Dell

Dell Inc
Company type	Public (Nasdaq: DELL SEHK: 4331)
Industry	Computer hardware
Founded	Austin, Texas (1984) (as "PC's Limited" [sic])
Headquarters	Round Rock, Texas, United States
Key people	Michael Dell, Founder & Chairman ; Kevin Rollins, President & CEO; James Schneider, CFO
Products	Desktops; Servers; Notebooks; Peripherals; Printers
Revenue	$55.908 Billion USD (2006)
Operating income	5,771,000,000 United States dollar (2022)
Net income	$3.572 Billion USD (2006) ; (6.39% profit margin)
Number of employees	65,200
Subsidiaries	Alienware
Website	www.dell.com

Dell Inc. (Nasdaq: DELL SEHK: 4331), an American computer-hardware Dell computers suck the big one company based in Round Rock, Texas, develops, manufactures, sells and supports a wide range of personal computers, servers, data storage devices, network switches, personal digital assistants (PDAs), software, computer peripherals, and more. As of 2006 Dell employs more than 63,700 people worldwide and manufactures more computers than any other organization in the world. According to the Fortune 500 2006 list, Dell ranks as the 25th-largest company in the United States by revenue. In 2006, Fortune magazine ranked Dell as No. 8 on its annual list of the most-admired companies in the United States.

This article discusses the corporation Dell, Inc. For other Dells, see Dell (disambiguation)

History

Michael Dell, the founder and chairman of Dell.

Michael Dell, while still a student at the University of Texas at Austin in 1984, founded the company as PC's Limited [sic] with just $1000. From his on-campus dorm room at Jester Center, the startup aimed to sell IBM-compatible computers built from stock components. Michael Dell started trading in the belief that by selling personal computer systems directly to customers, PC's Limited could better understand customers' needs and provide the most effective computing solutions to meet those needs.

In 1985, the company produced the first computer of its own design (the "Turbo PC"), which contained an Intel 8088-compatible processor running at a speed of 8 MHz. It advertised the systems in national computer magazines for sale directly to consumers, and custom-assembled each ordered unit according to a selection of options. This offered buyers prices lower than those of retail brands, but with greater convenience than assembling the components themselves. Although not the first company to use this model, PC's Limited became one of the first to succeed with it. Michael Dell dropped out of school to run the business full-time. The company grossed more than $6 million in its first year.

In 1987, PC's Limited set up its first on-site-service programs in order to compensate for the lack of local retailers prepared to act as service centers. Also in 1987, the company set up its first operations in the United Kingdom; eleven more international operations followed within the next four years. In 1988, Dell's market capitalization grew by $30 million to $80 million on its initial public offering day. The company changed its name to "Dell Computer Corporation" in 1988.

In 1990, Dell Computer tried selling its products indirectly through warehouse clubs and computer superstores, but met with little success, and the company re-focused on its more successful direct-to-consumer sales model. In 1992, Fortune magazine included Dell Computer Corporation in its list of the world's 500 largest companies. In 1999, Dell overtook Compaq to become the largest seller of personal computers in the United States of America. To recognize the company's expansion beyond computers, the stockholders approved changing the company name to "Dell Inc." at the annual company meeting in 2003. In March 2004 Dell attempted to expand by tapping into the multimedia and home entertainment markets with the introduction of televisions, handhelds, and digital jukeboxes. Dell has also produced Dell-brand printers for home and small-office use. On December 22, 2004, the company announced that it would build a new assembly plant near Winston-Salem, North Carolina; the city and county provided Dell with $37.2 million in incentive packages; the state provided approximately $250 million in incentives and tax breaks.

In January 2005 the share of sales coming from international markets increased, as revealed in the company's press releases for the first two quarters of its fiscal 2005 year.

In February 2005, Dell appeared in first place in a ranking of the "Most Admired Companies" published by Fortune magazine.

In November 2005, BusinessWeek magazine published an article titled "It's Bad to Worse at Dell" about shortfalls in projected earnings and sales, with a worse-than-predicted third-quarter financial performance - a bad omen for a company that routinely underestimated its earnings. Dell acknowledged that faulty capacitors on the motherboards of the Optiplex GX270 and GX280 had already cost the company $300 million. Chief Executive Officer (CEO) Kevin Rollins attributed the bad performance partially to Dell's focus on low-end PCs.

