Nick Carr writes about Dell's recent troubles, but avoids discussion about the long tail effect - perhaps because he's come out so strongly against it in the past. The basic problem:

I think that that's exactly what's been happening in the PC world. As PC prices have plummeted, thanks to cheaper components and ever more automated manufacturing, support costs have not fallen in tandem. Yes, you can get economies of scale in support and you can automate certain tasks, but in the end there's a heavy labor component to support that sets a floor for costs: customers need to be able to talk to a human being when they have questions or problems. Dell tested that floor recently, and it got burned by customer-support problems, so now it's having to reinvest on the support side of its business even as it continues to slash prices to hold onto market share. (In its last quarterly financial statement, Dell noted, "We have increased our headcount not only to accommodate our global growth but to also improve our customer experience ." [italics added]) That's a painful position to be in - and I think we can see that pain in Dell's recent financial announcements.

And how do you suppose that the word of mouth on the bad customer support problem spread, hmm? Perhaps it was Jeff Jarvis and the angry people behind him? You know, the ones Nick thinks should sit down and shut up? I think Carr needs to remove his blinkers and start paying closer attention to the Long Tail...

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