3.01.2006

Dellienware: Will Aliens get abducted?


UPDATE March 22, 2006: Looks like I was right.

I recently wrote a column for the upcoming issue of Custom PC Magazine. You’ll have to pick up a subscription to read it, as I said before this is among the best “hardware lifestyle” magazines in the world. Although Computer Power User, PC Gamer, and Maximum PC are also among my favorites, Custom PC is fantastic; the photography is good enough to eat, and the layouts are scrumptious.

The story is about Dell and the changes that I think they will go through this year. The column is called “The Bear Hath Awoken”, and the following is the “sequel” to the column.

Dell + Alienware = Dellienware. Is it possible? Yes, at least I think so. I won’t get too far into details as to why I believe this is going to happen, but I will offer some of my thoughts. Even though Dell has never been known to make acquisitions, times are changing and so is their brand positioning.

First we all know that Dell cannot risk losing their stronghold in the server space therefore a potential relationship with AMD is bound to occur. That still leaves the question of the consumer market.

With the recent Intel/Apple relationship it’s clear that 15% (or whatever) of the consumer space for Dell may not be enough. Apple is likely to go to 8% with the help of Intel over the next year or so. The PC gaming market is threatening Dell’s “perceived technology leadership” – and ultimately the consumer space. The Alienware brand is cooler than Dell, and perhaps a likely candidate for Dell to take over based on size alone.

These are just some observations;

1) Dell is not unlike a big bad bear that has been awoken from his hibernation.

2) Dell knows they need to grow, and they need to be perceived as a leading edge company.

3) Dell can’t crack the “cool” factor with the Dell brand.

4) I’m pretty sure if offered a check (cheque for my Canadian/U.K. brothers and sisters) the guys at AW may jump at the chance to cash it.

5) Dell could take on another brand and grow it as an individual brand separate from Dell – perhaps?

Why the potential for a Dellienware and not another?

Alienware is widely considered to be the volume leader in gaming, they have scale. To me scale isn’t as important as “customer experience”, but time will tell if I’m right. I have not for a second ever considered dumping our price in order to compete head to head with Dell like our competition has. I believe the Voodoo brand is all about the experience, and as a result we keep adding more value to our experience – and we will continue to do so regardless if this happens.

On the other hand I can't fault my competition for single handedly taking on a giant. Though I believe it changes their brand position I think they have had Dell in their crosshair for years.

I am not sure about the move for Dell, but I am sure that Steve Jobs is God according to Wall Street, Hollywood, and every mainstream publication – and I think Michael Dell wants to change that. I can think of better ways of changing it, but hey, what do I know? This is all pure speculation.

Whether I am right or wrong AMD is going to win – and Dell may likely come out a winner as well. Imagine what a deal like this does to change our landscape.

This year will certainly be an interesting one no doubt. Of course when I say “Dellienware” I am being facetious, but I believe an acquisition is on the horizon. I'm looking forward to the comments, I think this should make for an interesting topic.

This goes out to Charlie from the Inq: If this does indeed occur I still win and you’re wearing a bunny suit even if I have to throw you in it myself!

53 comments:

Jonathan McKay said...

Perhaps the only thing I would disagree with is Dell's motives. Based on my extraordinarily limited observation, I don't think Dell is trying to capture the 'ultra high end gaming' market. Granted this is a very sweeping statement to make, but here are my reasons:

Look at the release of the XPS m140: it is not a gaming machine by any stretch of the imagination, and really seems like it was released to compete with other media centered 'thin and lights' such as the dv1000. In this move, Dell is willing to dilute gaming prowess of the XPS brand to capture a more general consumer market. The XPS 200 for desktops represents the same type of brand dilution.

Also, the visual design of XPS notebooks and desktops is categorically more austere than companies like Alienware or Voodoo, with a few LED's being the main concession on only the highest end models. Again, this move seems like it is to reach a broader audience than the botique companies.

I think that Dell's XPS progression shows how the XPS pursues the market segment one very small notch below the boutique manufacturers. These are that read PC Gamer rather than CPU religiously, and visit Cnet rather than Tom's Hardware or anandtech. This market compares Dell to Gateway or HP, not to Alienware, or simply know they want a Dell and want something one step above the Inspiron.

Dell would need to be pursuing the ultra high end market to want to acquire Alienware, and their recent releases (prototypes notwithstanding) seem to be taking the XPS line in the opposite direction.

Now, I'm curious about your take these points.

-Jonathan

Inkwell said...

If XPS has been at all successful in terms of sales for Dell, it could whet their appetite for a true high end lineup. I would love to hear from Rahul if there is anything to be gained by Dell from a niche presence in the high end arena, similar to when the Big Three American carmakers used to say "Race 'em on Sunday and Sell 'em on Monday". Lots of developments in the car industry came out of the investment in racing that the Big Three made. Is there any comparable synergy to be gained by Dell from what would be for them a small niche investment in a true high end lineup?

Rahul Sood said...

Inkwell, drop me an email when you can please, I would like to look into the message you sent as well. In the meantime I'll read these posts and respond!

Rahul Sood said...

I don't think Dell is trying to capture the 'ultra high end gaming' market.

I don't believe Alienware is trying to capture the ultra high end gaming market anymore either.

I think that Dell's XPS progression shows how the XPS pursues the market segment one very small notch below the boutique manufacturers.

The XPS design team has Alienware directly in their crosshairs I think.

