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Dell

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Dell Inc. (Nasdaq: DELL SEHK: 4331), an American computer-hardware 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.

Dell Inc
Company typePublic (Nasdaq: DELL SEHK: 4331)
IndustryComputer hardware
FoundedAustin, Texas (1984) (as "PC's Limited" [sic])
HeadquartersRound Rock, Texas, United States
Key people
Michael Dell, Founder & Chairman
Kevin Rollins, President & CEO
James Schneider, CFO
ProductsDesktops
Servers
Laptops
Peripherals
Printers
RevenueIncrease$55.908 Billion USD (2006)
5,771,000,000 United States dollar (2022) Edit this on Wikidata
Increase$3.572 Billion USD (2006)
(6.39% profit margin)
Number of employees
65,200
Websitewww.dell.com
This article discusses the corporation Dell, Inc. For other Dells, see Dell (disambiguation)

History

File:MichaelDell.jpg
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.""

Technical information

Products

 
A typical Dell-based home user workstation.
File:Inspn 8500.jpg
A Dell Inspiron consumer laptop PC. Template:Replacethisimage

Scope and brands

The corporation markets specific brand names to different consumer segments. It typically sells the OptiPlex, Latitude, and Precision names to medium-sized and large business customers, where the company's advertising emphasizes long life-cycles, reliability and serviceability. The Dimension, Inspiron, and XPS brands have an orientation towards consumers, students, and small home office environments, emphasizing value, performance and expandability. Dell recently re-introduced the Dell XPS brand to target the lucrative gaming market. XPS desktop systems use silver rather than the black cases found on newer Dell PCs. Dell has also expanded into non-computer products, including USB keydrives, LCD televisions, Windows Mobile-powered PDAs, and printers.

Dell uses several brand-names for its product ranges, including:

Dell currently ships Microsoft Windows XP as the default operating system for most of its new computers but also offers Red Hat and SUSE for servers as well as "bare-bones" computers without pre-installed software (N series by default and XPS as well as Inspiron notebooks upon request) at significantly lower prices. Due to Dell's licensing contract with Microsoft, Dell cannot offer those systems on their website and customers have to request them explicitly. Dell has to ship such systems with a FreeDOS disk included in the box and must issue a so-called "Windows refund" or a merchandise credit after sale of the system at the "regular" retail price.

When pre-installing Microsoft Windows operating systems on it machines, Dell bundles a large quantity of software. Some have accused Dell of shipping spyware, specifically Myway Search Assistant and claim that its technical support team have instructions not to support its de-installation, others deny this charge.[citation needed] Although the Dell Support Forum provided instructions for removing this software,[2] they seemed unnecessarily complicated. One could not uninstall the software completely using only the Microsoft Windows "Add or Remove Programs" utility and had instead to rely on the Windows Installer CleanUp Utility to finish the job and remove the entry. This came about due to a misconfigured installer that did not de-list the software in add/remove programs list. Coupled with the fact the remove button would no longer appear it seemed downright nefarious, but Dell claims it has since rectified the situation and that new computers uninstall the program easily.

Dell has expressed willingness to offer Apple's new Intel version of the Mac OS X operating system to its customers, but to this point Apple has stated that the OS will only run on Macintosh machines, and will not agree to licensing Mac OS X to Dell.[3]

Manufacturing

Dell has a general policy of manufacturing its products close to their customers, but with many exceptions.[citation needed] Some claim that the assembly of most of their less-expensive desktop computers takes place in China.[citation needed] Others say that assembly for desktop computers for the North American market takes place at Dell plants in Nashville, Tennessee in Austin, Texas and in [[Winston-Salem, North CLocal number portability (LNP) is the ability to take an existing fixed-line telephone number assigned by a local exchange carrier (LEC) and reassign it to another LEC, while referring to the same physical connection. FMNP (full mobile number portability) is the equivalent term for mobile phones. In the United States, mobile number portability is referred to simply as WNP or WLNP (Wireless LNP). LNP sometimes extends to providers other than LECs, such as internet phone companies.

Number portability became popular with the advent of mobile telephones, since in most countries different mobile operators are provided with different area codes and, without portability, changing one's operator would require changing one's number. Some operators, especially incumbent operators with large existing subscriber bases, have argued against portability on the grounds that providing this service incurs considerable overhead, while others argue that it prevents vendor lock-in and allows them to compete fairly on price and service. Due to this conflict of interest, number portability is usually mandated for all operators by telecommunications regulatory authorities. In the US, LNP was mandated by the FCC in 1997 with the First Report and Order on LNP and Number Pooling. The mandate required all carriers in the top 100 msas (metropolitan statistical areas) to be "LNP-capable" and port numbers to any carriers sending a BFR (bonafide request). The ability to keep a number while switching providers is thought to be attractive to consumers. It was also a major point made by CLECs (Competitive Local Exchange Carriers) preventing customers from leaving ILECs (Incumbent Line Exchange Carriers), thus hindering competition.

In the U.S., the Federal Communications Commission (FCC) has mandated this in order to increase competition among providers. As of late November 2

Support

Dell Inc routes technical support queries according to component-type and to the level of support purchased with a unit. Currently Dell offers four levels of customer support and encourages customers to educate themselves on the differences between these service types.

