under either my profile or my reports

Kirk Bridges: Again… you should call the billinng department at the number I provided

Kirk Bridges: They would be better able to assist you

Joe Drumgoole: Ok, now I have to pay a international phone call to cancel a service I didn’t want int the first place?

Kirk Bridges: Ok I have a UK number

Kirk Bridges: 44-0-161-2500706

Joe Drumgoole: No joy, office closed.

Joe Drumgoole: So let me see if I have this correct. I signed up for a free trial that didn’t work via the web

Kirk Bridges: Check under subscriptions in your account for your invoices

Joe Drumgoole: You took my credit card

Joe Drumgoole: continued to debit it

Joe Drumgoole: Didn’t advise me of the fact

Joe Drumgoole: and now I can’t cancel the service on the web?

Kirk Bridges: I can transfer you to customer service now if you like?

Joe Drumgoole: Unless they can show me how to cancel on the web is there any point?

Kirk Bridges: They can show you how to cancel

Kirk Bridges: One moment

Mya James has entered the session.

Mya James: Hello Joe, I understand you want to cancel your MeetMeNow service.

Mya James: Is that correct?

Joe Drumgoole: Yes

Mya James: Please follow these steps to cancel your service

Mya James: You may cancel your MeetMeNow subscription by doing the following:

Log into your account.
Navigate to the Account tab once logged in.
Choose Subscriptions on the left navigation bar.
Click
Cancel on the Subscription of your choice (Both PCNow and MeetMeNow
subscriptions will be displayed even if you only signed up for one
service).

Joe Drumgoole: I also want a refund for the past few months when you have been debitting myaccount without advising me of the same

Joe Drumgoole: I’m logged in but there is no subscriptions tab on the left bar?

Mya James: What URL are you using to log in?

Joe Drumgoole: https://meetings.webex.com/mw0304l/mywebex/default.do?siteurl=meetings

Mya James: Can you try this site:
https://meetmenow.webex.com/MyWebExWeb/MyWebexPortal.portal?_nfpb=true&_pageLabel=MyWebexPortal_page_portalLogin&LOGOHEADER=true

Mya James: I will push the page to you

The agent is sending you to https://meetmenow.webex.com/MyWebExWeb/MyWebexPortal.portal?_nfpb=true&_pageLabel=MyWebexPortal_page_portalLogin&LOGOHEADER=true.

The agent is sending you to https://meetmenow.webex.com/MyWebExWeb/MyWebexPortal.portal?_nfpb=true&_pageLabel=MyWebexPortal_page_portalLogin&LOGOHEADER=true.

Mya James: Let me know is that works

Joe Drumgoole: logging in

Mya James: Ok.

Joe Drumgoole: I’m in

Mya James: Do you see the subscriptions tab now?

Joe Drumgoole: I see the subscriptions. I’m also a bit speechless that you don’t email a warning when the trail is cming to an end

Joe Drumgoole: trail->trial

Mya James: We do e-mail a warning about the trial coming to an end. However it could have gotten caught by a spam filter.

Joe Drumgoole: So how do I get my refund for the bills you sent me without advice? ie. email

Mya James: To assist with your refund, please send an e-mail to our support team at support.webex.com

Mya James: They will respond within 24 hours.

Mya James: You may also call if that better suits you.

Joe Drumgoole: And to cancel the current service?

Mya James: To cancel the current services, select cancel under the subscriptions tab.

Joe Drumgoole: Done

Kirk Bridges has left the session.

Mya James: I’m sorry your expirence with WebEx was less than pleasant.

Joe Drumgoole: Will be blogging your appalling "Free Trial terms".

Mya James: know if there is anything else I can do.

Mya James: Please let me know if there is anything else I can do.

Joe Drumgoole: Every other company I use sends invoice advice for each bill. Its a requirement here in ireland

Mya James: We offer a 14 day trial that does not require a credit card.

Joe Drumgoole: e.g. you may be in breach of EU law for billing without advice. I’ll be checking with my solicitor

Mya James: Is there anything else I can help you with sir?

