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[[Image:Michael Dell, square crop.jpg|thumb|left|[[Michael Dell]], Founder of Dell.]]
[[Image:Michael Dell, square crop.jpg|thumb|left|[[Michael Dell]], Founder of Dell.]]


=== Origins and evolution ===
We like to sell generic computers.

While a student at the [[University of Texas at Austin]] in 1984, [[Michael Dell]] founded the company as ''PC's Limited'' with just $1000<ref>{{cite book | last = Dell | first = Michael | authorlink = Michael Dell | coauthors = Catherine Fredman | title = Direct from DELL | publisher = [[HarperCollins]] | date = 1999 | pages = pp. 13 | isbn = 0-88730-914-3 }}</ref>. Operating from Michael Dell's off-campus dorm room at [[Dobie Center]] [http://www.dell.com/downloads/global/corporate/speeches/msd/2003_05_17_msd_commencement.pdf], 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. Michael Dell dropped out of school in order to focus full-time on his fledgling [[business]].

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&nbsp;MHz. PC's 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|model]], PC's Limited became one of the first to succeed with it. The company [[gross profit|grossed]] more than $73 million in its first year.

In 1989, 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 June 1988, Dell's market capitalization grew by $30 million to $80 million from its [[initial public offering]] of 3.5 million shares at $8.50 a share. The company changed its name to "Dell Computer [[Corporation]]" in 1988.

In 1990, Dell Computer Corporation 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.

In 1996, Dell began selling computers via its web site.

In 1999, Dell overtook [[Compaq]] to become the largest seller of [[personal computers]] in the [[United States|United States of America]] with $25 billion in revenue reported in January 2000.

In 2002, Dell attempted to expand by tapping into the multimedia and home-entertainment markets with the introduction of [[television]]s, handhelds, and [[digital audio player]]s. Dell has also produced Dell-brand printers for home and small-office use.

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.

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 [[Chairman of the Board]]. Kevin B. Rollins, who had held a number of executive posts at Dell, was appointed the new CEO.

In 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)|''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 had 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. The CEO, Kevin Rollins, attributed the bad performance partially to Dell's focus on low-end PCs.

In 2006, Dell purchased the computer hardware manufacturer [[Alienware]]. 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= [[March 23]], [[2006]] | publisher=BusinessWeek | url=http://www.businessweek.com/technology/content/mar2006/tc20060323_034268.htm }}</ref>

On [[January 31]], 2007, Kevin B. Rollins, CEO of the company since 2004, resigned abruptly as both CEO and as a director, and Michael Dell returned as CEO. Investors and many shareholders had called for Rollins' resignation because of poor company performance. At the same time, the company announced that, for the fourth time in five quarters, earnings would fail to reach consensus analyst-estimates.

In February 2007, Dell became the subject of formal investigations by the US [[United States Securities and Exchange Commission|SEC]]
<ref> http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9002535&source=rss_news50 </ref>
and the US Attorney General for the Southern District of [[New York]].
<ref> [http://www.theage.com.au/news/Technology/Michael-Dell-founder-and-chairman-reprises-CEO-role-at-Dell/2007/02/01/1169919438424.html]
</ref>
The company has not formally filed financial reports for either the third or fourth fiscal quarter of 2006, and several class action lawsuits
<ref>
http://www.dallasnews.com/sharedcontent/APStories/stories/D8N1MLNO0.html
</ref>
in the wake of its [[as of 2007|recent]] financial performance. The company's lack of formal financial disclosure would normally subject the company to de-listing from the [[NASDAQ]],
<ref>
http://www.crn.com/showArticle.jhtml?articleID=193004297
</ref>
but the exchange has granted Dell a waiver, allowing the stock to trade normally.
<ref>
http://www.crn.com/sections/breakingnews/dailyarchives.jhtml?articleId=196903036
</ref>

On [[1 March]], 2007, the company issued a preliminary quarterly earnings report which showed 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>[http://www.thestreet.com/_yahoo/newsanalysis/techhardware/10341935.html</ref>