Dell would need to be pursuing the ultra high end market to want to acquire Alienware, and their recent releases (prototypes notwithstanding) seem to be taking the XPS line in the opposite direction.

It's tough to say, I think the potential is there for an aquisition, and I believe AW is big enough to make an impact on any large OEM.


Inkwell said...
I would love to hear from Rahul if there is anything to be gained by Dell from a niche presence in the high end arena, similar to when the Big Three American carmakers used to say "Race 'em on Sunday and Sell 'em on Monday".


Yes, I think there is something to be gained, thus the reason they launched XPS. They aren't racing well on Sunday though, perhaps due in part to their partnership with Intel.

Is there any comparable synergy to be gained by Dell from what would be for them a small niche investment in a true high end lineup?

You'll have to ask Dell this, I have my own theories on it however. :)

Nate said...

Rahul, do you think Dell would bother aquiring Alienware, or mearly snub it out to replace it with XPS? Maybe Dell has had an awakening, but I honestly believe they would rather wipe Alienware out and put XPS in it's place.

Anonymous said...

Gateway is probably a better fit and would have more reason to link with Alienware than Dell. See my recent post for reasons why.

John Smith
www.privateproductivity.com/weblog/

Rahul Sood said...

Agreed on Gateway, for sure, but I don't think they get it. I think they have more problems than ever before.

Enis Sahinovic said...

I don't think that Dell will acquire Alienware since they already invested money in their XPS line. However, I'll go slightly off-topic and ask you a question: "Would you sell VoodooPC to Dell?".

Rahul Sood said...

Well, the more I look at it, the more I think my guess is probably right.

Everyone will be surprised when this
happens because Dell normally doesn't make such acquisitions. It will certainly raise eyebrows, no doubt.

Lt.Col.Claymore / Albert said...

Well if it happens Rahul
will it pose a huge Tread for Voodoopc ??

cuz that's something i really dont like to see

just plain sucks..!!

Greez Albert

Anonymous said...

Rahul Sood, based on this nonsense that you have created, you have to be the biggest idiot on the internet.

Alienware is a success story that you could only dream of living. You are no where near competent enough to imagine a scenario that would even be close to something that could be considered as a coming reality.

Your little fantasy imagines that Alienware would accept a check from Dell at the drop of a hat. If your smoking that funny stuff, now is the time to give it up.

If your mind was more clear you would see that your Voodoo has become left behind in the High End market. The Alienware community is growing by giant leaps and bounds and the community is is also growing with owners of multiple Alienware Computers.

The main point here is that you are just a nobody that is trying to draw attention to your brand, Voodoo, by using the Name ALIENWARE. You can put together any old stupid story and include the name, ALIENWARE, and you have peoples attention. Then you can slip in your little name, Voodoo. People can see right through this. Good Luck to you in 2006. Hope you avoid the mistakes of 2005 but it looks like your just looking for trouble with this story. Good Luck, Sincerely

Alienware Area 51 Owner

Anonymous said...

blog owner approval??? that figures. no wonder all these comments agree with you.

Anonymous said...

Fact is that Alienware IS accepting a nice FAT check from Dell. Keep an eye out for the announcement this month. ;)

AW is all about money, not quality and they'd sell for the right price to ANY company.

BTW, Dell is not replacing AW, they're backing it up financially to make it another monster brand... just like DELL.

Rahul Sood said...

Rahul Sood, based on this nonsense that you have created, you have to be the biggest idiot on the internet.

Nice, who's the runner up?

I should mention not once in my article did I say a bad word about Alienware. I do respect them, and I congratulate them on their success.

you are just a nobody that is trying to draw attention to your brand, Voodoo

Coming from someone named "Anonymous" I'd say you're the nobody ;)

Ken Tynan said...

Rahul Sood, based on this nonsense that you have created, you have to be the biggest idiot on the internet.

Here we have a classic example of the ad hominem approach.

Dude, if you disagree with him, show him where you think he is wrong. Attacking him personally doesn't give your point any weight at all...

Alienware is a success story that you could only dream of living. You are no where near competent enough to imagine a scenario that would even be close to something that could be considered as a coming reality.

Not once did Rahul say that Alienware was not a success story. He is just speculating on their next step in their evolution. And you would really need to define success. Does success just mean “grown bigger”? If so, then yes, Alienware is a success. But some would argue that their breaking into the “retail box” market cheapened their brand, therefore viewing it as a bad move. But aren’t opinions wonderful?

Oh and the personal attacks are not helping you if you want to be taken seriously.

Your little fantasy imagines that Alienware would accept a check from Dell at the drop of a hat. If your smoking that funny stuff, now is the time to give it up.

This seems to have little point to your argument apart from looking for a reason to attack him again.

Rahul already stated that he believes that Alienware would jump up the chance to join Dell. What's the point in repeating it?

If your mind was more clear you would see that your Voodoo has become left behind in the High End market.
Care to back that claim up and elaborate?

Remember, Rahul's whole article is his opinion and speculation.
You, my friend, have made a factual claim. Back it up, or shut up.

The Alienware community is growing by giant leaps and bounds and the community is is also growing with owners of multiple Alienware Computers.

No one is disputing this. Rahul never claimed otherwise. The fact that AW now makes PC's for the regular home user, this can't be logically disputed.

So with that, exactly what point are you making here?

The main point here is that you are just a nobody that is trying to draw attention to your brand, Voodoo, by using the Name ALIENWARE.
No, actually, your main point seems to be to show that you are an Alienware fan that has taken this article as a personal attack, which it is not. But regardless, you attack Rahul instead of his message.

