History of Dell: Difference between revisions
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#REDIRECT [[Dell#History]] |
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{{In use|time=17:09, 22 November 2021 (UTC)}} |
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{{update|date=January 2018}} |
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{{About|the history of the Dell Computer Corporation|the history after the 2016 merger with EMC|Dell Technologies}} |
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This article contains an overview of the '''history of Dell'''. |
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{{R from merge}} |
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==Background== |
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[[File:Michael Dell (6211618173).jpg|thumb|Michael Dell (Founder)]] |
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===Founding and Startup=== |
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[[Michael Dell]] founded [[Dell|Dell Computer Corporation]], [[Doing business as|doing business as]] ''PCs Limited,'' <ref>{{cite web| title = Michael Dell with an early model of a PC's Limited computer| url = http://pinterest.com/pin/208643395206891882/| access-date = 3 Sep 2013| archive-url = https://web.archive.org/web/20131022035906/http://www.pinterest.com/pin/208643395206891882/| archive-date = 22 October 2013| url-status = dead}}</ref> in 1984 while a student at the [[University of Texas at Austin]].<ref>{{cite book | last = Dell | first = Michael | authorlink = Michael Dell |author2=Catherine Fredman | title = Direct from Dell | url = https://archive.org/details/directfromdellst00dell | url-access = registration | publisher = [[HarperCollins]] | year= 1999 | page = [https://archive.org/details/directfromdellst00dell/page/13 13] | isbn = 0-88730-914-3 }}</ref> Operating from Michael Dell's off-campus dormitory room at [[Dobie Center]],<ref>{{Cite web|url=http://www.Dell.com/downloads/global/corporate/speeches/msd/2003_05_17_msd_commencement.pdf|title = Computers, Monitors & Technology Solutions | Dell USA}}</ref> the [[startup company|startup]] aimed to sell [[IBM PC compatible|IBM PC-compatible]] computers built from stock components. Michael Dell started trading in the belief that by selling personal computer systems directly to customers, PCs Limited could better understand customers' needs and provide the most effective computing solutions to meet those needs.<ref>{{cite web|url=http://www.aajads.com/listings/dell-inspiron-n5010-15-6-laptop-pc-core-i5/ |title=Dell | Dell |publisher=aajads.com |date=2018-11-12 |access-date=2018-11-12}}</ref> Michael Dell dropped out of college upon completion of his freshman year at the University of Texas at Austin in order to focus full-time on his fledgling business, after getting about $1,000 in expansion-capital from his family<ref name="delltimeline">{{cite web |title=Our Timeline |url=https://corporate.delltechnologies.com/en-us/about-us/who-we-are/timeline.htm |website=Dell Technologies |access-date=22 November 2021}}</ref>. As of April 2021, Michael Dell's net worth was estimated to be over $50 billion.<ref>{{cite web |last1=Stupples |first1=Benjamin |title=Michael Dell’s Fortune Soars to $51 Billion With Spinoff |year=2021 |url=https://www.bloomberg.com/news/articles/2021-04-15/michael-dell-s-fortune-surges-to-52-billion-with-spinoff-plan |website=Bloomberg |access-date=22 November 2021}}</ref> |
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In 1985, the company produced the first computer of its own design — the "Turbo PC", sold for US$795<ref>{{Cite book |last=Koehn |first=Nancy Fowler |title=Brand New: How Entrepreneurs Earned Consumers' Trust from Wedgwood to Dell |publisher=[[Harvard Business Press]] |year=2001 |isbn=978-1-57851-221-8 |page=287 |url=https://books.google.com/books?id=7j8VefeqUk4C |access-date=2008-10-14}}</ref><ref>{{cite web |last1=Edwards |first1=Benj |title=The Golden Age of Dell Computers |url=https://www.pcmag.com/news/the-golden-age-of-dell-computers |year=2017 |website=PC Magazine |access-date=22 November 2021}}</ref> — containing an [[Intel 8088]]-compatible processor running at a speed of 8 MHz. PCs Limited 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 business model, PCs Limited became one of the first to succeed with it. The company grossed more than $73 million in its first year of trading. |
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The company dropped the ''PC's Limited'' name in 1987 to become Dell Computer Corporation and began expanding globally. At the time, the reasoning was this new company name better reflected its presence in the business market, as well as resolved issues with the use of “[[Limited company|Limited]]” in a company name in certain countries.<ref name="ferrell198708">{{cite news | url=https://archive.org/stream/1987-08-compute-magazine/Compute_Issue_087_1987_Aug#page/n15/mode/2up | title=CES And Comdex: A Tale Of Two Cities | work=Compute! | date=August 1987 | access-date=10 November 2013 | author=Ferrell, Keith | page=14}}</ref> The company set up its first international operations in [[United Kingdom|Britain]]; eleven more followed within the next four years. In June 1988, Dell Computer's market capitalization grew by $30 million to $80 million from its June 22 [[initial public offering]] of 3.5 million shares at $8.50 a share.<ref>[http://www.Dell.com/content/topics/global.aspx/corp/investor/en/faqs?c=us&l=en&s=corp Frequently Asked Questions] {{webarchive|url=https://web.archive.org/web/20090105181347/http://www.dell.com/content/topics/global.aspx/corp/investor/en/faqs?c=us&l=en&s=corp |date=January 5, 2009 }}</ref> In 1989, Dell Computer set up its first on-site service programs in order to compensate for the lack of local retailers prepared to act as service centers. |
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===Growth in the 1990s and early 2000s=== |
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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)|Fortune magazine]]'' included Dell Computer Corporation in its list of the world's [[Fortune Global 500|500]] largest companies, making Michael Dell the youngest CEO of a Fortune 500 company at that time. |
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In 1993, to complement its own direct sales channel, Dell planned to sell PCs at big-box retail outlets such as [[Wal-Mart]], which would have brought in an additional $125 million in annual revenue. [[Bain Capital|Bain]] consultant [[Kevin Rollins]] persuaded Michael Dell to pull out of these deals, believing they would be money losers in the long run.<ref>{{cite news|last=Rivlin |first=Gary |url=https://www.nytimes.com/2005/09/11/technology/11dell.html |title=He Naps. He Sings. And He Isn't Michael Dell. |work=The New York Times |date=September 11, 2005 |access-date=October 30, 2012}}</ref> Margins at retail were thin at best and Dell left the reseller channel in 1994.<ref name="mhhe.com">{{cite web|url=http://www.mhhe.com/business/management/updates/thompson12e/case/dell3.html |title=Dell Computer Corporation Online Case |publisher=Mhhe.com |date=January 30, 1994 |access-date=January 9, 2014}}</ref> Rollins would soon join Dell full-time and eventually become the company President and CEO. |
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Originally, Dell did not emphasize the consumer market, due to the higher costs and low profit margins in selling to individuals and households; this changed when the company's Internet site took off in 1996 and 1997.<ref name="delltimeline" /> While the industry's average selling price to individuals was going down, Dell's was going up, as second- and third-time computer buyers who wanted powerful computers with multiple features and did not need much technical support were choosing Dell. Dell found an opportunity among PC-savvy individuals who liked the convenience of buying direct, customizing their PC to their means, and having it delivered in days. In early 1997, Dell created an internal sales and marketing group dedicated to serving the home market and introduced a product line designed especially for individual users.<ref name="mhhe.com"/> |
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From 1997 to 2004, Dell steadily grew and it gained market share from competitors even during industry slumps. During the same period, rival PC vendors such as [[Compaq]], [[Gateway, Inc.|Gateway]], [[IBM Aptiva|IBM]], [[Packard Bell]], and [[AST Research]] struggled and eventually left the market or were bought out.<ref name="ZDA">ZDNET Asia: [http://www.zdnetasia.com/michael-dell-back-as-ceo-rollins-resigns-61986298.htm Michael Dell back as CEO] February 1, 2007. Visited: April 10, 2012 {{webarchive|url=https://web.archive.org/web/20100611213001/http://www.zdnetasia.com/michael-dell-back-as-ceo-rollins-resigns-61986298.htm|date=June 11, 2010}}</ref> Dell surpassed Compaq to become the largest PC manufacturer in 1999. Operating costs made up only 10 percent of Dell's $35 billion in revenue in 2002, compared with 21 percent of revenue at Hewlett-Packard, 25 percent at Gateway, and 46 percent at Cisco.<ref name="autogenerated2003">{{cite news|last=Jones |first=Kathryn |url=https://money.cnn.com/magazines/business2/business2_archive/2003/02/01/335960/ |title=The Dell Way Michael Dell's famous business model made his company the world's premier computer maker. Now he's branching into new fields and taking on virtually every other hardware manufacturer. Can "the Model" stand the strain? – February 1, 2003 |publisher=CNN |date=February 1, 2003 |access-date=January 9, 2014}}</ref> In 2002, when Compaq merged with Hewlett-Packard (the fourth-place PC maker), the newly combined Hewlett-Packard took the top spot for a time but struggled and Dell soon regained its lead. Dell grew the fastest in the early 2000s.<ref name="bw1103"/> |