Joe Drumgoole: No. Thanks personally for your assistance. I appreciate the support online

Joe Drumgoole: Which was excellent

Mya James: You are welcome.

Joe Drumgoole: But overall I can’t say I leave webex as a satisified customer

Mya James: Thank you for the compliment.

Mya James: I understand.

Mya James: Thank you for contacting WebEx, and have a Great Day!

Thank you for using WebEx. You may now close this window.

Your session has ended. You may now close this window.

Please wait while we find an agent to assist you…

You have been connected to Kirk Bridges.

Kirk Bridges: Hello Joe

Kirk Bridges: Sounds like you may have signed up for our free trail and did not cancel prior to the expiration of the trial

Kirk Bridges: You will need to contact the billing for that service @ 866-929-5483

Joe Drumgoole: Ok, but I can’t find the invoices anywhere on the website and I haven’t recieved any email advice regadding thse debits

Kirk Bridges: Did you sign up for Meet Me Now or Pc Now?

Joe Drumgoole: I have no idea. I tried using it once, but your servers in ireland are pretty awful

Joe Drumgoole: That was months ago.

Kirk Bridges: Did you use it for online meetings or to remotely access one of your computers?

Joe Drumgoole: Online meeting

Kirk Bridges: OK that was for Meet Me Now

Kirk Bridges: In order to get your invoices you will need to know your log in informaiton…do you remember it?

Joe Drumgoole: So regardless of whether I use the service or not you take 38 euros of my cerid card

Joe Drumgoole: and you never email me and invoice?

Kirk Bridges: Only if you do not cancel prior to the end of the free trial

Joe Drumgoole: Yes I have my login information

Joe Drumgoole: I’m logged in now

Kirk Bridges: Ok when you log in there is an area where you can look up your usage

Kirk Bridges: and invoices

Joe Drumgoole: Ok no meetings listed under reports? Where are the invoices?

Kirk Bridges: Your best solution would be to call the number and speak to a representative

Kirk Bridges: I don’t have access to pull up your account

Kirk Bridges: I am in the Sales Department

Joe Drumgoole: So there are no invoices? I have access to my account in front of me jsut direct me to them

Kirk Bridges: I can’t pull up your account to get you to the invoices

Joe Drumgoole: There are tabs on the
left My Meetings, One click setp, schedule a meeting, mt contacnts, my
profile, mty reports training support

Joe Drumgoole: Nothing about invoices

Kirk Bridges: Should be under either my profile or my reports

Kirk Bridges: Again… you should call the billinng department at the number I provided

Kirk Bridges: They would be better able to assist you

Joe Drumgoole: Ok, now I have to pay a international phone call to cancel a service I didn’t want int eh first place?

Kirk Bridges: Ok I have a UK number

Kirk Bridges: 44-0-161-2500706

Joe Drumgoole: No joy, office closed.

Joe Drumgoole: So let me see if I have this correct. I signed up for a free trial that didn’t work via the web

Kirk Bridges: Check under subscriptions in your account for your invoices

Joe Drumgoole: You took my credit card

Joe Drumgoole: continueed to debit it

Joe Drumgoole: Didn’t advise me of the fact

Joe Drumgoole: and now I can’t cancel the service on the web?

Kirk Bridges: I can transfer you to customer service now if you like?

Joe Drumgoole: Unless they can show me how to cancel on the web is there any point?

Kirk Bridges: They can show you how to cancel

Kirk Bridges: One moment

Mya James has entered the session.

Mya James: Hello Joe, I understand you want to cancel your MeetMeNow service.

Mya James: Is that correct?

Joe Drumgoole: Yes

Mya James: Please follow these steps to cancel your service

Mya James: You may cancel your MeetMeNow subscription by doing the following:

Log into your account.
Navigate to the Account tab once logged in.
Choose Subscriptions on the left navigation bar.
Click
Cancel on the Subscription of your choice (Both PCNow and MeetMeNow
subscriptions will be displayed even if you only signed up for one
service).