Yes, you caught him. His whole marketing campaign is to advertise for the competition. **rolleyes**

You can put together any old stupid story and include the name, ALIENWARE, and you have peoples attention. Then you can slip in your little name, Voodoo.
A repetition of the above paragraph. Saying it twice does not a valid point make.

People can see right through this. Good Luck to you in 2006. Hope you avoid the mistakes of 2005 but it looks like your just looking for trouble with this story. Good Luck, Sincerely

Alienware Area 51 Owner


Once again, another claim with no back up. What mistakes did Voodoo make? Care to elaborate? And please do so with facts… (If you make a factual claim, back it up with facts.)

----

What we have here is the typical reaction from what some folks call a "Fan Boy". Instead of reading the article, breaking it down and trying to see what it is saying (or predicting), he just sees it as saying something he doesn't like.

I can't say 'doesn't agree with' as “Fan Boys” tend not to think that deeply into the topic (And I am sure he didn't either.) And if they do say they don't agree with it, they can't tell you why without attacking the person who first made the disagreed with statement.

Is Rahul right? Who knows. I, unfortunately do not know enough about the ins and outs of this market to comment, or counter point his thoughts. Only time will tell.

But lets be honest, I am surprised that it took as long as it did to get the fanboys to come out of the wood work.

Ignore him Rahul. I know you've been in the business long enough to know these types.

Anonymous said...

Funny thing is that Rahul is absolutely right... he must have heard about the buy through the same channels I did. Everyone and their mother already know about the merge. It's just that Rahul can't claim anything other that "speculation" w/out the possibility of legal repercussion, which is why I'm posting anonymous!

Rahul Sood said...

blog owner approval??? that figures. no wonder all these comments agree with you.

Huh? You aren't being censored here, the reason for the "blog owner approval" is because I get tons of spam in comments otherwise. Try setting up a blog and see for yourself, people will try to sell Viagra anywhere.

Now, back to the topic at hand...

Anonymous said...

Mikey Dell can buy my AMD only pc company too if he likes, its Called "HELL PC" hey the advertising changes would be minimal, they only need to remove the catch phrase we use "we kick the Hell out of DELL and INTEL"

Dan said...

good blog rahul. it interesting to think of what would happen. As for every serious fan, we all know alienware doesnt hold a candle to voodoo pc. This statement would be true about alienware 5 to 10 years ago but when you can go to a best buy and purchase a alienware just tells me that that they have fallen from grace!

Anonymous said...

Huh? You aren't being censored here, the reason for the "blog owner approval" is because I get tons of spam in comments otherwise. Try setting up a blog and see for yourself, people will try to sell Viagra anywhere.
It's true, spammers are crafty...

As an ex-employee of Dell, I tend to agree. The only thing I would point out is that they are not as concerned with cool as they are with dollars, and that as a huge OEM, they have some pretty "let's do it tongiht, but I won't make you breakfast tomorrow" types of deals with large vendors, specifically Intel and MS. I'm pretty sure they get a lot of the perks they do as a result of, say an exclusive deal with Intel. Part of they reason they don't do AMD right now is yeild, although that is changing as AMD grows. Another, perhaps bigger reason, is that uncle Intel brings a big bag of gifts to reward Dell for staying away from those AMD kids; they're a bad influence.

Anonymous said...

You may be right, Rahul. But didn't I read your company had talks with Best Buy last year, along with Falcon and Velocity, when they were looking for a premium brand to compete with the XPS? Does that indicate you were not interested, or you just could not handle the volume?

Also, now that Velocity is in most Best Buy stores and on bestbuy.com, are they the next takeover target, perhaps by Gateway? Certainly, they are one of the biggest boutique builders, probably only second to Alienware in volume. That would leave you and Falcon to settle back into your niche alone.

If given the chance, would Voodoo consider going into retailers in any way? Somebody has to compete with Dellienware, right?

Rahul Sood said...

Dan said:

good blog rahul. it interesting to think of what would happen.

Yes, the possibilities are endless. I have some great stories behind this blog which may eventually come out. There's some interesting things happening.

As for every serious fan, we all know alienware doesnt hold a candle to voodoo pc.

Well, that all depends on who you ask, but thanks for pointing that out :)

This statement would be true about alienware 5 to 10 years ago but when you can go to a best buy and purchase a alienware just tells me that that they have fallen from grace!

They went large scale, although I'm sure there are ways to scale without commodotizing the market.

Anonymous said...

As an ex-employee of Dell, I tend to agree. The only thing I would point out is that they are not as concerned with cool as they are with dollars, and that as a huge OEM, they have some pretty "let's do it tongiht, but I won't make you breakfast tomorrow" types of deals with large vendors, specifically Intel and MS. I'm pretty sure they get a lot of the perks they do as a result of, say an exclusive deal with Intel. Part of they reason they don't do AMD right now is yeild, although that is changing as AMD grows. Another, perhaps bigger reason, is that uncle Intel brings a big bag of gifts to reward Dell for staying away from those AMD kids; they're a bad influence.

Interesting perspective. I am pretty sure that Dell isn't married to Intel as much as before - especially in light of the Steve Jobs/Apple relationship.

I think Alienware will be a good catalyst for Dell into AMD.

Anonymous said...

You may be right, Rahul. But didn't I read your company had talks with Best Buy last year, along with Falcon and Velocity, when they were looking for a premium brand to compete with the XPS?