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In 2002, Dell expanded its product line to include televisions, [[handhelds]], digital audio players, and [[Printer (computing)|printers]]. Chairman and CEO Michael Dell had repeatedly blocked President and COO [[Kevin Rollins]]'s attempt to lessen the company's heavy dependency on PCs, which Rollins wanted to fix by acquiring [[EMC Corporation]]; a move that would eventually occur over 12 years later.<ref name="autogenerated3">{{cite news |url=http://tech.fortune.cnn.com/2011/06/13/michael-dells-dilemma/ |title=Michael Dell's dilemma – Fortune Tech |work=Fortune |date=June 13, 2011 |access-date=January 9, 2014 |archive-url=https://web.archive.org/web/20120509093526/http://tech.fortune.cnn.com/2011/06/13/michael-dells-dilemma/ |archive-date=May 9, 2012 |url-status=dead }}</ref> |
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In 2003, at the annual company meeting, the stockholders approved changing the company name to "Dell Inc." to recognize the company's expansion beyond computers.<ref name="Dell-Inc-May-2003-PRE-14A">{{cite web|url=http://edgar.secdatabase.com/1992/95013403007092/filing-main.htm |title=Dell Inc, Form PRE 14A, Filing Date May 5, 2003 |publisher=secdatabase.com |access-date =March 8, 2013}}</ref> |
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In 2004, the company announced that it would build a new assembly-plant near [[Winston-Salem, North Carolina|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 July, Michael Dell stepped aside as [[chief executive officer]] while retaining his position as [[Chair (official)|chairman of the board]].<ref name="Dell-Inc-May-2004-DEF-14A">{{cite web|url=http://edgar.secdatabase.com/1422/95013404008188/filing-main.htm |title=Dell Inc, Form DEF 14A, Filing Date May 27, 2004 |publisher=secdatabase.com |access-date =March 8, 2013}}</ref> [[Kevin Rollins]], who had held a number of executive posts at Dell, became the new CEO. Despite no longer holding the CEO title, Dell essentially acted as a de facto co-CEO with Rollins.<ref name="autogenerated3"/> |
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Under Rollins, Dell purchased the computer hardware manufacturer [[Alienware]] in 2006. Dell Inc.'s plan anticipated Alienware continuing to operate independently under its existing management. Alienware expected to benefit from Dell's efficient manufacturing system.<ref>{{cite news | first=Louise | last=Lee | title= Dell Goes High-end and Hip | date= 2006-03-23 | publisher=BusinessWeek | url=http://www.businessweek.com/technology/content/mar2006/tc20060323_034268.htm }}</ref> |
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===Dissapointments=== |
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In 2005, while earnings and sales continued to rise, sales growth slowed considerably, and the company stock lost 25% of its value that year.<ref name="BW0206">Bloomberg-Businessweek [http://www.businessweek.com/technology/content/feb2006/tc20060223_710372.htm?chan=search Its Dell vs the Dell way], February 2006. Visited: April 10, 2012</ref> By June 2006, the stock traded around US$25 which was 40% down from July 2005—the high-water mark of the company in the post-dotcom era.<ref name="nytimes2006">{{cite news|last=Darlin |first=Damon |url=https://www.nytimes.com/2006/06/15/technology/15dell.html |title=Falling Short of A+ |work=The New York Times |date=June 15, 2006 |access-date=October 30, 2012}}</ref><ref>{{cite web|url=http://news.cnet.com/Dell-revamps-product-group%2C-adds-executives/2100-11746_3-6143163.html |title=Dell revamps product group, adds executives – CNET News |website=CNET |date=December 12, 2006 |access-date=October 30, 2012}}</ref> |
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The slowing sales growth has been attributed to the maturing PC market, which constituted 66% of Dell's sales, and analysts suggested that Dell needed to make inroads into non-PC business segments such as storage, services, and servers. Dell's price advantage was tied to its ultra-lean manufacturing for desktop PCs,<ref name="autogenerated1">{{cite web|url=http://news.cnet.com/2100-1014_3-6155185.html |title=Michael Dell back as CEO; Rollins resigns – CNET News |website=CNET |date=January 31, 2007 |access-date=October 30, 2012}}</ref> but this became less important as savings became harder to find inside the company's supply chain, and as competitors such as Hewlett-Packard and [[Acer Inc.|Acer]] made their PC manufacturing operations more efficient to match Dell, weakening Dell's traditional price differentiation.<ref name="news.cnet.com">{{cite web|last=Haff |first=Gordon |url=http://news.cnet.com/8301-13556_3-10471396-61.html |title=The real Dell 2.0 | The Pervasive Data Center – CNET News |website=CNET |date=March 29, 2010 |access-date=January 9, 2014}}</ref> Throughout the entire PC industry, declines in prices along with commensurate increases in performance meant that Dell had fewer opportunities to upsell to their customers (a lucrative strategy of encouraging buyers to upgrade the processor or memory). As a result, the company was selling a greater proportion of inexpensive PCs than before, which eroded profit margins.<ref name="ZDA"/> The laptop segment had become the fastest-growing of the PC market, but Dell produced low-cost notebooks in China like other PC manufacturers which eliminated Dell's manufacturing cost advantages, plus Dell's reliance on Internet sales meant that it missed out on growing notebook sales in big box stores.[http://news.cnet.com/8301-13506_3-9829431-17.html]<ref name="nytimes2006"/> ''CNET'' has suggested that Dell was getting trapped in the increasing commoditization of high volume low margin computers, which prevented it from offering more exciting devices that consumers demanded.<ref name="autogenerated1"/> |
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Despite plans of expanding into other global regions and product segments, Dell was heavily dependent on U.S. corporate PC market, as desktop PCs sold to both commercial and corporate customers accounted for 32 percent of its revenue, 85 percent of its revenue comes from businesses, and sixty-four percent of its revenue comes from North and South America, according to its 2006 third-quarter results. U.S. shipments of desktop PCs were shrinking, and the corporate PC market, which purchases PCs in upgrade cycles, had largely decided to take a break from buying new systems. The last cycle started around 2002, three or so years after companies started buying PCs ahead of the perceived [[Year 2000 problem|Y2K]] problems, and corporate clients were not expected to upgrade again until extensive testing of Microsoft's [[Windows Vista]] (expected in early 2007), putting the next upgrade cycle around 2008.<ref name="ReferenceA">{{cite web|url=http://news.cnet.com/Dell-revamps-product-group%2C-adds-executives/2100-11746_3-6143163.html |title=Dell revamps product group, adds executives – CNET News |website=CNET |date=December 12, 2006 |access-date=January 9, 2014}}</ref><ref name="ReferenceB">{{cite web|url=http://news.cnet.com/Dells-dog-days-of-summer/2100-1014_3-6097185.html |title=Dell's dog days of summer – CNET News |website=CNET |access-date=January 9, 2014}}</ref> Heavily dependent on PCs, Dell had to slash prices to boost sales volumes, while demanding deep cuts from suppliers.<ref name="autogenerated3"/> |
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Dell had long stuck by its direct sales model. Consumers had become the main drivers of PC sales in recent years,<ref name="ReferenceB"/> yet there had a decline in consumers purchasing PCs through the Web or on the phone, as increasing numbers were visiting consumer electronics retail stores to try out the devices first. Dell's rivals in the PC industry, HP, Gateway and [[Acer]], had a long retail presence and so were well poised to take advantage of the consumer shift.<ref name="director1">{{cite web|url=http://director.co.uk/MAGAZINE/2009/4%20April/Michael_Dell_62_9.html |title=Michael Dell | Dell |publisher=Director.co.uk |author=Woodward, David |url-status=dead |archive-url=https://web.archive.org/web/20140815101949/http://director.co.uk/MAGAZINE/2009/4%20April/Michael_Dell_62_9.html |archive-date=August 15, 2014 }}</ref> The lack of a retail presence stymied Dell's attempts to offer consumer electronics such as flat-panel TVs and MP3 players.<ref name="autogenerated1"/> Dell responded by experimenting with mall kiosks, plus quasi-retail stores in Texas and New York.<ref name="ReferenceA"/> |
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Dell had a reputation as a company that relied upon supply chain efficiencies to sell established technologies at low prices, instead of being an innovator.<ref name="autogenerated3"/><ref name="director1"/><ref> Michael Dell had a risk-averse management style and he openly mocked rivals that spent on [[Research and development|R&D]] and acquisitions, though by the late 2000s this may have contributed to Dell missing market shifts like mobile phones and tablet computers.[http://www.businessweek.com/articles/2013-01-24/boeings-787-dreamliner-and-the-decline-of-innovation#p2]</ref> By the mid-2000s many analysts were looking to innovating companies as the next source of growth in the technology sector. Dell's low spending on R&D relative to its revenue (compared to [[IBM]], [[Hewlett Packard]], and [[Apple Inc.]])—which worked well in the commoditized PC market—prevented it from making inroads into more lucrative segments, such as MP3 players and later mobile devices.<ref name="BW0206"/> Increasing spending on R&D would have cut into the operating margins that the company emphasized.<ref name="bw1103"/> Dell had done well with a horizontal organization that focused on PCs when the computing industry moved to horizontal mix-and-match layers in the 1980s, but by the mid-2000 the industry shifted to vertically integrated stacks to deliver complete IT solutions{{buzzword inline|date=August 2019}} and Dell lagged far behind competitors like Hewlett Packard and Oracle.<ref name="news.cnet.com"/> |