Joe Drumgoole: I also want a refund for the past few months when you have been debitting myaccount without advising me of the same

Joe Drumgoole: I’m logged in but there is no subscriptions tab on the left bar?

Mya James: What URL are you using to log in?

Joe Drumgoole: https://meetings.webex.com/mw0304l/mywebex/default.do?siteurl=meetings

Mya James: Can you try this site:
https://meetmenow.webex.com/MyWebExWeb/MyWebexPortal.portal?_nfpb=true&_pageLabel=MyWebexPortal_page_portalLogin&LOGOHEADER=true

Mya James: I will push the page to you

The agent is sending you to https://meetmenow.webex.com/MyWebExWeb/MyWebexPortal.portal?_nfpb=true&_pageLabel=MyWebexPortal_page_portalLogin&LOGOHEADER=true.

The agent is sending you to https://meetmenow.webex.com/MyWebExWeb/MyWebexPortal.portal?_nfpb=true&_pageLabel=MyWebexPortal_page_portalLogin&LOGOHEADER=true.

Mya James: Let me know is that works

Joe Drumgoole: logging in

Mya James: Ok.

Joe Drumgoole: I’m in

Mya James: Do you see the subscriptions tab now?

Joe Drumgoole: I see the subscriptions. I’m also a bit speechless that you don’t email a warning when the trail is cming to an end

Joe Drumgoole: trail->trial

Mya James: We do e-mail a warning about the trial coming to an end. However it could have gotten caught by a spam filter.

Joe Drumgoole: So how do I get my refund for the bills you sent me without advice? ie. email

Mya James: To assist with your refund, please send an e-mail to our support team at support.webex.com

Mya James: They will respond within 24 hours.

Mya James: You may also call if that better suits you.

Joe Drumgoole: And to cancel the current service?

Mya James: To cancel the current services, select cancel under the subscriptions tab.

Joe Drumgoole: Done

Kirk Bridges has left the session.

Mya James: I’m sorry your expirence with WebEx was less than pleasant.

Joe Drumgoole: Will be blogging your appalling "Free Trial terms".

Mya James: know if there is anything else I can do.

Mya James: Please let me know if there is anything else I can do.

Joe Drumgoole: Every other company I use sends invoice advice for each bill. Its a requirement here in ireland

Mya James: We offer a 14 day trial that does not require a credit card.

 

I checked my  email later, webex is not blocked so they plain don’t tell you you are getting screwed each month unless you check your credit card bill, which I do.

They weird thing is the support was good, its just the service overall sucks.

 

Darren asked people to write about their most serious injury as one of his 55 posts I hope you write" , so here you go Darren, be careful what you wish for.

I jumped through a plate glass window when I was younger, severing my femoral artery and puncturing my lower bowel with several pieces of glass. I was operated on that night ( a full midline laparotomy for those of you who are medically inclined), I was in intensive care for 5 days and spent 6 weeks in hospital after that. I lost a shed load of blood (I got 12 pints via transfusion) and had a catheter stiched onto my prick while I was sleeping, and when I woke up I had about 30 tension sutures stretched across my belly, which trust me, you don’t want to wake up to. I was also attached to the machine that goes bing.

The whole thing hurt like hell ( I now have a good idea what it feels like to be bayoneted), and pretty much had nothing to redeem it. I now have a killer scar running from just above my pubic bone to below my sternum and a nice ice breaker at dinner parties.

So this neatly segues into no. 55 on Darren’s list The only thing I can teach you is, don’t jump through a plate glass window, ever.

 

 

From InfoWorld, “SCO seeks bankrupty protection“, Sweet!

What do Dell do? They provide low cost computing resources to home users. Why is Dell’s star fading? Because they have  hit rock bottom, there is no other place to save money, their existing model has run out of steam. Instead they have made desperate lunges at the Games market and the printer ink market, neither of which are dell Core Competencies and therefore they struggle in both these spaces.