Yes, this is quite true. We declined Best Buy multiple times because we believe our premium brand PCs shouldn't be placed in a Best Buy retail environment. We knew Velocity would go ahead, and I assume if this deal happens then Best Buy might think about furthering their relationships with their vendors perhaps.

Does that indicate you were not interested, or you just could not handle the volume?

We were not interested, though in our new facility we can increase our volume by ten times. We didn't see Best Buy as the right fit.

Also now that Velocity is in most Best Buy stores and on bestbuy.com, are they the next takeover target, perhaps by Gateway?

I don't think Gateway has any clue what to do. If you read their financials you might find that they are in a bit of a mess at the moment. They lost their CEO and they're looking now. If you asked me 2 years ago I would have told you that Gateway should have bought a boutique company and not E-Machines.

Certainly, they are one of the biggest boutique builders, probably only second to Alienware in volume. That would leave you and Falcon to settle back into your niche alone.

I believe Velocity's volumes have increased, but not as much as one might imagine. I don't think Best Buy moves as much Velocity as they did Alienware.

If given the chance, would Voodoo consider going into retailers in any way? Somebody has to compete with Dellienware, right?

It's tough to say. I think there are better ways to scale our brand.

Anonymous said...

yyeeww right nobody is buying alienware anyway... why???? google it... alot of complaints no costomer services

Lt.Col.Claymore / Albert said...

well these day's company's want to beat ther competition

like Ati and Nvidia
its the same with custom pc builders

so it might happen

hé Rahul but if they join together
will this pose a huge Thread for you ? or you still got thing up your sleeve :-)

Dan said...

Hey Rahul,

Let me put it this way! If I had a friend of mine that wanted the best dang PC on the market and he/she wanted built from a company (not by me), Alienware wouldnt be my on my list. There are only a very few companies (besides Voodoo) that would be mentioned.

BTW, I dont own any rig built by a company. I did it myself.

Your company set a standard in custom PC's, especially the art of cable folding. I still have my Maximum PC magazine with your article.

Dan

Rahul Sood said...

LT. said:
Rahul but if they join together will this pose a huge Thread for you ? or you still got thing up your sleeve :-)


Dell always poses a threat, but I don't believe this relationship poses a threat to us. I think it just raises the profile of the true custom PC shops again.

Dan said...

Let me put it this way! If I had a friend of mine that wanted the best dang PC on the market and he/she wanted built from a company (not by me), Alienware wouldnt be my on my list. There are only a very few companies (besides Voodoo) that would be mentioned.


Thank you.

BTW, I dont own any rig built by a company. I did it myself.

Your company set a standard in custom PC's, especially the art of cable folding. I still have my Maximum PC magazine with your article.


Yes we did, thanks for reminding everyone else :)

Anonymous said...

RENEGADE? Ever heard of it?

Dell's purportedly hoping to sell 50-100 of these gaming rig systems, estimated street price at 4-8k (no one knows yet) without monitor..

WHY THE FLIP would they buy alienware, when they are already planning to produce alienware class machines themselves?

For gods's sakes, they are planning on offering warranty support on an overclocked CPU.. Yes, dell is going to issue a CPU in an over 'spec' state, and support it.. why do they need alienware?

Daniel Eckert said...

Interesting thoughts - all. I also enjoyed the comparision between the auto market and this story.

However, if I was Dell - there really isn't a value to buying AW. I would split XPS off from Dell and let them go wild. With the funding from parent - plus the purchasing power, manufacturing, and engineering of the parent - what would you really be gaining by buying AW? It would be like Harley Davidson buying Orange County Choppers (OCC) - it just doesn't make sense when they could probably do it better themselves.

If they are worried about AW engineering - it would be cheaper just to poach their key guys - and let AW continue its quest to sell rigs at BestBuy and (OMG) Circuit City.

My first custom rig was an AW. I bought only 1 more - not because I wanted something special - it was more because AW got too big - I was getting less value - even if I was getting a "deal". Each box lasted about 12 months before I needed to upgrade - not by buying new parts - but buying a new rig. This was crazy. I then hired a company to build my next rig (which I'm still using after 3 years) NOW THAT IS VALUE. My next Gaming PC/Laptop with be either a Falcon or Voodoo (the custom rig company when out of business) - not because I'm buying a brand - because I'm getting value - from top-notch engineering from a company that does this because its FUN - it's a passion. I think AW lost that 5 years ago. Dell never had it.

Rahul Sood said...

Anonymous said...

RENEGADE? Ever heard of it?


Yep.

Dell's purportedly hoping to sell 50-100 of these gaming rig systems, estimated street price at 4-8k (no one knows yet) without monitor..

Yeah, I think they'd want to sell more. Voodoo will sell more than 50 quad SLI systems without even breaking a sweat.

WHY THE FLIP would they buy alienware, when they are already planning to produce alienware class machines themselves?

...at this point it's all speculative - but there are many reasons Dell may do this.

For gods's sakes, they are planning on offering warranty support on an overclocked CPU.. Yes, dell is going to issue a CPU in an over 'spec' state, and support it.. why do they need alienware?

Read the blog. FYI Dell already offers XPS with an overclockable CPU bios.

Daniel Eckert said...

Interesting thoughts - all. I also enjoyed the comparision between the auto market and this story.


Thank you.