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Dell's reputation for poor customer service, since 2002, which was exacerbated as it moved call centers offshore and as its growth outstripped its technical support infrastructure, came under increasing scrutiny on the Web. The original Dell model was known for high customer satisfaction when PCs sold for thousands but by the 2000s, the company could not justify that level of service when computers in the same lineup sold for hundreds.<ref>{{cite web|last=Silverman |first=Dwight |url=http://blog.chron.com//techblog/2005/07/hey-dell-are-you-listening/ |title=Hey, Dell: Are you listening? – TechBlog |work=Houston Chronicle |date=July 3, 2005 |access-date=January 9, 2014}}</ref> Rollins responded by shifting Dick Hunter from the head of manufacturing to head of customer service. Hunter, who noted that Dell's DNA of cost-cutting "got in the way," aimed to reduce call transfer times and have call center representatives resolve inquiries in one call. By 2006, Dell had spent $100 million in just a few months to improve on this and rolled out ''DellConnect'' to answer customer inquiries more quickly. In July 2006, the company started its Direct2Dell blog, and then in February 2007, Michael Dell launched IdeaStorm.com, asking customers for advice including selling Linux computers and reducing the promotional "bloatware" on PCs. These initiatives did manage to cut the negative blog posts from 49% to 22%, as well as reduce the "Dell Hell" prominent on Internet search engines.<ref name="nytimes2006"/><ref>{{cite web|url=http://www.businessweek.com/printer/articles/294370-dell-learns-to-listen?type=old_article |title=Dell Learns to Listen |work=Bloomberg BusinessWeek |date=October 17, 2007 |access-date=January 9, 2014}}</ref> |
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There was also criticism that Dell used faulty components for its PCs, particularly the 11.8 million OptiPlex desktop computers sold to businesses and governments from May 2003 to July 2005, that suffered from [[Capacitor plague|faulty capacitors]].<ref>{{cite news| url=https://www.nytimes.com/2010/06/29/technology/29dell.html | work=The New York Times | first=Ashlee | last=Vance | title=In Suit Over Faulty Computers, Window to Dell's Fall | date=June 28, 2010}}</ref> A battery recall in August 2006, as a result of a Dell laptop catching fire caused much negative attention for the company though later, [[Sony]] was found responsible for the manufacturing of the batteries, however spokesman for Sony Yoshikazu Ochiai said the problem concerned the combination of the battery with a charger, which is specific to Dell in this case.<ref>{{Cite news|date=2006-08-15|title=Dell to recall 4.1 million batteries made by Sony - Technology - International Herald Tribune|language=en-US|work=The New York Times|url=https://www.nytimes.com/2006/08/15/technology/15iht-dell.2487518.html|access-date=2021-08-06|issn=0362-4331}}</ref> |
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2006 marked the first year that Dell's growth was slower than the PC industry as a whole. By the fourth quarter of 2006, Dell lost its title of the largest PC manufacturer to rival Hewlett Packard whose Personal Systems Group was invigorated thanks to a restructuring initiated by their CEO [[Mark Hurd]].<ref name="BW0206"/><ref>CRN.COM: [http://www.crn.com/news/components-peripherals/197002312/rollins-dells-outstanding-executive-is-now-out-of-a-job.htm;jsessionid=DKITbSt2WFcQT1hL4UqHMg**.ecappj02 Rollins now out of job]</ref><ref>{{cite news| url=https://money.cnn.com/2006/02/10/markets/spotlight/spotlight_dell/index.htm | publisher=CNN | first1=Amanda | last1=Cantrell | title=All's not well with Dell | date=February 10, 2006}}</ref> |
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====SEC Investigation==== |
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In August 2005, Dell became the subject of an informal investigation by the U.S. [[United States Securities and Exchange Commission|SEC]].<ref>{{cite web|author=Ben Ames |url=http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9002535&source=rss_news50 |title=Dell reveals SEC investigation, says Q2 profit down 51% |publisher=Computerworld.com |access-date=2012-12-04 |url-status=dead |archive-url=https://web.archive.org/web/20090116092753/http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9002535&source=rss_news50 |archive-date=January 16, 2009 }}</ref> In 2006, the company disclosed that the U.S. Attorney for the Southern District of New York had subpoenaed documents related to the company's financial reporting dating back to 2002.<ref>{{cite news|url=https://www.reuters.com/article/idUSN0115050220100401 |title=UPDATE 2-Dell says several former staff may face SEC action, Reuters Apr 1, 2010 |publisher=Reuters.com |date=2010-04-01 |access-date=2012-12-04 |first=Braden |last=Reddall}}</ref> |
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The company delayed filing financial reports for the third and fourth fiscal quarter of 2006, and several class-action lawsuits were filed.<ref>[http://www.dallasnews.com/sharedcontent/APStories/stories/D8N1MLNO0.html Dallas Morning News | News for Dallas, Texas | Texas/Southwest] {{webarchive |url=https://web.archive.org/web/20081009111823/http://www.dallasnews.com/sharedcontent/APStories/stories/D8N1MLNO0.html |date=October 9, 2008 }}</ref> Dell Inc's failure to file its quarterly earnings report could have subjected the company to de-listing from the [[NASDAQ]],<ref>{{cite web |last=Moltzen |first=Edward F. |url=http://www.crn.com/showArticle.jhtml?articleID=193004297 |archive-url=https://archive.today/20120629043729/http://www.crn.com/showArticle.jhtml?articleID=193004297 |url-status=dead |archive-date=2012-06-29 |title=NASDAQ Sends Dell, Novell Delisting Notices - Hardware - IT Channel News by CRN and VARBusiness |publisher=Crn.com |access-date=2012-12-04 }}</ref> |
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but the exchange granted Dell a waiver, allowing the stock to trade normally.<ref>{{cite web |url=http://www.crn.com/sections/breakingnews/dailyarchives.jhtml?articleId=196903036 |title=Dell Buys Time From Nasdaq On Delisting - Hardware - IT Channel News by CRN and VARBusiness |publisher=Crn.com |access-date=2012-12-04 |archive-url=https://web.archive.org/web/20120905025934/http://www.crn.com/sections/breakingnews/dailyarchives.jhtml?articleId=196903036 |archive-date=2012-09-05 |url-status=dead }}</ref> In August 2007, the Company announced that it would restate its earnings for fiscal years 2003 through 2006 and the first quarter of 2007 after an internal audit found that certain employees had changed corporate account balances to meet quarterly financial targets.<ref>{{cite web|author1=Ben Ames |author2=Robert McMillan |url=http://www.computerworld.com/s/article/9031106/Dell_to_restate_results_after_finding_manipulation |title="Dell to restate results after finding manipulation," Computerword, August 16, 2007 |publisher=Computerworld.com |date=2007-08-16 |access-date=2012-12-04}}</ref> In July of 2010, the SEC announced charges against several senior Dell executives, including Dell Chairman and CEO Michael Dell, former CEO Kevin Rollins, and former CFO James Schneider, "with failing to disclose material information to investors and using fraudulent accounting to make it falsely appear that the company was consistently meeting Wall Street earnings targets and reducing its operating expenses." Dell, inc. was fined $100 million, with Michael Dell personally fined $4 million.<ref>{{cite news |title=SEC Charges Dell and Senior Executives with Disclosure and Accounting Fraud |url=https://www.sec.gov/news/press/2010/2010-131.htm |access-date=22 November 2021 |publisher=U.S. Securities and Exchange Commission |date=22 July 2010 |ref=SECrelease}}</ref> |
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====Michael Dell resumes CEO Role==== |
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After four out of five quarterly earnings reports were below expectations, Rollins resigned as president and CEO on January 31, 2007, and founder Michael Dell assumed the role of CEO again.<ref name="Dell-Inc-Feb-2007-8-K">{{cite web|url=http://pdf.secdatabase.com/2259/0000950134-07-002027.pdf |title=Dell Inc, Form 8-K, Current Report, Filing Date Feb 5, 2007 |publisher=secdatabase.com |access-date =March 8, 2013}}</ref> |
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On March 1, 2007, the company issued a preliminary quarterly earnings report showing gross sales of $14.4 billion, down 5% year-over-year, and net income of $687 million (30 cents per share), down 33%. Net earnings would have declined even more if not for the effects of eliminated employee bonuses, which accounted for six cents per share. NASDAQ extended the company's deadline for filing financials to May 4.<ref>{{cite web |author=Alexei Oreskovic |url=http://www.thestreet.com/_yahoo/newsanalysis/techhardware/10341935.html |archive-url=http://arquivo.pt/wayback/20091014061317/http://www.thestreet.com/_yahoo/newsanalysis/techhardware/10341935.html |url-status=dead |archive-date=2009-10-14 |title=Dell's Dejection |publisher=TheStreet.com |date=2007-03-02 |access-date=2012-12-04 }}</ref> |
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===Dell 2.0 and downsizing=== |
