With the personal computer industry facing a slowdown, school districts are finding that computer manufacturers are so eager for sales they are willing to discuss major price breaks–if the district can commit to large volumes of purchases.
A look at the largest such deal inked yet–between Hillsborough (Fla.) County Schools and Compaq Computer Corp.–shows the positives and negatives of these arrangements.
The deal: By dangling the offer of exclusive purchases for its 160,000 students, Hillsborough County got a five-year deal with Compaq Computer and several Compaq software partners, worth an estimated $50 million. Included in the deal are purchases of the computers for personal use by teachers, students, and their families at the same bulk-price rate.
The upside: Pentium III computers that retail for $1,150 are available to the school district, teachers, students, and parents for $850 each. Older, refurbished computers will be priced at $300 to $400. The deal will be updated quarterly to reflect Compaq’s latest models and pricing. Compaq also will donate one percent of sales to a special fund to buy refurbished machines for the county’s poorest families. Other benefits include the standardization of computers, software, and networks.
The downside: Exclusive deals lock out competitors, who may develop better machines or software. The deals also ratchet up commercialism at schools by giving the district’s imprint to a particular computer maker, a troubling trend.
The future: Computer makers say this arrangement is likely to be copied. Apple, IBM, and Gateway, for example, bid against Compaq for the Hillsborough deal. Representatives from IBM and Gateway said Hillsborough’s offer of exclusive purchasing made the arrangement unusually attractive.