However, if I was Dell - there really isn't a value to buying AW. I would split XPS off from Dell and let them go wild. With the funding from parent - plus the purchasing power, manufacturing, and engineering of the parent - what would you really be gaining by buying AW?

I didn't say Dell "should" buy AW, I said they "may".

It would be like Harley Davidson buying Orange County Choppers (OCC) - it just doesn't make sense when they could probably do it better themselves.

Perhaps, I could think of other analogies as well.

If they are worried about AW engineering - it would be cheaper just to poach their key guys - and let AW continue its quest to sell rigs at BestBuy and (OMG) Circuit City.

I don't think Dell is worried about engineering in this case.

My first custom rig was an AW.... I'm getting value - from top-notch engineering from a company that does this because its FUN - it's a passion. I think AW lost that 5 years ago. Dell never had it.

Interesting perspective, thank you for the comments!

Lt.Col.Claymore / Albert said...

Rahul Said:
Dell always poses a threat, but I don't believe this relationship poses a threat to us. I think it just raises the profile of the true custom PC shops again.


Yhea thats True Rahul
good Expample are your'e RAGE and OMEN 100% Pure custom build

not to mention the OMEN Elemental
hot Damn that one heck of a Killer RIG

Anonymous said...

FWIW, there will be ~5000 Renegade systems on offer and there is strong demand with plenty of people who have already requested a config. Congrats on the 50 systems without breaking a sweat Rahul but the typically target audience of a Dell product is much larger and there are usually a lot more people interested in acquiring the items.

Now I don't know who you have been talking to regarding your last few posts on Dell, nor do I understand your infatuation with all things Dell (i.e. Dell going AMD, Dell buying Alienware etc) but a fair bit of the information you are providing is incorrect.

The XPS line is not simply for high-end systems. It is designed for an overall experience (notice the X in the name?). This includes a complete bundle, software/support/warranty and the like. The XPS 600 is still the flagship and competes well with other flagships out there even with a pentium processor.

The XPS m170 is probably the best all-round gaming notebook out there and the new 20" er will be interesting.

The XPS line is doing extremely well so it is a little suprising why you would consider them to be wanting to go a different way. Also Dell and XPS have a much larger market outreach than Alienware (or Voodoo/Falcon etc for that matter).

The gaming market is a niche and they are catered for. Dell should change its advertising and focus the different segments better but their ads point out the varying strengths and market segments for the products. Further, the website also shows this when selecting items from the configurator.

By year end, essentially the entire lineup is tageted at being Vista compliant (i.e. have an option or come standard with a discrete video card which is vista ready).

Rahul Sood said...

Anonymous said...

FWIW, there will be ~5000 Renegade systems on offer and there is strong demand with plenty of people who have already requested a config.


My response was directed to the previous person who suggested Dell only planned on selling 50-100 machines. I imagine they planned to sell more. Somehow I don't think the Dell brand can support an $8000 PC (if they plan to sell it for $8000).

Congrats on the 50 systems without breaking a sweat Rahul but the typically target audience of a Dell product is much larger and there are usually a lot more people interested in acquiring the items.

Again, I was responding to someone who suggested "Dell's purportedly hoping to sell 50-100 of these gaming rig systems,". We will easily blow through 100 QUAD SLI machines if the technology is all what we hope it will be.

Now I don't know who you have been talking to regarding your last few posts on Dell, nor do I understand your infatuation with all things Dell (i.e. Dell going AMD, Dell buying Alienware etc) but a fair bit of the information you are providing is incorrect.

:)

... I believe the information I am providing is correct.

The XPS line is not simply for high-end systems. It is designed for an overall experience (notice the X in the name?). This includes a complete bundle, software/support/warranty and the like. The XPS 600 is still the flagship and competes well with other flagships out there even with a pentium processor.

Yeah, although PC Mag disagrees.

The XPS m170 is probably the best all-round gaming notebook out there and the new 20" er will be interesting.

I think it's fantastic, but I think the Voodoo ENVY Middleweight u:732 is a better notebook (as is the Heavyweight u:709, and the upcoming u:909. Check out the review from G4.

he XPS line is doing extremely well so it is a little suprising why you would consider them to be wanting to go a different way.

Let's just say it's an educated guess. I don't usually write things unless I have good reason.

Also Dell and XPS have a much larger market outreach than Alienware (or Voodoo/Falcon etc for that matter).

Way bigger, Dell sold 10,000,000 PCs in the last quarter of 2005. Their volume and reach is insane. The trouble is they are a saturated sponge, and rather than "wringing out the sponge" they are going to add more sponges to their mix.

The gaming market is a niche and they are catered for. Dell should change its advertising and focus the different segments better but their ads point out the varying strengths and market segments for the products.

It is certainly a niche, but it's a niche that remains very influential.

By year end, essentially the entire lineup is tageted at being Vista compliant (i.e. have an option or come standard with a discrete video card which is vista ready).

Cool, ...don't be surprised if I'm right on this one.

Anonymous said...

FWIW, there will be ~5000 Renegade systems on offer and there is strong demand with plenty of people who have already requested a config. Congrats on the 50 systems without breaking a sweat Rahul but the typically target audience of a Dell product is much larger and there are usually a lot more people interested in acquiring the items.

Thank you Michael Dell. Keep living your professional PR fanboy life.

I think Dell is just after the outstanding Costa Rican tech support experience Alienware offers as an upgrade to the Indian call center Dell serves us with.