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Dell announced a change campaign called "Dell 2.0," reducing the number of employees and diversifying the company's products.<ref name="director1"/><ref>{{cite web|url=http://news.cnet.com/2100-1014_3-6155185.html |title=Michael Dell back as CEO; Rollins resigns – CNET News |website=CNET |date=January 31, 2007 |access-date=February 10, 2013}}</ref> While chairman of the board after relinquishing his CEO position, Michael Dell still had significant input in the company during Rollins' years as CEO. With the return of Michael Dell as CEO, the company saw changes in operations, the exodus of many senior vice-presidents and new personnel brought in from outside the company.<ref name="ReferenceA"/> Michael Dell announced a number of initiatives and plans (part of the "Dell 2.0" initiative) to improve the company's financial performance. These include elimination of 2006 bonuses for employees with some discretionary awards, reduction in the number of managers reporting directly to Michael Dell from 20 to 12, and reduction of "[[bureaucracy]]". Jim Schneider retired as CFO and was replaced by [[Donald Carty]], as the company came under an SEC probe for its accounting practices.<ref>{{cite web|url=http://news.cnet.com/Dell-CFO-stepping-down-in-January/2100-1003_3-6144950.html |title=Dell CFO stepping down in January – CNET News |website=CNET |access-date=January 9, 2014}}</ref> |
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On April 23, 2008, Dell announced the closure of one of its biggest Canadian call-centers in [[Kanata, Ontario]], terminating approximately 1100 employees, with 500 of those redundancies effective on the spot, and with the official closure of the center scheduled for the summer. The call-center had opened in 2006 after the city of [[Ottawa]] won a bid to host it. Less than a year later, Dell planned to double its workforce to nearly 3,000 workers add a new building. These plans were reversed, due to a high [[Canadian dollar]] that made the Ottawa staff relatively expensive, and also as part of Dell's turnaround, which involved moving these call-center jobs offshore to cut costs. |
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<ref>{{cite news |
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| author1 = Seggewiss, Krista |
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| author2 = Hill, Bert |
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| title = The Dell dream dies |
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| work = Ottawa Citizen |
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| url = http://www.canada.com/ottawacitizen/news/story.html?id=d399d387-df1f-4400-8274-1c45879f8ed2 |
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| date = April 24, 2008 |
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| access-date = May 27, 2009 |
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| quote = The Ottawa centre is closing because Dell can't justify paying $18 per hour with the Canadian and American currencies at parity. The relatively high pay, benefits and training opportunities separated Dell from other call centres ... |
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| archive-url = https://web.archive.org/web/20090126202553/http://www.canada.com/ottawacitizen/news/story.html?id=d399d387-df1f-4400-8274-1c45879f8ed2 |
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| archive-date = January 26, 2009 |
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| url-status = dead}}</ref> |
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The company had also announced the shutdown of its [[Edmonton]], [[Alberta]] office, losing 900 jobs. In total, Dell announced the ending of about 8,800 jobs in 2007–2008 — 10% of its workforce.<ref>{{cite news|author = Gollner, Phillip|title = UPDATE 1-Dell to cut nearly 900 jobs, close Canada center|work= Reuters|url = https://www.reuters.com/article/companyNews/idUSN3134850320080131|date = January 31, 2008}}</ref> |
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By the late 2000s, Dell's "configure to order" approach of manufacturing—delivering individual PCs configured to customer specifications from its US facilities was no longer as efficient or competitive with high-volume Asian contract manufacturers as PCs became powerful low-cost commodities.<ref name="statesman">{{cite web|url=http://www.statesman.com/news/business/dell-selling-former-site-of-north-carolina-manufac/nTbTJ/|title=Dell selling former site of North Carolina manufacturing plant|publisher=statesman.com|access-date=April 27, 2013}}</ref><ref name="statesman1">{{cite news|url=http://www.statesman.com/business/content/business/stories/technology/2009/10/08/1008Dell.html |title=Dell closing its last large U.S. plant |newspaper=Austin American-Statesman |date=October 8, 2009 |author=Kirk Ladendorf |access-date=November 19, 2009 |url-status=dead |archive-url=https://web.archive.org/web/20091011102118/http://www.statesman.com/business/content/business/stories/technology/2009/10/08/1008Dell.html |archive-date=October 11, 2009 }}</ref> Dell closed plants that produced desktop computers for the North American market, including the Mort Topfer Manufacturing Center in [[Austin, Texas]] (original location)<ref>{{cite web|author=95gt-95gt-95gt (1 comment ) |url=http://news.cnet.com/2100-1003_3-5428990.html |title=Inside Dell's manufacturing mecca – CNET News |website=CNET |access-date=January 9, 2014}}</ref><ref>{{cite web|last=Silverman |first=Dwight |url=http://blog.chron.com/techblog/2008/04/one-time-showcase-for-dell-closing-in-austin/ |title=One-time showcase for Dell closing in Austin – TechBlog |work=Houston Chronicle |date=April 1, 2008 |access-date=January 9, 2014}}</ref> and [[Lebanon, Tennessee]] (opened in 1999) in 2008 and early 2009, respectively. The desktop production plant in [[Winston-Salem, North Carolina]], received [[US$]]280 million in incentives from the state and opened in 2005, but ceased operations in November 2010. Dell's contract with the state required them to repay the incentives for failing to meet the conditions, and they sold the North Carolina plant to Herbalife.<ref>{{cite news|url=http://www.bizjournals.com/charlotte/news/2012/12/19/herbalife-to-open-nc-plant-creating.html |title=Herbalife to open N.C. plant, creating 500 jobs – Charlotte Business Journal |work=The Business Journals |date=December 19, 2012 |access-date=April 27, 2013}}</ref><ref name="theregister.co.uk">The Register: [https://www.theregister.co.uk/2009/10/08/dell_closing_north_carolina_plant/ Dell cuts North-Carolina plant despite $280m sweetener], October 8, 2009. Visited: April 10, 2012</ref><ref name="bizjournals.com">{{cite news| url=http://www.bizjournals.com/austin/stories/2010/09/13/daily2.html | title=Dell closes N.C. manufacturing plant | date=September 13, 2010}}</ref> Most of the work that used to take place in Dell's U.S. plants was transferred to contract manufacturers in Asia and Mexico, or some of Dell's own factories overseas. The [[Miami|Miami, Florida]], facility of its Alienware subsidiary remains in operation, while Dell continues to produce its servers (its most profitable products) in Austin, Texas.<ref name="statesman1"/> On January 8, 2009, Dell announced the closure of its manufacturing plant in Limerick, Ireland, with the loss of 1,900 jobs and the transfer of production to its plant in [[Łodź]] in Poland.<ref>FinFacts Ireland [http://www.finfacts.ie/irishfinancenews/article_1025198.shtml Dell remains Ireland's biggest manufacturing exporter despite closing Limerick plant], November 16, 2012. Visited: April 23, 2013.</ref> |
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The release of Apple's [[iPad]] [[tablet computer]] had a negative impact on Dell and other major PC vendors, as consumers switched away from desktop and laptop PCs. Dell's own mobility division has not managed success with developing smartphones or tablets, whether running Windows or [[Google Android]].<ref>{{cite news|author=Charles Arthur |url=http://www.guardian.co.uk/technology/2012/nov/16/dell-revenues-slump-pc-tablet-smartphone |title=Dell revenues slump as tablets and smartphones eat into market | ''The Guardian''. |work=The Guardian |access-date=April 27, 2013 |location=London |date=November 16, 2012}}</ref><ref name="beta.fool">{{cite web |last=Sun |first=Leo |url=http://beta.fool.com/leokornsun/2013/02/20/death-dell/25021/ |title=The Death of Dell – AAPL, DELL, GOOG, HPQ, MSFT – Foolish Blogging Network |publisher=Beta.fool.com |date=February 20, 2013 |access-date=April 27, 2013 |archive-url=https://web.archive.org/web/20130328094746/http://beta.fool.com/leokornsun/2013/02/20/death-dell/25021/ |archive-date=March 28, 2013 |url-status=dead }}</ref> The [[Dell Streak]] was a failure commercially and critically due to its outdated OS, numerous bugs, and low resolution screen. ''InfoWorld'' suggested that Dell and other OEMs saw tablets as a short-term, low-investment opportunity running [[Google Android]], an approach that neglected user interface and failed to gain long term market traction with consumers.<ref>{{cite web|last=Gruman |first=Galen |url=https://www.macworld.com/article/1159578/anatomy_of_failure_rim_microsoft_nokia.html?page=2 |title=Anatomy of failure: Mobile flops from RIM, Microsoft, and Nokia |work=MacWorld |access-date=April 27, 2013}}</ref><ref>{{cite web|url=http://business.financialpost.com/2012/11/15/dell-hp-earnings-expected-to-mark-death-of-pc-era/ |title=Dell, HP earnings expected to mark death of PC era | Financial Post |publisher=Business.financialpost.com |date=November 15, 2012 |access-date=April 27, 2013}}</ref> Dell has responded by pushing higher-end PCs, such as the XPS line of notebooks, which do not compete with the [[Apple iPad]] and [[Kindle Fire]] tablets.<ref>{{cite news |url=http://tech.fortune.cnn.com/2012/04/06/dell/ |title=The Dell dilemma – Fortune Tech |work=Fortune |date=April 6, 2012 |access-date=April 27, 2013 |archive-url=https://web.archive.org/web/20130401080037/http://tech.fortune.cnn.com/2012/04/06/dell/ |archive-date=April 1, 2013 |url-status=dead }}</ref> The growing popularity of smartphones and tablet computers instead of PCs drove Dell's consumer segment to an operating loss in Q3 2012. In December 2012, Dell suffered its first decline in holiday sales in five years, despite the introduction of [[Windows 8]].<ref>[https://www.reuters.com/article/us-dell-buyout-idUSBRE91D19C20130214 "Dell CEO agreed to lower shares' value to push $24 billion buyout"]. ''Reuters''. February 14, 2013</ref> |
