On Monday, Jason Perlow at Tech Broiler wrote about a $16,000 PC we had built, which has recently been making its way around blog headlines. He commented that “Extreme PCs” are no longer relevant, and asked his readers whether these types of PCs, along with build-your-own homebrew PCs were going extinct. It's been interesting to read through the reader comments, and I wanted to add some perspective of my own.
Jason graciously posted my response on his blog, but I wanted to post it here as well, because I think it is something you would find interesting! The main premise here is that most people do not NEED to be on the bleeding edge of computer hardware, especially now that technology has reached the point at which even a cheap computer will meet most needs. With these thoughts, I entirely agree. As a system builder, we've known this for years, and if you ask any of our customers, they'll tell you that we recommend ways to cut back and save money far more freely than we suggest upgrades. But most people want more than they need, and people are used to getting what they want. I personally feel that this economy is a healthy reset to these past trends of excess. Many people don't need a high end video card, just like many people don't need that 5 bedroom house. Add to this the fact that for the first time in a long while, Microsoft appears to be releasing a LESS bloated OS than the previous version, and we see the collapse of a computer hardware bubble.
Of course, I can only speak with certainty about what we're seeing at Puget Systems, but this is indeed what we're seeing. People who used to buy $3000 computers are now buying $1200 computers. People who used to buy $1200 are now going to Costco. But what about people/organizations who buy $5,000+ computers? For us, they're still going strong. Why is that?
The difference is that those customers are not buying to meet their desires. They're buying to meet their needs...real needs. One of the biggest false assumptions being made about our $16,000 PC is that this is something we are trying to market to the masses. We'd be crazy to do that. This $16,000 PC was purchased for a specific application, for a specific reason – to make money. We see this all the time. If a video editor needs to be able to render his program in a short window of time, then faster hardware buys him that ability. If a university can improve its fluid dynamics simulations by a factor of 100x with an expensive computer, that could be a positive investment. These are not gamers, or people sitting at home with money to burn. These are people with real needs that need to be met. These types of “Extreme PCs” are not going away. In fact, we're personally seeing demand increase. Why? Because while many of the other system builders out there are following the crowd trying to compete with $500 Costco machines, we're going the other way. And we're emerging as one of the few system builders competent to handle the job.
But what about lower cost computers? I am not saying that system builders are fighting a losing battle against Costco machines. While it is certainly a shrinking market, it will reach a new equilibrium. Building a quality PC does not mean building an obscenely expensive PC. Jason says he now buys his computers from Costco, but if you read about his experience, it was riddled with frustration. There are many that have no tolerance for those frustrations. For the same reason one would buy a BMW car, people will continue to buy quality machines – a quality you will not find at Costco. This kind of quality will only be found by tailoring the PC to the individual, which will be done through build-your-own homebrews, or through smaller system builders. Jason is absolutely correct that there is no place for ridiculous products where we're headed. The hype in the computer industry is collapsing under its own weight, and its about time. The future is about performance for the dollar, reliability, low power, low noise...and I can't wait. We've been singing that song for years.