They really should be watching the Velocity/Best Buy relationship IMO. Best Buy has the deep pockets to make a run at Dell like nobody else can right now, and Velocity is cool enough to do some damage once people learn more about them. BBY must have selected them with some good reason and due dilegince.

Anonymous said...

They really should be watching the Velocity/Best Buy relationship IMO. Best Buy has the deep pockets to make a run at Dell like nobody else can right now, and Velocity is cool enough to do some damage once people learn more about them. BBY must have selected them with some good reason and due dilegince.

It's me again. I should have mentioned that I don't think Voodoo competes directly with Velocity, except perhaps in the VM Raptor products. They do line up against XPS better than Alienware, however. Alienware looks like a silly toy to most grownups.

inkwell said...

1. BBY would have to have some pretty deep pockets indeed, or more likely, their hands in the pockets of a Goldman or some other hefty wall street partner to buy a company with 2.5 times their own market cap like Dell.

2. You cant look at two PCs and explain why Dell would want to buy AW. Maybe they could do it cheaper internally or maybe they cant. Even if they can, how long would it take them? How much would that time cost them? Would they get the same sizzle from the stock market if they did it internally instead of buying "cache" of an established name? Has the Board decided they need to look into acquisitions and are they prepared to build this niche play by dilution rather than cash? There could be plenty of reasons we cant even imagine for this acquisition that have nothing to do with who builds what and how well.

3. I would bet that Michael Dell would not trae places with Rahul and Rahul would not trade places with Michael Dell. They each have different visions and goals for their companies and each have presumably exceeded, perhaps beyond their wildest imaginations when they started. Before you say that Voodoo is superior to Dell, you need to establish how you are judging. The bar is different for each company and they are both successful. Was a Duesenberg a better car than a Model T? arguably so. But was Duesenberg a better car company than Ford? Arguably not even close. There is more to a successful company than making the best product. There is more to being a successful company than selling the most units. But both are laudable, extraordinary accomplishments.

Anonymous said...

I'm the "why the flip commentator"

http://www.hexus.net/content/item.php?item=4332&page=2

is the source of my 50-100 sold comment.

what you missed is, -dell may ship xps systems with an overclockable bios, but doing so voids your warranty with them.. (or used to)

renegade ships with the cpu already overclocked~ above and beyond intels specifications for the device, and dell supports it in that as configured state...

Anonymous said...

I wish I had something more useful to add, but I do feel obligated to share my AW and Dell experience.

I had an AW51M for about a year and it was the worst computer owning experience ever. The case fell apart, and their service just sucked. I ended up having to send the machine back to AW so they could put the guts into a new case. Once receiving it back, I promptly sold it on eBay.

While the AW was away at the factory for an overhaul I purchased a first gen XPS the second month they came out. So I've got the big bulky first gen and it's super solid. It's not the most attractive machine, but it's very powerful, and very reliable. I do wish I had some of the features of a VooDoo, or even PowerBook, but I'm definintely very happy with my decision.

In a nutshell, I hope AW has gotten better, because I wasn't happy until the day I received my XPS.

Anonymous said...


They really should be watching the Velocity/Best Buy relationship IMO. Best Buy has the deep pockets to make a run at Dell like nobody else can right now, and Velocity is cool enough to do some damage once people learn more about them. BBY must have selected them with some good reason and due dilegince.

Of course there is a reason, because Alienware refused to continue selling through BBY. I guess they had to choose the first runner up (and yeah, it wasn't Voodoo).

Anonymous said...

Of course there is a reason, because Alienware refused to continue selling through BBY. I guess they had to choose the first runner up (and yeah, it wasn't Voodoo).

The AW deal in BBY went bad because so many people returned their systems because of quality and tech support issues. Velocity is not experiencing nearly as much returns because they support the problems that arrise better. Also, AW would not allow Best Buy to do repairs for customers whereas Velocity gives the customer the choice of going in to a store or working directly with VM, so easy stuff can be handled at the convenience of the customer.

On a unit sales basis, VM is selling more in our store than Alienware did because of three reasons: 1) The case is high quality aluminum and feels solid and the window shows the quality construction better and 2) VM has give more training and marketing support so associates don't feel silly talking with customers about these systesm, and 3) their systems appeal to more than just gamers because they don't look like an alien head and chase off high end customers that are not gamers. It might not hurt that units are actually in stock, too.

I hope/expect Velocity will roll out to more BBY stores this year. Also, don't forget AW is sold on CircuitCity.com, so they are still in retail, kinda.

Rahul Sood said...

Of course there is a reason, because Alienware refused to continue selling through BBY. I guess they had to choose the first runner up (and yeah, it wasn't Voodoo).

Actually, first runner up was Voodoo and Falcon. We both declined based on many factors. Velocity jumped in and we wish them well. As far as volumes go, from what I understand Velocity doesn't do near the volumes Alienware did in Best Buy - but Velocity has a much better contract with them. Best Buy will probably work closer with Velocity if this "Dellienware" comes true.

Anonymous said...


On a unit sales basis, VM is selling more in our store than Alienware did because of three reasons: 1) The case is high quality aluminum and feels solid and the window shows the quality construction better and 2) VM has give more training and marketing support so associates don't feel silly talking with customers about these systesm, and 3) their systems appeal to more than just gamers because they don't look like an alien head and chase off high end customers that are not gamers. It might not hurt that units are actually in stock, too.

I thought we were supposed to post our comments here, if you wish to advertise pay some time on TV (lol)

I hope/expect Velocity will roll out to more BBY stores this year. Also, don't forget AW is sold on CircuitCity.com, so they are still in retail, kinda.


