Read Online Resolve and Fortitude : Microsoft's ''SECRET POWER BROKER'' breaks his silence by Joachim Kempin - Free Book Online Page A
Authors: Joachim Kempin
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Before I left Germany, MS changed direction, and we had to undo the agreement. The relationship setback was severe, but we managed to keep Siemens close.
The leading German PC manufacturer by volume was a much smaller company called Vobis. Her PCs, mostly manufactured in Germany, were sold through company-run PC stores. While mainly focused on the German market, Vobis had expanded into other European countries. This included opening a store in Paris on the famous Avenue des Champs-Élysées. Talk about an expensive ego!
The marketing campaigns Vobis concocted to increase showroom traffic were legendary. Her energetic CEO and co-owner, Theo Lieven, deserves credit for their success. Easily approachable, Theo was nevertheless a supertough and shrewd negotiator and quite a piece of work. In private he was an accomplished concert piano player and would later go on to found a piano institute from a Lake Como palazzo in Italy. The local press liked his outspoken and eccentric style. MS’s business with his company was dismal. He was DRI’s best customer and sold some PCs without any OS. MS Windows had wound up in his stores as a stand-alone product, but there was no chance to conclude an OEM deal for it. Our first meeting was uneventful beyond receiving yet another request for cheaper MS-DOS prices as a prerequisite to gain his business. He wanted me to slash our price to meet DRI’s offer. Not needing another Amstrad deal, I said “Thanks but no thanks” and departed.
My next conference with Manfred Schmitt from Escom was more productive. He had started a kind of Vobis clone company by opening his own PC stores. He had flirted with DRI a couple of times but was reconsidering his decision to better differentiate from Vobis and contemplated bundling Windows. We established a good rapport, but I came away with an uneasy sense of his integrity. The rivalry between the two companies and their vying owners nevertheless offered up an opportunity to play them against each other. I left Germany comfortable with having a solid team in place capable of handling the local situation well. A bit too optimistic as we will come to find out!
The concept of PC manufacturers opening company-run stores was unique. I questioned the profit model the two companies were using to justify what I considered a pretty bold adventure. Even after eliminating traditional distributors and retailers, they still had storefront and staffing costs. The generous margins in the early years supported this. But none of these stores was designed as destination stores or had unique merchandise like the ones Apple has built recently. In the end, hits to the German market from direct marketers like Dell and Gateway made profitability and, finally, survival tough. Vobis and Escom stayed alive longer than I had expected. The reason can be found in the Germanic reluctance to buy PCs by phone! Laugh all you like. Few Germans possessed credit cards and could not pay with check over the phone. Preferring to pay cash at retail, they enjoyed the instant gratification when taking their merchandise home then and there. The German soul ticked differently then and now.
Visiting a smaller company called Groupe Bull in France was blessedly without controversy. Her executives had long been Windows fans and supporters, but like other licensees, they were waiting for a better-performing version. Bull’s main sales went through large warehouse-type retailers like Carrefour. Like any other PC manufacturer in France, Bull’s team considered Apple the main competitor. French PC buyers with their entrenched avant-garde intellectualism were indeed superloyal Apple customers. Their way of life had blossomed with the appearance of the Mac. The French regarded themselves as artistic, just plain different, or more sophisticated than other Europeans. Snob appeal or not! Apple had successfully stroked their intellectual complexity, flattering their egos. Jean-Louis Gassée, Apple’s first
The leading German PC manufacturer by volume was a much smaller company called Vobis. Her PCs, mostly manufactured in Germany, were sold through company-run PC stores. While mainly focused on the German market, Vobis had expanded into other European countries. This included opening a store in Paris on the famous Avenue des Champs-Élysées. Talk about an expensive ego!
The marketing campaigns Vobis concocted to increase showroom traffic were legendary. Her energetic CEO and co-owner, Theo Lieven, deserves credit for their success. Easily approachable, Theo was nevertheless a supertough and shrewd negotiator and quite a piece of work. In private he was an accomplished concert piano player and would later go on to found a piano institute from a Lake Como palazzo in Italy. The local press liked his outspoken and eccentric style. MS’s business with his company was dismal. He was DRI’s best customer and sold some PCs without any OS. MS Windows had wound up in his stores as a stand-alone product, but there was no chance to conclude an OEM deal for it. Our first meeting was uneventful beyond receiving yet another request for cheaper MS-DOS prices as a prerequisite to gain his business. He wanted me to slash our price to meet DRI’s offer. Not needing another Amstrad deal, I said “Thanks but no thanks” and departed.
My next conference with Manfred Schmitt from Escom was more productive. He had started a kind of Vobis clone company by opening his own PC stores. He had flirted with DRI a couple of times but was reconsidering his decision to better differentiate from Vobis and contemplated bundling Windows. We established a good rapport, but I came away with an uneasy sense of his integrity. The rivalry between the two companies and their vying owners nevertheless offered up an opportunity to play them against each other. I left Germany comfortable with having a solid team in place capable of handling the local situation well. A bit too optimistic as we will come to find out!
The concept of PC manufacturers opening company-run stores was unique. I questioned the profit model the two companies were using to justify what I considered a pretty bold adventure. Even after eliminating traditional distributors and retailers, they still had storefront and staffing costs. The generous margins in the early years supported this. But none of these stores was designed as destination stores or had unique merchandise like the ones Apple has built recently. In the end, hits to the German market from direct marketers like Dell and Gateway made profitability and, finally, survival tough. Vobis and Escom stayed alive longer than I had expected. The reason can be found in the Germanic reluctance to buy PCs by phone! Laugh all you like. Few Germans possessed credit cards and could not pay with check over the phone. Preferring to pay cash at retail, they enjoyed the instant gratification when taking their merchandise home then and there. The German soul ticked differently then and now.
Visiting a smaller company called Groupe Bull in France was blessedly without controversy. Her executives had long been Windows fans and supporters, but like other licensees, they were waiting for a better-performing version. Bull’s main sales went through large warehouse-type retailers like Carrefour. Like any other PC manufacturer in France, Bull’s team considered Apple the main competitor. French PC buyers with their entrenched avant-garde intellectualism were indeed superloyal Apple customers. Their way of life had blossomed with the appearance of the Mac. The French regarded themselves as artistic, just plain different, or more sophisticated than other Europeans. Snob appeal or not! Apple had successfully stroked their intellectual complexity, flattering their egos. Jean-Louis Gassée, Apple’s first
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