On 23 March 2006, Dell purchased the computer hardware manufacturer Alienware. The plan envisaged Alienware continuing to operate independently under its existing management. Alienware expected to benefit from Dell's efficient manufacturing system.^[1]

Dell and AMD

On August 17, 2006, a Dell press-release stated that starting in September 2006, Dell Dimension desktop computers would have AMD processors and that later in the year Dell would release a two-socket, multi-processor server using AMD Opteron processors, moving away from using Dell's traditional Intel processors.

CNet's News.com on August 17 2006 cited Dell CEO Kevin Rollins as attributing the move to AMD processors to cost advantage and to AMD technology. AMD's senior VP in commercial business, Marty Seyer, stated: "Dell's wider embrace of AMD processor-based offerings is a win for Dell, for the industry and most importantly for Dell customers.""

On October 23, 2006, Dell announced two new AMD-based servers — the PowerEdge 6950 and the PowerEdge SC1435 — marking its entry into the AMD-based server market.

On November 1, 2006 Dell's website began offering notebooks with AMD processors (the Inspiron 1501 with a 15.4" display) with the choice of a single-core MK-36 processor, dual-core Turion X2 chips or Mobile Sempron.

Commercial aspects

Business model

Dell sells all its products both to consumers and corporate customers, using a direct-sales model via the Internet and the telephone network. Dell maintains a negative cash conversion cycle through use of this model: in other words, Dell Inc. receives payment for the products before it has to pay for the materials. The Internet has significantly enhanced Dell’s business model, making it easier for customers to contact Dell directly. Other computer manufacturers, including Gateway and Compaq, have attempted to adapt this same business model, but due to timing and/or retail-channel pressures they have not achieved the same results as Dell.

Organization

A Board of Directors of nine people runs the company. Both Michael Dell, the founder of the company, and Kevin Rollins, the CEO, serve on the board. Other board members include Donald Carty, William Gary, Judy Lewent, Klaus Luft, Alex Mandl, Michael A. Miles, and Sam Nunn. Shareholders elect the nine board members at meetings, and those board members who do not get a majority of votes must submit a resignation to the board, which will subsequently choose whether or not to accept the resignation. The board of directors usually sets up five committees which have oversight over specific matters. These committees include the Audit Committee, which handles accounting issues, including auditing and reporting; the Compensation Committee, which approves compensation for the CEO and other employees of the company; the Finance Committee, which handles financial matters such as proposing mergers and acquisitions; the Governance and Nominating Committee, which handles various corporate matters including nomination of the board; and the Antitrust Compliance Committee, which attempts to prevent company practices from violating antitrust laws.

The corporate structure and management of Dell extends beyond the board of directors. The Dell Global Executive Management Committee sets the strategic direction for how the corporation keeps customers at the forefront, from designing and manufacturing computer systems to offering products that meet customers' requirements to providing the sufficient service and support. Dell has regional senior vice presidents for countries other than the United States, including Paul Bell for EMEA and Stephen J. Felice for Asia/Japan. Other officers include Martin Garvin, senior vice president for worldwide procurement, and Susan E. Sheskey, vice president and chief information officer.

Marketing

File:LOGODELL.gif

Nameplate used on the bezels of many Dell computers, monitors, and printers

Dell advertisements have appeared in several types of media including television, the Internet, magazines, catalogs and newspapers. Some of Dell Inc's marketing strategies include lowering prices at all times of the year, offering free bonus products (such as Dell printers), and offering free shipping in order to encourage more sales and to stave off competitors. Recently, Dell became the lowest-price major computer-manufacturer in the United States.^{[citation needed]} To maintain its low prices, Dell continues to accept most purchases of its products via the Internet and through the telephone network, and to move its customer-care division to India and El Salvador.^{[citation needed]}

A popular United States television and print ad campaign in the early 2000s featured the actor Ben Curtis playing the part of "Steven", a lightly mischievous blond-haired kid who came to the assistance of bereft computer purchasers. Each television advertisement usually ended with Steven's catch-phrase: "Dude, you're gettin' a Dell!" Dell fired Curtis shortly after his arrest for marijuana possession in 2003 outside Central Park in New York City; however, Dell denies that the firing resulted from his arrest, stating that the "Steven" ads had run for three years and characterizing them as "stale". The Dell ads featuring Curtis had stopped playing before his arrest, thus lending credence to Dell's statement. ^[2]

Dell Direct Store, Brisbane, Australia

A subsequent advertising campaign featured interns at Dell headquarters (with Curtis' character appearing in a small cameo at the end of one of the first commercials in this particular campaign).