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In the shrinking PC industry, Dell continued to lose market share, as it dropped below [[Lenovo]] in 2011 to fall to number three in the world. Dell and fellow American contemporary Hewlett Packard came under pressure from Asian PC manufacturers Lenovo, [[Asus]], and Acer, all of which had lower production costs and willing to accept lower profit margins. In addition, while the Asian PC vendors had been improving their quality and design, for instance Lenovo's [[ThinkPad]] series was winning corporate customers away from Dell's laptops, Dell's customer service and reputation had been slipping.<ref>{{cite news| url=https://www.nytimes.com/2013/02/10/your-money/at-dell-a-gamble-on-a-legacy.html | work=The New York Times | first=Jeff | last=Sommer | title=At Dell, a Gamble on a Legacy | date=February 9, 2013}}</ref><ref>{{cite web|last=Cunningham |first=Andrew |url=https://arstechnica.com/gadgets/2012/10/lenovo-and-asus-are-up-dell-and-hp-are-down-and-pc-sales-are-slowing/ |title=Lenovo and Asus are up, Dell and HP are down, and PC sales are slowing |website=Ars Technica |date=October 10, 2012 |access-date=April 27, 2013}}</ref> Dell remained the second-most profitable PC vendor, as it took 13 percent of operating profits in the PC industry during Q4 2012, behind Apple Inc.'s Macintosh that took 45 percent, seven percent at Hewlett Packard, six percent at Lenovo and Asus, and one percent for Acer.<ref>[http://www.channelregister.co.uk/2013/04/17/apple_macs_profits/ "PC floggers scavenge for crumbs as Apple hoovers up profits • The Channel"]. ''channelregister.co.uk''.</ref> |
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Dell has been attempting to offset its declining PC business, which still accounted for half of its revenue and generates steady cash flow,<ref>{{cite news |author=Aaron Ricadela |url=http://washpost.bloomberg.com/Story?docId=1376-MGQYI21A74E901-4T7RPT9E2ET8T8I5GR6KM8ULT8 |title=Business: Washington Post Business Page, Business News |publisher=Bloomberg L.P. |date=February 6, 2013 |access-date=April 27, 2013 |archive-url=https://web.archive.org/web/20130601052217/http://washpost.bloomberg.com/Story?docId=1376-MGQYI21A74E901-4T7RPT9E2ET8T8I5GR6KM8ULT8 |archive-date=June 1, 2013 |url-status=dead }}</ref> by expanding into the enterprise market with servers, networking, software, and services.<ref>{{cite news|last=Schofield |first=Jack |url=https://www.zdnet.com/the-love-of-mike-what-you-need-to-know-about-dells-buy-out-7000010924/ |title=The love of Mike: What you need to know about Dell's buy-out |work=ZDNet |date=February 6, 2013 |access-date=April 27, 2013}}</ref> It avoided many of the acquisition writedowns and management turnover that plagued its chief rival Hewlett Packard.<ref name="beta.fool" /><ref name="chron.com">{{cite web|url=https://www.chron.com/business/steffy/article/Steffy-HP-Dell-fight-to-stay-relevant-4062878.php |title=HP, Dell fight to stay relevant |work=Houston Chronicle |access-date=January 9, 2014}}</ref> Dell also managed some success in taking advantage of its [[high-touch]] direct sales heritage to establish close relationships and design solutions{{buzzword inline|date=August 2019}} for clients. Despite spending $13 billion on acquisitions to diversify its portfolio beyond hardware,<ref name="bloomberg.com"/> the company was unable to convince the market that it could thrive or made the transformation in the post-PC world,<ref name="chron.com"/> as it suffered continued declines in revenue and share price.<ref>{{cite news|last=Worthen |first=Ben |url=http://online.wsj.com/article/SB10000872396390444812704577605703329715394.html |title=H-P, Dell Struggle as Buyers Shun PCs |work=The Wall Street Journal |date=August 22, 2012 |access-date=June 22, 2013}}</ref><ref>{{cite news|last=Arthur |first=Charles |url=http://www.guardian.co.uk/technology/2012/nov/16/dell-revenues-slump-pc-tablet-smartphone |title=Dell revenues slump as tablets and smartphones eat into market |work=The Guardian |date=November 16, 2012 |access-date=June 22, 2013 |location=London}}</ref><ref>{{cite web|author=Jeffrey Burt |url=http://www.eweek.com/pc-hardware/dell-finances-continue-to-be-hit-by-struggling-pc-market/ |title=Dell Finances Continue to Be Hit by Struggling PC Market |publisher=Eweek.com |date=November 15, 2012 |access-date=April 27, 2013}}</ref><ref name="economist">{{cite news|author=Schumpeter Business and management |url=http://www.economist.com/blogs/schumpeter/2013/02/dells-buy-out |title=Dell's buy-out: Heading for the exit |work=The Economist |date=February 5, 2013 |access-date=April 27, 2013}}</ref> Dell's market share in the corporate segment was previously a "moat" against rivals but this has no longer been the case as sales and profits have fallen precipitously.<ref>{{cite news|url=https://www.forbes.com/sites/steveschaefer/2013/09/12/michael-dell-finally-sews-up-buyout-now-for-the-hard-part/print/ |title=Michael Dell Finally Sews Up Buyout, Now For The Hard Part |work=Forbes |date=December 9, 2013 |access-date=January 9, 2014 |first=Steve |last=Schaefer}}</ref> |
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===2013 buyout=== |
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After several weeks of rumors, which started around January 11, 2013, Dell announced on February 5, 2013, that it had struck a $24.4 billion [[leveraged buyout]] deal, that would have delisted its shares from the NASDAQ and Hong Kong Stock Exchange and taken it private.<ref name=autogenerated2>{{cite web|url=http://edgar.secdatabase.com/2319/119312513041273/filing-main.htm |title=Dell Inc, Form 8-K, Current Report, Filing Date Feb 6, 2013 |publisher=secdatabase.com |access-date =March 8, 2013}}</ref><ref>Official Dell pressrelease on [http://content.dell.com/us/en/corp/d/secure/2013-02-04-michael-dell-silverlake-acquisition.aspx (leveraged) buyout by Michael Dell and Silverlake] {{Webarchive|url=https://web.archive.org/web/20130210025350/http://content.dell.com/us/en/corp/d/secure/2013-02-04-michael-dell-silverlake-acquisition.aspx |date=February 10, 2013 }}, February 5, 2013. Visited: February 5, 2013</ref><ref>{{cite news|url=http://finance.yahoo.com/q?s=DELL&ql=1 |title=DELL: Summary for Dell Inc.- Yahoo!! Finance |work=Yahoo! Finance |access-date=February 10, 2013}}</ref> [[Reuters]] reported that Michael Dell and [[Silver Lake Partners]], aided by a $2 billion loan from [[Microsoft]], would acquire the public shares at $13.65 apiece.<ref name="buyout">{{cite news|title=Dell to go private in landmark $24.4 billion deal|first=Ben|last=Berkowitz|author2=Edwin Chan|url=https://www.reuters.com/article/us-dell-buyout-idUSBRE9140NF20130205|work=Reuters|date=February 5, 2013|access-date=February 5, 2013}}</ref> The $24.4 billion buyout was projected to be the largest leveraged buyout backed by private equity since the [[2007 financial crisis]].<ref name="buyout2">{{cite news|title=Dell's Record-Breaking Buyout|first=William|last=Alden|url=http://dealbook.nytimes.com/2013/02/05/dells-record-breaking-buyout/|work=The New York Times|date=February 5, 2013|access-date=February 5, 2013}}</ref> It is also the largest technology buyout ever, surpassing the 2006 buyout of [[Freescale Semiconductor]] for $17.5 billion.<ref name="buyout2"/> |
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The founder of Dell, Michael Dell, said of the February offer "I believe this transaction will open an exciting new chapter for Dell, our customers and team members".<ref name="buyout3"/> Dell rival Lenovo reacted to the buyout, saying "the financial actions of some of our traditional competitors will not substantially change our outlook".<ref name="buyout3">{{cite news|title=Dell Inc. to go private in $24.4-billion deal|first=Andrea|last=Chang|url=https://www.latimes.com/business/technology/la-fi-tn-dell-goes-private-20130205,0,7066492.story|work=Los Angeles Times|date=February 5, 2013|access-date=February 5, 2013}}</ref> |
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In March 2013, the [[Blackstone Group]] and [[Carl Icahn]] expressed interest in purchasing Dell.<ref>{{cite news |url=https://www.reuters.com/article/us-blackstone-dell-idUSBRE92M08520130323 |title=Blackstone, Icahn set up three-way battle to buy out Dell |last1=Roumeliotis |first1=Greg |last2=Toonkel |first2=Jessica |date=March 23, 2013 |website=Reuters.com}}</ref> In April 2013, Blackstone withdrew their offer, citing deteriorating business.<ref>{{cite news|last=Shu|first=Catherine|title=Blackstone Reportedly Withdraws Bid For Dell, Citing "Deteriorating" Business|url=https://techcrunch.com/2013/04/18/blackstone-reportedly-withdraws-bid-for-dell-citing-deteriorating-business/|work=TechCrunch|date=April 19, 2013}}</ref><ref name=nyt>{{cite news|last=Sorkin|first=Andrew Ross|title=Blackstone Is Said to Drop Out of the Bidding for Dell|url=http://dealbook.nytimes.com/2013/04/18/blackstone-seen-abandoning-bid-for-dell/|work=The New York Times|date=April 18, 2013}}</ref> Other private equity firms such as KKR & Co. and TPG Capital declined to submit alternative bids for Dell, citing the uncertain market for personal computers and competitive pressures, so the "wide-open bidding war" never materialized.<ref name="bloomberg.com"/> Analysts said that the biggest challenge facing Silver Lake would be to find an "exit strategy" to profit from its investment, which would be when the company would hold an IPO to go public again, and one warned "But even if you can get a $25bn enterprise value for Dell, it will take years to get out."<ref name="Gelles">{{cite web|last=Gelles |first=David |url=http://www.ft.com/cms/s/0/40f132ca-6fbe-11e2-8785-00144feab49a.html |title=Daring $24bn deal to make Dell relevant |work=Financial Times |date=February 5, 2013 }}</ref> |