Dell Inc brands its current service agreement levels as:

  • Basic
  • Silver
  • Gold
  • Platinum Plus

A primary criticism of Dell's customer-support states that, because of the variety in service types available, the Dell system sometimes transfers customer calls several times between queues before reaching the appropriate department.

Though the service-agreements between its customers and Dell on the higher-level support agreements (Silver, Gold, and Platinum Plus) do not specifically state the guarantee of American agent technical support, Dell has opened up several new [call centers in the United States and Canada to begin handling enterprise class technical support requests.

Dell Inc maintains its primary support centers in the Americas at:

  • Round Rock, Texas
  • Oklahoma City, Oklahoma
  • Twin Falls, Idaho
  • Panama City, Panama

Additional contact centers in the Americas handle various tasks, including enterprise-logistics and sales to customers.

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 Local number portability (LNP) is the ability to take an existing fixed-line telephone number assigned by a local exchange carrier (LEC) and reassign it to another LEC, while referring to the same physical connection. FMNP (full mobile number portability) is the equivalent term for mobile phones. In the United States, mobile number portability is referred to simply as WNP or WLNP (Wireless LNP). LNP sometimes extends to providers other than LECs, such as internet phone companies.

Number portability became popular with the advent of mobile telephones, since in most countries different mobile operators are provided with different area codes and, without portability, changing one's operator would require changing one's number. Some operators, especially incumbent operators with large existing subscriber bases, have argued against portability on the grounds that providing this service incurs considerable overhead, while others argue that it prevents vendor lock-in and allows them to compete fairly on price and service. Due to this conflict of interest, number portability is usually mandated for all operators by telecommunications regulatory authorities. In the US, LNP was mandated by the FCC in 1997 with the First Report and Order on LNP and Number Pooling. The mandate required all carriers in the top 100 msas (metropolitan statistical areas) to be "LNP-capable" and port numbers to any carriers sending a BFR (bonafide request). The ability to keep a number while switching providers is thought to be attractive to consumers. It was also a major point made by CLECs (Competitive Local Exchange Carriers) preventing customers from leaving ILECs (Incumbent Line Exchange Carriers), thus hindering competition.

In the U.S., the Federal Communications Commission (FCC) has mandated this in order to increase competition among providers. As of late November 2

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.[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. [4]

 
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, and the advertised URL "www.dell.com/ftw" became defunct about two weeks after the ad ran.

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 Apple, Hewlett-Packard, Sun Microsystems, Gateway, Lenovo, Sony, Toshiba, and MDG Computers in Canada. Dell and its division, Alienware, compete in the enthusiast market against Apple, Falcon Northwest, Voodoo PC, 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 consumers a more attractive choice of personal computers and other equipment.

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.[1] On August 17 2006 Dell announced the use of AMD processors in their consumer desktop line.

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.[5] Friends and fellow webdesigners have since started a 'Help Paul Dell' campaign.[6] 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."

On August 14, 2006, Dell and Sony admitted to major flaws in several Sony-manufactured batteries that could result in the battery overheating and catching fire. As a result they recalled over 4.2 million laptop batteries in the largest computer-related recall to date. Dell and Sony will share the costs involved in this recall. In response to this, Japan's Ministry of Economy, Trade and Industry has ordered Dell and Sony to investigate the incidents that led to the recall, and to report their findings and future plans of prevention. If not, they could face charges involving fines under Japan's consumer-safety laws. Subsequent announcements by Apple, Lenovo, Toshiba and Fujitsu led to a recall of nearly 7 million Sony-manufactured batteries and "major embarrassment" for Sony[2].

Citations

References

Number portability became popular with the advent of mobile telephones, since in most countries different mobile operators are provided with different area codes and, without portability, changing one's operator would require changing one's number. Some operators, especially incumbent operators with large existing subscriber bases, have argued against portability on the grounds that providing this service incurs considerable overhead, while others argue that it prevents vendor lock-in and allows them to compete fairly on price and service. Due to this conflict of interest, number portability is usually mandated for all operators by telecommunications regulatory authorities. In the US, LNP was mandated by the FCC in 1997 with the First Report and Order on LNP and Number Pooling. The mandate required all carriers in the top 100 msas (metropolitan statistical areas) to be "LNP-capable" and port numbers to any carriers sending a BFR (bonafide request). The ability to keep a number while switching providers is thought to be attractive to consumers. It was also a major point made by CLECs (Competitive Local Exchange Carriers) preventing customers from leaving ILECs (Incumbent Line Exchange Carriers), thus hindering competition.

In the U.S., the Federal Communications Commission (FCC) has mandated this in order to increase competition among providers. As of late November 2

Notes

  1. ^ Lee, Louise (March 23, 2006). "Dell Goes High-end and Hip". BusinessWeek. {{cite news}}: Check date values in: |date= (help)
  2. ^ http://forums.us.dell.com/supportforums/board/message?board.id=si_virus&message.id=42328&c=us&l=en&cs=19&s=dhs
  3. ^ http://www.pcworld.com/article/121421-1/article.html
  4. ^ http://www.snopes.com/radiotv/tv/delldude.asp
  5. ^ http://www.theregister.co.uk/2005/01/26/dell_domain_dispute/
  6. ^ http://www.help-paul-dell.com/

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