Micron plans federal PC leasing, disposal deal

SUN VALLEY, Idaho—Seat management features will be part of new lease arrangements
that Micron Electronics Inc. will propose to the General Services Administration within
the next two weeks.

The Nampa, Idaho, PC maker is one of several vendors rushing to add lease arrangements
to its GSA Information Technology Schedule contracts and blanket purchasing agreements.
But Micron’s lease deal, if approved, would also offer federal users trade-in
rebates, technical refreshment and free, environmentally safe disposal of old equipment
under its new mPower program.

“Government trade-ins have always had problems about security and asset
control,” said Harry B. Heisler, vice president and general manager of Micron’s
newly reorganized public-sector operation and a former executive at Government Technology
Services Inc. of Chantilly, Va. “They have not been successful at managing

Heisler said he hopes that will change, because GSA “has reinvented itself
amazingly and will look hard where it once wouldn’t” at commercial programs that
help users dispose of outdated hardware while recapturing part of the value.

Under the mPower terms, Pentium and other fairly recent PCs from 14 makers would bring
a trade-in rebate equal to their wholesale value. Although 486 and older PCs have no
wholesale value, Micron would offer some rebate value anyhow plus pay part of the shipping
cost and all of the disposal cost.

MPower, along with the TechRefresh lease and the AdvanceDeploy guarantee that servers
and clients are ready for next year’s Microsoft Windows NT 5.0 release, are all early
moves in Micron’s plan to expand its direct-sales model to medium-sized organizations
that want to specify, refresh and dispose of their computer equipment on a chosen

Micron is aligning its strategy around NT 5.0 because buyers now request NT 4.0
installed on up to 50 percent of desktop systems and 25 percent of notebooks ordered.
Company chairman and president Joel J. Kocher said he expects workstations running NT to
become the next big replacement market.

“It won’t be long until everybody uses NT 5.0,” Kocher said.
“Microsoft will put more juice behind it than it did behind Windows 98.”

Company officials said Windows 98 is overwhelmingly the operating system chosen for
systems it builds now, although Windows 95 is still available. They cited user concern
about year 2000 readiness as a reason for Win98’s rapid adoption.

Of the PCs the company sells, about 15 are percent notebooks, 6 percent are servers and
the rest are desktop systems.

Kocher said Micron will take “barely, just-in-time” delivery of components to
a newly designed plant that will store little or no inventory. Prices and configurations
will change daily, based on customer interactions with a new Web electronic commerce site
that will go up late this year.

Micron will install Microsoft Site Server to manage transactions on the redesigned
buying site. Federal buyers will use configurators, or price calculators, for each of the
company’s BPAs. 


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