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In May 2013, Dell joined his board in voting for his offer.<ref>Murphy, Tom (May 31, 2013) [https://web.archive.org/web/20130608014003/http://abcnews.go.com/Technology/wireStory/dell-board-recommends-michael-dell-buyout-offer-19294725 "Dell Board Recommends Michael Dell Buyout Offer"]. ''Associated Press'' via ''ABC News''.</ref> The following August he reached a deal with the special committee on the board for $13.88 (a raised price of $13.75 plus a special dividend of 13 cents per share), as well as a change to the voting rules.<ref>[https://www.reuters.com/article/us-dell-buyout-vote-idUSBRE97106220130802 "Michael Dell closes in on prize with sweeter $25 billion deal"]. ''Reuters''.</ref> The $13.88 cash offer (plus a $.08 per share dividend for the third fiscal quarter) was accepted on September 12<ref>[https://www.wired.com/wiredenterprise/2013/09/dell-private/?cid=social11857154 "Dell Takes Itself Private With $25 Billion Buyout"]. ''WIRED''. September 2013</ref> and closed on October 30, 2013, ending Dell's 25-year run as a publicly-traded company. |
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After the buyout, the newly private Dell offered a Voluntary Separation Program that they expected to reduce their workforce by up to seven percent. The reception to the program so exceeded the expectations that Dell may be forced to hire new staff to make up for the losses.<ref>{{cite web |url=http://www.channelregister.co.uk/2014/02/12/dell_vsp/ |title=Dell staffers head for exit armed with redundo cheques |last1=Kunert |first1=Paul |date=February 12, 2014 |work=channelregister.co.uk }}</ref> |
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===Recent History=== |
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On November 19, 2015, Dell, alongside [[ARM Holdings]], [[Cisco Systems]], [[Intel]], [[Microsoft]], and [[Princeton University]], founded the [[OpenFog Consortium]], to promote interests and development in [[fog computing]].<ref>{{Cite news|url=https://www.forbes.com/sites/janakirammsv/2016/04/18/is-fog-computing-the-next-big-thing-in-internet-of-things/2/#1971ac3a34c9|title=Is Fog Computing the Next Big Thing in the Internet of Things|last=Janakiram|first=MSV|date=April 18, 2016|work=Forbes Magazine|access-date=April 18, 2016}}</ref> |
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====Acquisition of EMC==== |
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On October 12, 2015, [[Dell Inc.]] announced its intent to acquire [[EMC Corporation]] in a cash-and-stock deal valued at $67 billion, which has been considered the largest-ever acquisition in the technology sector. As part of the acquisition, Dell would take over EMC's 81% stake in the cloud-computing and virtualization company [[VMWare]].<ref name=Dell-EMC>{{cite web |last1=Gara |first1=Antonie |title=Deal Of The Century: How Michael Dell Turned His Declining PC Business Into A $40 Billion Windfall |url=https://www.forbes.com/sites/antoinegara/2021/08/03/deal-of-the-century-how-michael-dell-turned-his-declining-pc-business-into-40-billion-windfall/?sh=2f3512745c2a |website=Forbes |access-date=22 November 2021}}</ref> This would combine Dell's enterprise server, personal computer, and mobile businesses with EMC's enterprise storage business in a significant Vertical merger of IT giants. Dell would pay $24.05 per share of EMC, and $9.05 per share of [[tracking stock]] in [[VMware]].<ref name=wsj-emcdell>{{cite news|title=Dell to Buy EMC for $67 Billion|url=https://www.wsj.com/articles/dell-to-buy-emc-for-67-billion-1444649012|access-date=12 October 2015|work=The Wall Street Journal|url-access=subscription }}</ref><ref name=nyt-emcdell>{{cite news|title=In Takeover of EMC, Dell Makes Ambitious Bet|url=https://www.nytimes.com/2015/10/12/business/dealbook/dell-to-buy-emc-for-65-billion-a-record-takeover-in-technology.html|access-date=12 October 2015|work=The New York Times}}</ref><ref name=bbc-dellemc>{{cite news|title=Dell agrees $67bn EMC takeover|url=https://www.bbc.com/news/business-34505553|access-date=12 October 2015|work=BBC News}}</ref> |
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On September 7, 2016, Dell Inc. completed the merger with EMC Corp., which involved the issuance of $45.9 billion in debt and $4.4 billion common stock.<ref>{{cite web|url=https://www.sec.gov/Archives/edgar/data/1571996/000157199617000004/delltechnologiesfy1710k.htm|title=Document|website=www.sec.gov}}</ref><ref>{{cite press release |
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|url=http://www.businesswire.com/news/home/20160907005946/en/Historic-Dell-EMC-Merger-Complete-Forms-World%E2%80%99s |
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|title=Historic Dell and EMC Merger Complete; Forms World's Largest Privately-Controlled Tech Company |
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|publisher=[[Business Wire]] |date=September 7, 2016}}</ref> At the time, some analysts claimed that Dell's acquisition of the former |
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Iomega could harm the [[LenovoEMC]] partnership.<ref name=IomegaPart.TheRegister>{{cite news |newspaper=TheRegister (UK) |
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|url=https://www.theregister.com/2015/10/15/dell_emc_merger_lenovo_reselling |
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|title=Dell-EMC merger could leave Lenovo out in the cold – analysts |
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|author=Chris Mellor |date=October 15, 2015}}</ref> |
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In July 2018, Dell announced intentions to become a publicly traded company again by paying $21.7 billion in both cash and stock to buy back shares from its stake in VMware, offering shareholders roughly 60 cents on the dollar as part of the deal.<ref>{{Cite news|url=https://www.reuters.com/article/us-dell-vmware/dell-moves-to-go-public-spurns-ipo-idUSKBN1JS11X|title=Dell moves to go public, spurns IPO|last=Donnell|first=Carl|work=Reuters|access-date=July 3, 2018|language=en-US}}</ref><ref name="Dell-EMC" /> In November, [[Carl Icahn]] (9.3% owner of Dell) sued the company over plans to go public.<ref>{{Cite news|url=https://www.theglobeandmail.com/business/article-carl-icahn-sues-dell-over-plans-to-go-public-2/|title=Carl Icahn sues Dell over plans to go public}}</ref> As a result of pressure from Icahn and other [[Activist Investor|activist investors]], Dell renegotiated the deal, ultimately offering shareholders about 80% of market value. As part of these deal, Dell once again became a public company, now trading under the name '''Dell Technologies'''.<ref name="Dell-EMC" /> |
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In January 2021, Dell reported $94 billion in sales and $13 billion operating cash flow during 2020.<ref name="Dell-EMC" /> |
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== Dell and AMD == |
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When Dell acquired [[Alienware]] early in 2006, some Alienware systems had AMD chips. On August 17, 2006, a Dell press release<ref>[http://www.Dell.com/content/topics/global.aspx/corp/pressoffice/en/2006/2006_08_17_rr_000?c=us&l=en&s=corp press-release] {{webarchive|url=https://web.archive.org/web/20090105074818/http://www.dell.com/content/topics/global.aspx/corp/pressoffice/en/2006/2006_08_17_rr_000?c=us&l=en&s=corp |date=January 5, 2009 }}</ref> stated that starting in September, Dell Dimension desktop computers would have [[AMD]] processors and that later in the year Dell would release a two-socket, quad-processor server using AMD [[Opteron]] chips, moving away from Dell's tradition of only offering [[Intel]] processors in Dell PCs. |
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[[CNet]]'s News.com on August 17, 2006 cited Dell's CEO Kevin Rollins as attributing the move to AMD processors to lower costs and to AMD technology.<ref>{{cite web|url=http://news.cnet.com/Dented+Dell+picks+up+AMD+chips+amid+SEC+probe/2100-1014_3-6106905.html?tag=nl |title=Product reviews and prices, software downloads, and tech news - CNET |publisher=News.com.com |date=2006-08-17 |access-date=2012-12-04}}</ref> 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." |
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On October 23, 2006, Dell announced new AMD-based servers — the PowerEdge 6950 and the [[PowerEdge]] SC1435. |
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On November 1, 2006, Dell's website began offering notebooks based on AMD processors (the Inspiron 1501 with a {{convert|15.4|in|mm|sing=on}} display) with the choice of a single-core MK-36 processor, dual-core Turion X2 chips or Mobile Sempron.<ref>{{cite web |
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| first = Tom |
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| last = Krazit |
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| title = Dell puts AMD-powered notebooks on sale |
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| url = http://news.cnet.com/Dell+puts+AMD-powered+notebooks+on+sale/2100-1006_3-6131558.html?tag=nefd.top |