The only thing you see in circuitcity.com is an Alienware add that directs the customer to Alienware's website.

Anonymous said...

Alienware is THE WORST company I have EVER EVER dealt with. Sure, they may rebrand some nice components, the hardware is what it is, but the company's customer service is absolutely horrible. BUYER BEWARE !

tarsoniz said...

I think a lot of people here are overlooking a very obvious reason why Dell would want Alienware.

Dell recently started selling retail-boxed AMD processors and might have caught its first real taste of the demand for AMD-based systems. As things currently stand, Dell exclusively uses Intel CPUs in its systems. That we all know. We also know that Intel retaliates against (or at least threatens) OEMs who choose to sell AMD-based computers. Three years ago, Dell might have been able to say, "Screw you!" to Intel; however, Intel's battery-friendly mobile CPUs have given Intel some leverage against Dell in the competitive ultra-portable laptop market, which can be thought of as the "uber 'leet" of mobile computing. Add to this Apple's move to Intel chips, and Dell has lost much of its negotiating power against Intel. If Dell switches to using AMDs in its own systems, Intel can screw Dell over in a big way.

Enter Alienware. The company already sells AMD-based systems, and it would significantly damage Alienware if they were to suddenly move exclusively to Intel. If Dell buys Alienware, this gives Dell two key bargaining points when they sit down again with Intel a few months down the road:

1) "We already spent a ton of money buying Alienware, and we cannot hope for that branch to remain profitable if we stop offering AMD-based solutions under the Alienware name in the near future."

2) "You know, we never realized how competitive AMD-based solutions can be until we acquired Alienware and saw the insides of their operations. We can continue to offer Celeron-based solutions in our low-end systems for a couple of years if you like, but we really no longer have any need for the faster Intel chips and plan to migrate Dell's entire line of mid-range and high-end systems to AMD over the next year. Well...unless you give us an additional 2% discount across the board on Intel CPUs for the next three years, that is."

"But what about those ultra-portables?" you might say. As far as most people are concerned, AMD really hasn't broken into the notebook market yet, if only because "Centrino" sounds a lot cuter for tiny laptop computers than "Athlon 64 M" or "Sempron." It's also worth noting that most people I know, including myself, are under the impression that Intel makes more battery-efficient mobile CPUs than AMD.

If AMD sees Dell as a way to really break into the notebook market (in particular, the ultra-portable market with its higher price tags and probably higher margins), they no doubt will focus more effort toward lowering power consumption in their mobile processors. They've already made the Opteron run cool (compared to competitive Intel chips, at least), so they might know of some tricks that they just haven't adapted to their mobile line.

So while Dell may not be able to court AMD directly, purchasing Alienware is a surefire way to avoid direct confrontation with Intel while testing the waters for a later migration to (or, at least, addition of) AMD CPUs in Dell's own product line.

Jonathan R. DeMallie, A AAAAmerican said...

www.rahulsood.com is correct.

DELL may be having a moment in history of thumbing there nose at All Americans ..and we do not like it at all.

Having a simple word and freedom called CHOICE is what sets us apart.

Did not the Internet start from this freedom of it...

Phone Freaks united... and look what happened...

I have as well written to DELL and never to date gotten anything back from them.

We had bought Thousands of Dollars yearly ...

With AMD doing a real Dual Core in one chip not two chips next to each other and calling it Dual Core... people like to play with words and TRY to Get Over on the Consumer...
DUH.. The Consumer has gotten Smart now ..more education, street wise, Internet Wise..etc...

DELL still really does not Sell and or Advertise the AMD (Superior) Products..

DId not the First Supermarket GIANT sell Kellog Corn Flakes and POST too..
Different brands of raisen bran...

Different types of Egg Nog at Christmas?...

DELL keps INTEL and are they kidding me? Peaople want a choice and they will still buy from DELL if they offer this for sale.. Otherwise to the Consumer to buy what they want ..will go to the other sellers like HP.. sales did not pick up that much just from selling more printer inks.... DUH...

DELL get off your POMPUS Dell and deliver to sell what people want..

Otherwise more and more peoiple are going to be making tons of money SHORT SELLING the DELL stock now more than before and WIN.

http://www.AAAAmerican.Com

Anonymous said...

Personally I think IF Dell buys alienware (which i hope they dont) they should just buy it and leave it alone, Alienware is the pinnalce of gaming PC's. The people at dell would be fools to mess around with it when its already doing so well.

And I have a dell (sadly) and all i can say is its horrible, Dell has designed cheap, easy to manufacture computers to sell to the buyer who thinks who wants a modern computer for the least money.

And you ask why would Dell do this? To squash competition OR to put a little extra money in their pockets, to have alienware continue, with Dell over seeing everything and reaping the benefits of having the best gaming PC's in their branch.

Anonymous said...

The Dell XPS Renegade is available now! Visit www.dell.com/renegade... there are not very many of these systems, and yes Dell is offering a warranty on an OVERCLOCKED Cpu!

Anonymous said...

hey guys guess what Alienware is being bought by Dell, here the email the head honcho sent us !!!

