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Rating Dell, Compaq, and Gateway's Online Pitches to Small Business
The prices are close, but the services aren't

Until recently, small companies were the computer industry's orphan market -- too big for consumer products, too small and poor for corporate offerings.

Suddenly, small businesses are a hot market, and PC makers can't do enough to sell fast, easily networked PCs adapted to small-business needs via the Web. Buyers get lower cost and convenience, but without dealers' hand-holding.

Business Week Online visited the Web sites of three of the biggest PC makers -- Compaq, Dell, and Gateway -- to find out if they really are making life easier for small-business computer shoppers. We compared each site's ease of use, its prices, and how it addresses the financial, technical, and service concerns of small businesses.

One note: Competition has made the tech giants hungrier. Compaq, a harbinger of discounts, last week announced price cuts of up to 7% on its small-business line. We found that most prices for comparable equipment (after the Compaq announcement) were within $100 of each other.

Here's our shopping list:

  • a midprice notebook
  • a customized desktop with extra RAM, a large monitor, and a digital video disk, or DVD, player
  • and a small network consisting of a low-cost server and three inexpensive desktops.

And, here are our findings:

Until November, Compaq lacked an online presence. A digital store was, after all, a threat to its thousands of dealers. But, as Dell continued to gobble up market share, Compaq splashed into cyberspace with a new line of computers, called Prosignia, geared for small business.

Ease of use: The Prosignia site ( is the simplest and fastest loading of the bunch. Technical jargon is minimal. Products are neatly arranged for comparison. And, best of all, there aren't too many choices -- just two main product divisions each for laptops, desktops, and servers.

The site's handiest feature is an online callback service. Click an icon labeled Call Me Now, type in your telephone number, and within seconds, a Compaq rep is ringing through to offer advice.

To shop, select a model from an easy-to-use catalog, and put it in your cart. It's also easy to add features: Pick an option -- more RAM or an oversize monitor -- and the site rejiggers the price. Unfortunately, there's little explanation for the uninitiated. What does a network card for $77 offer compared with one for $209? What's the purpose of a Zip drive? When we tried to put together a small networked system, nothing on the site alerted us that we needed a networking hub and cable to link the computers together.

As we neared the end of the spree, the site stopped registering the items in our shopping cart. A Compaq representative explained: "It happens every once in a while. I apologize for that one." A temporary glitch, no doubt. Still, how often do cash registers conk out at CompUSA stores? Then again, there are no lines in cyber-space.

Small-business savvy: Prosignia computers come loaded with Microsoft Office Small Business Edition, as well as system-maintenance and training software. Compaq's easy-to-follow leasing instructions include a calculator for estimating monthly payments. The company's maintenance options are another matter: Buried in the Add-ons section, they range from 60 minutes of one-to-one telephone help ($119) to three years of rapid-response on-site service ($1,100). But we couldn't find service-contract language anywhere nearby. A Compaq spokesperson said the full contract is available for inspection near the final stages of the buying process. Still, it would be nice to know exactly what you get in advance.

Dell is the granddaddy of online computer sales, and its main selling point is price.

Ease of use: Dell's site is rough in places -- too many images make it slow, for example. Yet, it has many strong features. Want to customize a desktop PC but don't consider yourself a tech expert? Click on the Help Me Choose icons. The site will walk you through a comparison of the costs and features of Windows 95, vs. Windows NT. A clever feature alerts the buyer when equipment and software are incompatible.

We also found Dell's toll-free-number representatives fairly helpful. The operator knew which hub we should use to link our small network. But he couldn't tell us where to find it online so we could add it to our costs. Once you make your choices, the payment and registration process is routine. As with Compaq, Dell presents a number of leasing options, all of which can be configured via an online calculator.

Small-business savvy: PCs come loaded with Microsoft Office Small Business Edition. The company offers three leasing options spelled out in basic language. On the other hand, we had a hard time buying extra maintenance for the desktops. We were given only the option of extending the standard one-year agreement (on-site service delivered the next business day) to three years. But few other possibilities seemed available. The service options became much more lavish, however, for servers.

The E-commerce revolution seems to have caught this veteran of direct mail and phone sales off guard. Its site is the least customer-friendly of the three.

Ease of use: Gateway's site offers little guidance for those who haven't made up their minds what to buy. Click on the page titled "Small Business Desktops," for instance, and you'll find a screen of specifications for four individual models. How do you know which one is best for you? There are few clues.

There were some glitches, as well. We found a notebook for $2,299. Another click showed the same equipment cost $2,199. We didn't know which price was valid until the purchasing process started four screens later. A service representative called the discrepancy a "typo." Indeed, the price was corrected on the site the next day.

There's a toll-free help line. But when we clicked the option of having a Gateway rep call us, to our surprise, an on-screen message said we would get a call or E-mail within 24 hours! In that time, we would probably have called a competitor and had the system on our front doorstep.

Another frustration: Gateway has no shopping-cart function. That means you have to pay for each item individually. Want to buy a printer, a notebook, and a new server? You'll fill out three sets of ordering and billing forms. The toll-free number rep confirmed: "You'll have to do it separately."

Small-business savvy: All Gateway computers come with Microsoft Office Small Business Edition preinstalled. One odd note was the site's prominent display of Multimedia PCs, whose game-playing capacities aren't vital for businesses. On the other hand, there is a nice array of service and financing options. Entrepreneurs might be attracted to Gateway's 90-day same-as-cash plan: No payment is due for three months. Pay in full before 90 days, and avoid a finance charge.

Also, the toll-free rep was very helpful, to the point of saying it would probably be better to buy networking cable in bulk from a local retailer. That sort of candor wins customers. Too bad we can't say the same for the Web site.

See the attached table for a comparison of the companies' equipment prices.

By Dennis Berman in New York

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See Comparative Price Table

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