=== Dell and AMD ===
=== Dell and AMD ===

Revision as of 19:59, 14 September 2007

This article is about the corporation Dell, Inc.. For other topics, see Dell (disambiguation).
Dell, Incorporated
Company typePublic (Nasdaq: DELL SEHK: 4331)
IndustryComputer hardware
FoundedAustin, Texas (November 4,1984) (as "PC's Limited")
Headquarters
Round Rock, Texas
,
United States of America
Key people
Michael Dell, Founder and CEO
Don Carty, CFO
ProductsDesktops
Servers
Notebooks
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
78,000[citation needed]
SubsidiariesAlienware
Websitewww.dell.com

Dell Inc. (Nasdaq: DELL SEHK: 4331), an American computer-hardware company based in Round Rock, Texas, develops, manufactures, sells and supports personal computers, servers, data storage devices, network switches, personal digital assistants (PDAs), software, televisions, computer peripherals and other technology-related products. As of 2006, Dell employed more than 78,700 people worldwide. Formerly holding a substantial lead in sales of PCs and of servers[citation needed], the company recently slipped behind Hewlett-Packard (HP) in these markets[citation needed].

In 2006, Fortune magazine ranked Dell as the 25th-largest company in the Fortune 500 list, 8th on its annual Top 20 list of the most-admired companies in the United States. A 2006 publication identified Dell as one of 38 high-performance companies in the S&P 500, which consistently out-performed the market over the previous 15 years.[1]

History

Michael Dell, Founder of Dell.

Origins and evolution

While a student at the University of Texas at Austin in 1984, Michael Dell founded the company as PC's Limited with just $1000[2]. Operating from Michael Dell's off-campus dorm room at Dobie Center [6], 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. Michael Dell dropped out of school in order to focus full-time on his fledgling business.

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. PC's 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 model, PC's Limited became one of the first to succeed with it. The company grossed more than $73 million in its first year.

In 1989, 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 June 1988, Dell's market capitalization grew by $30 million to $80 million from its initial public offering of 3.5 million shares at $8.50 a share. The company changed its name to "Dell Computer Corporation" in 1988.

In 1990, Dell Computer Corporation 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 1996, Dell began selling computers via its web site.

In 1999, Dell overtook Compaq to become the largest seller of personal computers in the United States of America with $25 billion in revenue reported in January 2000.

In 2002, Dell attempted to expand by tapping into the multimedia and home-entertainment markets with the introduction of televisions, handhelds, and digital audio players. Dell has also produced Dell-brand printers for home and small-office use.

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.

In 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 July, Michael Dell stepped aside as Chief Executive Officer while retaining his position as Chairman of the Board. Kevin B. Rollins, who had held a number of executive posts at Dell, was appointed the new CEO.

In 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 had 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. The CEO, Kevin Rollins, attributed the bad performance partially to Dell's focus on low-end PCs.

In 2006, Dell purchased the computer hardware manufacturer Alienware. Dell Inc.'s plan anticipated Alienware continuing to operate independently under its existing management. Alienware expected to benefit from Dell's efficient manufacturing system.[3]

On January 31, 2007, Kevin B. Rollins, CEO of the company since 2004, resigned abruptly as both CEO and as a director, and Michael Dell returned as CEO. Investors and many shareholders had called for Rollins' resignation because of poor company performance. At the same time, the company announced that, for the fourth time in five quarters, earnings would fail to reach consensus analyst-estimates.

In February 2007, Dell became the subject of formal investigations by the US SEC [4] and the US Attorney General for the Southern District of New York. [5] The company has not formally filed financial reports for either the third or fourth fiscal quarter of 2006, and several class action lawsuits [6] in the wake of its recent financial performance. The company's lack of formal financial disclosure would normally subject the company to de-listing from the NASDAQ, [7] but the exchange has granted Dell a waiver, allowing the stock to trade normally. [8]

On 1 March, 2007, the company issued a preliminary quarterly earnings report which showed 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. [9]

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

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

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

Dell and desktop Linux

First attempt in 2000

In 1998, Ralph Nader asked Dell (and 5 other major OEMs) to offer alternate operating systems to Microsoft Windows, specifically including Linux, for which "there is clearly a growing interest"[10][11] Dell started offering Linux notebook systems which "cost no more than their Windows 98 counterparts" in 2000,[12] and soon expanded, with Dell becoming "the first major manufacturer to offer Linux across its full product line"[13] But by early 2001 Dell had "disbanded its Linux business unit".[14]