To All Alienware Worldwide Employees:



I would like to congratulate all of you for doing an excellent job in taking our company where it is today. It has been 10 years since Alex and I embarked on our dream to create a company totally committed to the things we love: science fiction, gaming, being creative and, most of all, PCs. Each of you plays an important role that has helped Alienware strive to become one of the premium PC manufacturers in the world. Since 1996, our success has been such that we have developed an enviable customer following, as well as the respect of industry analysts and the media who have acknowledged the growing power of our unique brand. And in the spirit of extending the reach and appeal of the Alienware brand, I am proud to announce that Alienware has agreed to be acquired by Dell.



As managers in the company, it is important that you understand the logic and rationale of this acquisition announcement so that you can properly communicate it to your respective staffs. It will come as no surprise to many of you that Alex and I have had the highest level of respect and admiration for Dell since Alienware is committed to the virtues and efficiencies of the direct business model since its inception. We have similar employee cultures --- we both employ individuals who are passionate and like to win. But we also recognize that the Alienware and Dell brands are separate and unique and must be managed separately so that we don’t dilute the key tenets, value proposition and “personality” of our respective brands. This acquisition is a logical progression for Alienware as we continue to grow within the PC industry. It will provide us with the capability of leveraging Dell’s world class business practices and efficiencies without compromising the hallmarks of the Alienware brand and product strategy.



Here are the three vital messages that you should take away from today’s announcement:



Ø Alienware will operate as a standalone division of Dell. The management and founders of Alienware will continue to operate the company as a standalone unit of Dell.

Ø Alienware will retain its name, brand and product portfolio separate from Dell.

Ø Alienware will maintain its own product development activities, brand/product marketing, manufacturing, sales and technical support operations and brand under the same management.



Undoubtedly, there will be a seemingly endless list of questions you and your teams will have regarding today’s announcement. The most important fact to recognize is that our name, facility, staff, manufacturing and procedures we currently have will remain the same. All existing business practices currently remain the same. The only real difference is that I will report directly to Jim Schneider, Dell’s Chief Financial Officer, but all Alienware employees and directors still to report to their respective VPs and managers. It’s really business as usual after today’s announcement.



Today’s announcement will obviously generate a significant amount of inquires from the media as well as our current business partners and suppliers. Because we don’t want Alienware employees misquoted on today’s announcement, I ask each you to pay special attention to any incoming inquiries from the press --- phone or e-mail --- and direct them to Mark Vena and Winnie Wong for handling and follow up. Dell is handling the communications of this announcement with our major vendors and suppliers such as Intel, AMD, NVIDIA and Microsoft.



I’m also excited to announce as well that we are arranging an Alienware All Employee Town Hall Meeting with me, Michael Dell and Kevin Rollins on Wednesday, March 29th. It will be held in the manufacturing facility at our Miami headquarters and it will be broadcast live via the Web so that our employees in EMEA and Costa Rica can participate. Employees will have the opportunity to ask questions. Details on this event and the Webcast will be communicated within the next days.



Thank you for your dedication and hard work that created this opportunity for Alienware to attain this milestone. Together we will continue reaching for the stars!

Regards,



Nelson Gonzalez

Chief Executive Officer



Alienware Corporation

Phone:
305.251.9797

Fax:
786.388.5719

www.alienware.com

RotoSequence said...

The deal is indeed done, confirmed on both Dell and Alienware's sites.

biggsunnyd said...

Looks like Rahul was right, and I had also agreed on what he had said, its plain and simple. Some alienware owners are getting heated but its true now, I bet there banging there heads on their Alienware PC's

Anti-HammerHead said...

Yes! Dell and Alienware! Looks like Rahul was right.

Just you wait guys! The Video Array - Alienware's multi graphic card system that Nelson Gonzalez said was going to be released in 2004, is coming, just you wait! Yeah, it was suposed to be hear before SLI, and before Crossifre, but Alienware has been using their otherworldy knowledge and powers to make a super-duper graphics card experience.

http://www.alienware.com/alx_pages/main_content.aspx

Anonymous said...

Dell is still messing up!

I just tried to buy a high end, 2 Gig Duo Core E1505. I was just about to place the order when I checked out the Network card... 10/100 not 10/100/1000!

A high speed, very powerful machine with medium speed Network Card. what a waste. I didn't buy it!

Anonymous said...

Hi,

If you have a complaint about cars manufactured by Ford Motor Company
please post them here

Ford Motor Company

It will be viewed by a large audience

Anonymous said...

I have been a fan of Voodoo PCs for a long time. I am simply amazed and enthralled by your high-end products.

You are amazing to, Rahul. I mean, look where you got your company now, with HP's acquisition and everything. You have been truly successful. Well,, I think in order to be successful in anything, you must commit yourself and follow through.

However, I have a few comments and suggestions. First of all, Rahul, your high-end Voodoo laptops and desktops are simply way too expensive! Hell, I was comparing Alieware's Area-51 ALX desktop with your respective voodoo desktop, and it turns out to be that Voodoo comes with a hefty price tag!
Alienware was even better, since they offer 4 TERABYTES of hard disk space (while Voodoo offers a little less), not to mention that it has the world's first desktop to contain the Ageia PhysX™ processor. Its price range was from $ 6,000 to $ 7,000, while your Vooodoo was almost $ 13,000 !!! (I customized your Voodoo to match the Aurora ALX's specs)
On the other hand, Dell has blown my mind away with its new XPS 720 H2C! Did you see its specs? They are AMAZING, all under the DELL brand, which means more support and better service.
Rahul, why is there no Voodoo support in the Middle East? This will make any customer exasperated if his brand new Voodoo breaks down, where on earth is he going to get support and service?

Looking forward to hearing from you,
Gamer