Dell moves to address ‘trialware’ concerns

Dell on Tuesday became the first big computer maker to try to address customer frustration and anger over “trialware” – the often superfluous and frequently unwanted software that comes pre-installed on most PCs.

Michael Dell, chief executive, speaking in New York during the launch of a new range of PCs, dubbed Vostro, aimed at the small business market, acknowledged that many of Dell’s customers do not want the software loaded on to their new machines.

“Customers really hated trialware,” said Mr Dell, citing a recent survey of 1,800 small business owners in 12 countries which revealled that “eliminating trailware, sample software and freeware” was the number one priority for most small business customers.

Frank Muehleman, Dell’s vice-president of small/medium business, admited that the survey result was “a shock” and said Dell was considering giving consumers the choice of whether to buy PCs with or without trialware.

PC companies typically receive a small commission from software vendors if a consumer signs up for a full version of the software after testing it on a new machine. It often includes security software, toolbars and other utilities that can clog up a system and annoy users with frequent pop-up subscription reminders.

Analysts have estimated that revenues from this source can be as much as $10 or $20 a machine – a significant amount in an industry with paper-thin margins.

The move to eliminate trialware from the new range of small business laptop and desktop machines came as Mr Dell reiterated warnings that the company faces a long struggle to regain its lost momentum.

Mr Dell said was making “steady progress” in its turnround, but conceded that it had a “long way to go” in order to make up ground lost to its compeitors.

”We are making steady progress, but there is a lot to be done,” he said, citing expense management in particular as an area where the company needed to make improvements.

Dell, whose efficient supply chain and direct sales strategy propelled the computer maker to the top of the worldwide personal computer market in the early 2000s, has been struggling against falling margins and slowing sales growth for nearly two years.

Last year, it lost its number one position in the PC market to Hewlett-Packard, a longtime rival.

Shares of the company, which hit a high of $41.29 in mid-2005, had fallen by nearly half by the time Mr Dell replaced Kevin Rollins as chief executive in January in an attempt to turn the company around.

Since his return as chief, Mr Dell, has orchestrated a series of management changes and cost cuts designed to put the company back on track.

The company’s stock price has recovered in recent weeks after hitting a low of $21.79 in March, helped by a better-than-expected quarter last quarter. The shares slipped 1.2 per cent yesterday to $28.6.