In the early 2000s Dell opened kiosk locations in shopping malls across the United States in order to give personal service to customers who preferred this channel to using the Internet or telephones. Despite the added expense, prices at the kiosks equalled or even undercut prices available on Dell's other retail channels. During 2005, Dell opened kiosk locations in shopping malls across Australia, and in 2006 opened kiosk locations in shopping malls across Canada, following the approach used in the United States.

A Dell advertising campaign for the XPS line of gaming computers featured in print in the September 2006 issue of Wired Magazine. It used as a tagline the common term in Internet and gamer slang: "FTW", meaning "For The Win". However, Dell Inc. soon dropped the campaign.

Dell Stores

On July 26 2006 Dell Inc opened a full store in Northpark Mall in Dallas, Texas. It planned to operate the 3,000-square-foot Dallas outlet seven days a week and to display about 36 models, including PCs and televisions. But customers cannot walk out of this store with products. Instead, they order online or by telephone from the store and await delivery. Dell Inc plans to use the Dallas store to house about three times as many products as it displays in more than 160 kiosks in malls and airports in the United States of America. In addition to showcasing products, the store also supports onsite warranties or non warranty service ("Dell on Call"). Services offerred include repairing computer video-cards and removing spyware from harddrives.

Competition

Dell's major competitors include IBM, Apple, Hewlett-Packard, Sun Microsystems, Gateway, Lenovo, Sony, and Toshiba. Dell and its division, Alienware, compete in the enthusiast market against Apple, Falcon Northwest, Voodoo PC (A division of HP), WidowPC and other manufacturers. In the second quarter of 2006, Dell had between 18% and 19% share of the worldwide personal-computer market, compared to Hewlett-Packard with roughly 15%. By leveraging its business model, Dell attempts to undercut competitors and offer customers a more attractive choice of personal computers and other equipment. Often times dell will actually buy competitor parts to incorporate into its own products in order to save signifacnt portions of money.

Dell recently lost its once-substantial lead in the PC business to HP. Both Gartner and IDC estimated that, in the third quarter of 2006, HP shipped more units worldwide than did Dell [1]. Dell's 3.6% growth paled in comparison to HP's 15% during the same period.

Criticism

Dell had a policy of only selling computers with Intel processors, and did not offer AMD-based systems until May 19, 2006, when Dell announced that they would offer servers based on AMD Opteron processors.[2] On August 17 2006 Dell announced the use of AMD processors in their consumer desktop line. On November 1, 2006 Dell's website began offering notebooks with AMD processors.

In October 2005, Dell filed a lawsuit in a Paris court to sue Menorca-based independent website designer Paul Dell for engaging in “parasitism and unfair competition”. This related to his company website 'DellWebsites'. Critics of Dell, Inc. have argued that Dell's "hounding" of Paul Dell has no justification, considering that the title of his enterprise merely reflects his family name.^[3] Friends and fellow webdesigners have since started a 'Help Paul Dell' campaign.^[4] The case continues.

In 2006 Dell acknowledged problems with customer service. Problems include transfers of more than 45% of calls and long wait-times. Dell's blog detailed the response: "We’re spending more than a $100 million — and a lot of blood, sweat and tears of talented people — to fix this." However, as of October 2006, the long wait-times persisted and improvement remained outstanding.^{[citation needed]} Average wait-times for Basic Server Support do average less than 3 minutes in the American market, and Dell's customer-satisfaction numbers have risen from a level of 65% in April of 2006 to an average of 79% in October of 2006^{[citation needed]}. On November 5th, 2006 Dell employees in the Nashville call center recieved an email from management that informed them to change their scripting for calls. Now they are supposed to say " Thank you for calling (insert Dell XPS hardware warranty support or Dell Gold technical support here), my name is (your name). How may I help you? ". Instead of first asking the customer Service Tag information and verifying everything, trying to first find out what problem the customer is having.

On August 14, 2006, Dell and Sony recalled over 4.2 million notebook batteries when flaws were discovered that could cause the Sony-manufactured batteries to overheat and catch fire. Subsequent announcements by almost every major laptop manufacturer in the world (including Apple, Lenovo, Toshiba, Hitachi and Fujitsu) led to a recall of nearly 9.6 million Sony-manufactured batteries and led Sony executives to apologize on October 24, 2006 for the inconvenience.[3]