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| work = CNET News |
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| publisher = CBS Interactive |
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| location = |
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| page = |
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| pages = |
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| doi = |
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| date = 2006-11-01 |
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| quote = Dell's first notebooks with chips from Advanced Micro Devices appeared for sale on its Web site Wednesday, although the company made no formal announcement. |
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}}</ref> |
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In 2017, Dell released the AlienWare 17. The model was primarily based on NVIDIA GeForce GTX 1080 systems, which makes it perfect for gaming and graphic designing. |
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<ref>{{cite web |
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| first = Old Dell |
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| last = Laptop Reviews |
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| title = Alienware Unveils New Alienware 17 Gaming Notebook |
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| url = https://olddelllaptopreviews.wordpress.com/2018/02/24/alienware-unveils-new-alienware-17-gaming-notebook/ |
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| work = Old Dell Laptop Reviews |
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| publisher = |
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| location = |
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| page = |
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| pages = |
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| doi = |
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| date = 24 February 2018 |
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| quote = Dell's latest AlienWare beast takes off in the market with its amazing specs. |
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}}</ref> |
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== Dell and desktop Linux == |
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In 1998, [[Ralph Nader]] asked Dell (and five other major [[Original equipment manufacturer|OEM]]s) to offer alternate operating systems to [[Microsoft Windows]], specifically including [[Linux]], for which "there is clearly a growing interest"<ref>{{cite web|url=http://lists.essential.org/1998/info-policy-notes/msg00007.html |title=Nader/CPT ask OEMs to offer OS alternatives |author=James Love (Information Policy Notes) |date=1998-03-08 |access-date=2008-08-28 |url-status=dead |archive-url=https://web.archive.org/web/20080605052352/http://lists.essential.org/1998/info-policy-notes/msg00007.html |archive-date=June 5, 2008 }}</ref><ref>{{cite web |
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|url=http://www.cptech.org/ms/ |
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|title=CPT's Microsoft Antitrust Page |
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|author=Consumer Project on Technology |
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| archive-url = https://web.archive.org/web/20021106195359/http://www.cptech.org/ms/ |
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| archive-date = 2002-11-06 |
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}}</ref> |
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Possibly coincidentally, Dell started offering Linux notebook systems that "cost no more than their Windows 98 counterparts" in 2000,<ref>{{cite news|url=http://archives.cnn.com/2000/TECH/computing/02/03/linux.laptop.idg/ |title=Dell offers Linux on laptops |author=Dan Neel (CNN) |date=2000-02-03 |url-status=dead |archive-url=https://web.archive.org/web/20091010164157/http://archives.cnn.com/2000/TECH/computing/02/03/linux.laptop.idg/ |archive-date=October 10, 2009 }}</ref> and soon expanded, with Dell becoming "the first major manufacturer to offer Linux across its full product line"<ref>{{cite web |
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|url = http://www.Dell.com/downloads/global/corporate/speeches/msd/2000_08_15_msd_linux.pdf |
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|title = Michael Dell Remarks/Putting Linux on the Fast Track/Keynote at the LinuxWorld Expo |
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|author = Michael Dell |
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|date = 2000-08-15 |
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|url-status = dead |
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|archive-url = https://web.archive.org/web/20100522121024/http://www.dell.com/downloads/global/corporate/speeches/msd/2000_08_15_msd_linux.pdf |
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|archive-date = 2010-05-22 |
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}}</ref> |
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However, by early 2001 Dell had "disbanded its Linux business unit."<ref>{{cite web |
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|url=https://www.theregister.co.uk/2002/03/19/microsoft_killed_dell_linux_states/ |
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|title=Microsoft 'killed Dell Linux' — States |
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|author=Andrew Orlowski (The Register) |
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|date= 2002-03-19 |
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}}</ref> |
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On February 26, 2007, Dell announced that it had commenced a program to sell and distribute a range of computers with pre-installed [[Linux]] distributions as an alternative to [[Microsoft Windows]]. Dell indicated that [[Novell]]'s [[SUSE Linux|SUSE]] Linux would appear first.<ref>{{cite web |url=http://www.itwire.com.au/content/view/9951/53/ |title=Dell says all aboard for Linux PCs |publisher=iTWire |access-date=2012-12-04 |archive-url=https://web.archive.org/web/20070228094201/http://www.itwire.com.au/content/view/9951/53/ |archive-date=2007-02-28 |url-status=dead }}</ref> |
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However, Dell on February 27, 2007 announced that its previous announcement related to certifying the hardware as ready to work with Novell SUSE Linux and that it (Dell) had no plans to sell systems pre-installed with Linux in the near future.<ref>{{cite web|url=http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9011907 |title=Dell to Linux users: Not so fast |author=Computerworld |date=2007-02-27 |url-status=dead |archive-url=https://web.archive.org/web/20090116092939/http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9011907 |archive-date=January 16, 2009 }}</ref> |
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On March 28, 2007, Dell announced that it would begin shipping some desktops and laptops with Linux pre-installed, although it did not specify which distribution of Linux or which hardware would lead.<ref>[http://www.Dell.com/content/topics/global.aspx/ideastorm/ideasinaction?c=us&l=en&s=gen Ideas In Action] {{webarchive|url=https://web.archive.org/web/20080319105855/http://www.dell.com/content/topics/global.aspx/ideastorm/ideasinaction?c=us&l=en&s=gen |date=March 19, 2008 }}</ref> On April 18, 2007 a report appeared suggesting that Michael Dell used [[Ubuntu (operating system)|Ubuntu]] on one of his home systems.<ref>{{cite web |
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|url = http://www.desktoplinux.com/news/NS5149877302.html |
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|title = Michael Dell's Linux choice? Ubuntu |
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|author = Steven J. Vaughan-Nichols (DesktopLinux) |
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|date = 2007-04-18 |
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|access-date = 2010-06-06 |
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|archive-url = https://web.archive.org/web/20100622155842/http://www.desktoplinux.com/news/NS5149877302.html |
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|archive-date = 2010-06-22 |
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|url-status = dead |
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}}</ref> |
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On May 1, 2007, Dell announced it would ship the Ubuntu Linux distribution.<ref>{{cite news|url=http://news.bbc.co.uk/2/hi/business/6610901.stm|title=Dell to choose Ubuntu|author=BBC|date= 2007-05-01 |
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| access-date=2010-01-02 | work=BBC News}}</ref> |
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On May 24, 2007, Dell started selling models with Ubuntu Linux 7.04 pre-installed: a laptop, a budget computer, and a high-end PC.<ref>{{cite web |
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| url = http://direct2Dell.com/one2one/archive/2007/05/24/15994.aspx |
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| title = Dell Offers Three Consumer Systems With Ubuntu 7.04 |
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| first = Lionel |
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| last = Menchaca |
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| date = 2008-05-24 |
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| work = Direct2Dell blog |
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| publisher = |
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| location = |
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| doi = |
