Micron unveils new strategy, products

SUN VALLEY, Idaho— Joel Kocher, chairman and chief executive officer of Micron Electronics Inc., said last week that a new management team with a new strategy and new products has the Idaho manufacturer of computers back on course after five stalled quarters.

Figuring prominently in the new plans are a focus on organizations with fewer than 1,000 employees; leveraging cost savings of low inventories associated with the direct-sales business model; and capitalizing on the company's strong position in providing Microsoft Corp. Windows NT systems.

Harry Heisler, vice president and general manager of Micron's Government Systems Division, said his organization has accounted for nearly 25 percent of Micron's business and will be a key part of the new corporate strategy.

"In a little over three years, Micron has built a government business of more than $300 million annually," said Heisler, who joined Micron in early June after more than 15 years in the government market, most recently at Government Technology Services Inc. "We intend to build on that foundation with a serious sales and marketing effort, and I expect there will be a serious uptick in Micron's numbers next year."

Micron changed its pricing model at the end of May, cutting prices to more competitive levels. And in one of the first applications of the new model, the company won one of the Air Force's blanket purchase agreements to supplement a dissolving Desktop V contract.

Micron, the third largest direct manufacturer of PCs, wants to be a part of the government's transition to Windows NT. "The federal government is the largest Unix enterprise on Earth, and it is vigorously moving to NT," Heisler said. "Already nearly 25 percent of our notebooks and more than 50 percent of our desktops are shipped with Windows NT at our customers' request."

To further encourage buyers who are waiting for NT to get their hardware, Micron is establishing an Advance Deploy program, which offers software, support and systems pre-configured with Windows NT 5.0 beta operating systems. Heisler already has identified a half-dozen federal organizations as prospects to participate in the program and to test Windows NT 5.0 beta software. For the others, systems will be shipped with NT 4.0 but configured to accommodate 5.0 easily when it is released next year.

Micron also announced a PC life-cycle management program called Mpower, which permits customers to trade in old PCs from any vendor for rebates on new Micron computers; upgrade current Micron systems to new computers with trade-in rebates; sign up for new leasing options; and participate in a recycling program that will dispose of old PCs at little or no cost to the customer.

Heisler said the new program will be offered to government customers, but he added that regulations about disposing of government equipment may make it difficult for some agencies to use it on any large scale.

Initial reaction from market analysts to the new corporate management team and strategy was positive. "Micron has assembled a world-class team," said Tim Bajarin, president of Creative Strategies, a Campbell, Calif., market research firm.

"These are guys who fought the wars before and won," Bajarin said. "That alone will help Micron be competitive. They are also great in technology deployment. And these guys are fierce competitors. While Dell will clearly not be unseated any time soon, word of mouth will give [Micron] a chance to make considerable progress within the next six months if they can show government accounts that they can deliver."

Heisler echoed the same theme. "All I can say is that times have changed," he said. "There is a new sheriff in town, and some folks who have been unchallenged will begin hearing footsteps behind them."

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