So what should they do? Well what’s cheaper than having Dell computer in your home? Not having a Dell computer in your home. What Dell should do is offer home users access to grid computing on a pay-as-you-go basis with access to as little or as much computing power as you require (ala S3 from Amazon but with Windows as the base operating system). They can still sell you a monitor, keyboard, mouse and box, but that  box is just a network connection to a blade server hosted in a Dell data centre that does all your computing.

They own the Windows and Office licenses, that you lease as part of your subscription (which keeps Microsoft happy, as they continue to stuff huge volumes of Vista and Office into  the market place) but they manage the storage and compute power, keep your computer humming and totally insulate you from hardware and software failure. The low cost set-top size boxed they give you can even include a cheap as chips disk to do really efficient local caching of content.

They get to continue building systems, but the systems are now almost completely rack based which means they can make much more credible sales to business. They also smooth out their revenue model because it goes to monthly subscriptions rather than lumpy seasonal purchases.  Finally they sell much higher priced more keenly specified desktops to the remaining market segment that previously were their Alienware customers.

Of course plans like these require a pair a cojones, which are sadly lacking in Dell at the moment.

Joel says,

I’ve been using Vista on my home laptop since it shipped, and can say with some conviction that nobody should be using it as their primary operating system — it simply has no redeeming merits to overcome the compatibility headaches it causes. Whenever anyone asks, my advice is to stay with Windows XP (and to purchase new systems with XP preinstalled).

My own Dell PC crapped out a few hours before a critical presentation so I had to go retail for a replacement and retail means Vista these days. My own personal Vista stinkbombs are,

• I can’t connect to a XP hosted printer share, at all, ever. This seems to a common problem judging from my web searching, one that Microsoft hasn’t addressed.
• All the bells and whistles on the new windows explorer just make my head hurt but the one consistent feature I used on XP (the ability the view a folder of photos as a film strip) has been removed.
• It takes way more memory

Stay away as long as you can in the hope that the sound of all us early adopters wailing will make Microsoft see sense.

Vista reminds me of an old skit on X-Windows so with credits to Phrack:

Vista. A mistake carried out to perfection.
Vista. Dissatisfaction guaranteed.
Vista. Don’t get frustrated without it.
Vista. Even your dog won’t like it.
Vista. Flaky and built to stay that way.
Vista. Complex nonsolutions to simple nonproblems.
Vista. Flawed beyond belief.
Vista. Form follows malfunction.
Vista. Garbage at your fingertips.
Vista. ignorance is our most important resource.
Vista. It could be worse, but it’ll take time.
Vista. It could happen to you.
Vista. Japan’s secret weapon.
Vista. Let it get in *your* way.
Vista. Live the nightmare.
Vista. More than enough rope.
Vista. Never had it, never will.
Vista. No hardware is safe.
Vista. Power tools for power fools.
Vista. Power tools for power losers.
Vista. Putting new limits on productivity.
Vista. Simplicity made complex.
Vista. The cutting edge of obsolescence.
Vista. The art of incompetence.
Vista. The defacto substandard.
Vista. The first fully modular software disaster.
Vista. The joke that kills.
Vista. The problem for your problem.
Vista. There’s got to be a better way.
Vista. Warn your friends about it.
Vista. You’d better sit down.
Vista. You’ll envy the dead.

When a blah company files suit against other blah companies on InfoWorld.

So according to an InfoWorld article,

…legislators in Massachusetts, which in 2005 first required that all agencies would be forced to store public documents in non-proprietary formats like HTML or PDF, admitted in the discussion that they have not yet been able to provide tangible evidence that moving to an ODF system would deliver the financial savings some backers of the movement envision.

So one single state decides to change from a file format and suddenly faces the full might of the Microsoft marketing machine.  There are intrinsic benefits to using an open  format that accrue over the lifetime of a document, but the costs in the initial phase of changeover (the case in any transition) will outweigh the benefits. It would be doubly difficult of Massachusetts to account for its costs given the huge legal battle it has fought to date.

Its like looking into a startup six months after it hits the start line and saying, “why aren’t you profitable?”