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| access-date = 2009-10-21 |
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| quote = Dell will offer U.S customers three different systems with Ubuntu 7.04 installed: the XPS 410n and Dimension E520n desktops and the Inspiron E1505n notebook. |
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}}</ref> |
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On June 27, 2007, Dell announced on its Direct2Dell blog that it planned to offer more pre-loaded systems (the new [[Dell Inspiron]] desktops and laptops). After the [[Dell IdeaStorm|IdeaStorm]] site supported extending the bundles beyond the US market, Dell later announced more international marketing.<ref>[http://direct2Dell.com/one2one/archive/2007/06/27/19470.aspx Ubuntu on Two New Inspirons; Update from the Linux Live Expert Forum - Direct2Dell<!-- Bot generated title -->]</ref> On August 7, 2007, Dell officially announced that it would offer one notebook and one desktop in the UK, France and Germany with Ubuntu "pre-installed". At [[LinuxWorld Conference and Expo|LinuxWorld]] 2007 Dell announced plans to provide [[Novell]]'s [[SUSE Linux Enterprise Desktop]] on selected models in China, "factory-installed".<ref>[http://direct2Dell.com/one2one/archive/2007/08/07/23816.aspx Linux for Consumers in the U.K. France, and Germany; Dell/Red Hat Solutions & More - Direct2Dell<!-- Bot generated title -->]</ref> |
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On November 30, 2007 Dell reported shipping 40,000 Ubuntu PCs.<ref>{{cite web|url=http://www.channelregister.co.uk/2007/11/30/ubuntu_Dell_sales/ |title=Dell moves 40,000 Ubuntu PCs |author=Ashlee Vance |publisher=Channel Register |date=2007-11-30 |url-status=dead |archive-url=https://web.archive.org/web/20091009013710/http://www.channelregister.co.uk/2007/11/30/ubuntu_dell_sales/ |archive-date=October 9, 2009 }}</ref> |
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On January 24, 2008, Dell in Germany, Spain, France, and the United Kingdom launched a second laptop, an XPS M1330 with [[Ubuntu (operating system)|Ubuntu]] 7.10, for 849 euro or GBP 599 upwards.<ref>{{cite web|url=https://www.engadget.com/2008/01/24/Dells-xps-m1330-with-ubuntu-pre-load-in-germany-only/ |title=Dell's XPS M1330 with Ubuntu pre-load in Germany, only |publisher=Engadget |date=2008-01-24 |
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}}</ref> |
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On February 18, 2008, Dell announced that the [[Dell Inspiron 1525|Inspiron 1525]] would have Ubuntu as an optional operating system.<ref>{{cite web | url = https://blog.dell.com/en-us/welcome-the-inspiron-1525-to-the-dell-ubuntu-family/ | title = Welcome the Inspiron 1525 to the Dell Ubuntu Family | last = Judd | first = Daniel | date = 18 February 2008 | website = dell.com | publisher = Dell | access-date = 12 November 2017 | quote = Earlier today, we added the Inspiron 1525 notebook to our family of Ubuntu products.}}</ref> On February 22, 2008, Dell announced plans to sell Ubuntu in Canada and in [[Latin America]]<ref>{{cite web|url=http://tombuntu.com/index.php/2008/02/22/ubuntu-Dell-systems-launch-in-canada/|title=Ubuntu Dell Systems Launch in Canada |publisher=Tombuntu |date=2008-02-22}}</ref> |
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From September 16, 2008, Dell has shipped both [[Dell Ubuntu Netbook Remix]] and [[Windows XP]] Home versions of the [[Dell Inspiron Mini 9|Inspiron Mini 9]] and the [[Dell Inspiron Mini 12|Inspiron Mini 12]]. {{As of | November 2009}} Dell ships the Inspiron Mini laptops with Ubuntu version 8.04.<ref>{{cite web|url=http://www.Dell.com/home/laptops#subcats=&navla=51800~0~1932545&navidc=LT:%20Operating%20System&navValc=Ubuntu%20Linux&a=51800~0~1932545&page=1 |title=Laptops, Ultrabooks ™ & Tablets - New Dell Laptop Computers for Sale |publisher=Dell |access-date=2012-12-04}}</ref> |
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== Personnel == |
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On January 31, 2007, [[Michael Dell]] returned to the company as CEO. As chairman of the board, Michael Dell had significant input into the company's operations during Rollins' years as CEO. However, with the return of Michael Dell as CEO, the company saw immediate changes in operations, the exodus of many senior vice-presidents and new personnel brought in from outside the company. |
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Michael Dell announced a number of initiatives and plans (part of the "Dell 2.0" initiative) to improve the company's financial performance. These include elimination of 2006 bonuses for employees with some discretionary awards, reduction in the number of managers reporting directly to Michael Dell from 20 to 12, and reduction of "[[bureaucracy]]." |
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On April 23, 2008, Dell announced the closure of one of its biggest Canadian call-centers in [[Kanata, Ontario]], terminating approximately 1100 employees, with 500 of those redundancies effective on the spot, and with the official closure of the center scheduled for the summer. The call-center had opened in 2006 after the city of [[Ottawa]] won a bid to host it. Less than a year later, Dell Inc. planned to double its workforce to nearly 3,000 workers and to add a new building. Journalists cited a high [[Canadian dollar]] and suggested high pay-rates as among the reasons for the cuts.<ref>{{cite news |
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|author1 = Seggewiss, Krista |
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|author2 = Hill, Bert |
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|title = The Dell dream dies |
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|work = The Ottawa Citizen |
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|url = http://www.canada.com/ottawacitizen/news/story.html?id=d399d387-df1f-4400-8274-1c45879f8ed2 |
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|date = 2008-04-24 |
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|access-date = 2009-05-27 |
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|quote = The Ottawa centre is closing because Dell can't justify paying $18 per hour with the Canadian and American currencies at parity. The relatively high pay, benefits and training opportunities separated Dell from other call centres ... |
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|archive-url = https://web.archive.org/web/20090126202553/http://www.canada.com/ottawacitizen/news/story.html?id=d399d387-df1f-4400-8274-1c45879f8ed2 |
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|archive-date = 2009-01-26 |
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|url-status = dead |
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}}</ref> |
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The company had also announced the shutdown of its [[Edmonton, Alberta]] office, losing 900 jobs. In total, Dell announced the ending of about 8,800 jobs in 2007-2008 — 10% of its workforce.<ref>{{cite news|author = Gollner, Phillip|title = UPDATE 1-Dell to cut nearly 900 jobs, close Canada center|publisher= Reuters|url = https://www.reuters.com/article/companyNews/idUSN3134850320080131|date = 2008-01-31}}</ref> On January 8, 2009 Dell announced the closure of its manufacturing plant in Limerick, Ireland with the loss of 1,900 jobs and the transfer of production to its plant in Poland. |
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==List of Dell marketing slogans== |
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* '''Be direct''' (1998-2001) |
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* '''Easy as Dell''' (2001-2004) |
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* '''Get more out of now''' (2004–2005) |
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* '''It's a Dell''' (2005-2006) |
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* '''Dell. Purely You''' (2006–2007) |
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* '''Yours is Here''' (2007–2011) |
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* '''The power to do more''' (2011–present)<ref>{{cite web | url=https://www.forbes.com/sites/dell/2011/09/15/the-power-to-do-more/#747592471a39 | title=How does technology ignite your power to do more? | first=Karen | last=Quintos | work=[[Forbes Magazine]] | date=September 15, 2011}}</ref> |
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==See also== |
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*[[List of Dell ownership activities]] |
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==References== |
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{{reflist|colwidth=30em}} |
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==Further reading== |
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* {{Cite book|last1=Dell|first1=Michael|last2=Fredman|first2=Catherine|date=2000|title=Direct from Dell: Stategies that revolutionized an industry |
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|publisher=Harper Business|edition=fully revised|isbn=9780887309151|oclc=636165955|ol=8198026M}} |
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* {{cite book|last1=Holzner|first1=Steven|date=2006|title=How Dell does it |
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|publisher=McGraw-Hill|isbn=9780072262544|oclc=1131549883|ol=7302649M}} |
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[[Category:Dell]] |
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[[Category:History of computer companies|Dell]] |
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[[Category:History of companies of the United States|Dell]] |
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