The reason(s) for such a quick reversal remain the subject of debate. Court documents accused Microsoft of coercing OEMs to drop Linux:

Microsoft executive Joachim Kempin described his plan of retaliation and coercion to shut down competition from Linux: "I am thinking of hitting the OEM harder than in the past with anti-Linux actions" and will "further try to restrict source code deliveries where possible and be less gracious when interpreting agreements — again without being obvious about it," continuing "this will be a delicate dance"[15]

While in a 2003 interview Michael Dell denied that Microsoft pressured Dell Inc. into doing an about-face with regard to desktop Linux, citing a lack of sales: "unfortunately the desktop Linux market didn't develop in volume. It's more of a server opportunity" but adding: "We continue to offer Linux on the desktop and there is nothing else to say."[16] However, a 2004 report noted that Dell no longer offered preinstalled desktop Linux:

So what does it mean "factory installed Linux"? If you want Dell to install Linux for you, first add on $119. But here is the annoying part. They won't send you a computer with Linux pre-installed. They sell you the computer and the boxes of software on the side, and then they make an appointment to send you someone who comes to your house or business and installs it there.[17]

Second attempt in 2007

On February 26 Dell announced that it had commenced a program to sell and distribute a range of computers with pre-installed Linux distributions instead of Microsoft Windows. Dell indicated that Novell's SUSE Linux would appear first.[18] 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.[19] 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.[20] On April 18, 2007 a report appeared to indicate that Michael Dell used Ubuntu Linux on one of his home systems.[21] On May 1, 2007, Dell announced it will ship the Ubuntu Linux distribution.[22] 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.[23]

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 IdeaStorm site supported extending the bundles beyond the US market, Dell later announced more international marketing[24]. 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". Dell recently announced that it would offer Novell's SUSE Linux Enterprise Desktop on selected models in China, "factory-installed". [25]

Michael Dell's return

On January 31, 2007 Michael Dell returned to the company as CEO. As chairman of the board, Mr. 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 blood brought in from outside the company.

Departures announced include:

  • Kevin Rollins, CEO[26]
  • James Schneider, CFO[27]
  • John Medica, senior vice president, consumer products[28]
  • Joe Marengi, senior vice president, Americas[29]
  • John Hamlin, senior vice president, worldwide online operations[30]
  • Paul McKinnon, senior vice president, human resources[31]
  • Rosenda Parra, senior vice president/general manager, home & small business group[32]
  • Glenn E. Neland, senior vice president, procurement[33]

Additions announced include:

  • Michael Dell, CEO and co-Chairman of the Board (previously Chairman of the Board)
  • Don Carty, CFO and co-Chairman of the Board (previously Board member)
  • Michael R. Cannon, former CEO of Solectron, as President, Global Operations[34]
  • Ron Garriques, who formerly headed Motorola's mobile phone unit, as President, Global Consumer Group[35]
  • Stephen F. Schuckenbrock, Senior Vice President, Global Services[36]

Mr. 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 Mr. Dell from 20 to 12
  • in a noted departure from previous years, "build, partner, and buy" to increase services capabilities
  • reduction of "bureaucracy"

Dell, Inc. appears to have re-focussed on reduced costs rather than on innovation, in line with the company's history of delivering units at the lowest cost possible via its direct-sales model. In an interview with Business Week, Mr. Dell stated "this is a company which can execute quite a bit better on things it already knows how to do."[37]

Products

A typical Dell-based home workstation: note the black keyboard, black flat-screen monitor and black tower.

Scope and brands

The corporation markets specific brand names to different market segments:

  • Business Class: including OptiPlex, Latitude, and Precision, where the company's advertising emphasizes long life-cycles, reliability and serviceability:
  • Home/Consumer Class: including Dimension, Inspiron, and XPS brands, emphasizing value, performance and expandability:
  • Peripherals: Dell has also diversified its product line to include peripheral products such as USB keydrives, LCD televisions, and printers.
  • Services and support:
  • Dell On Call - extended support services (mainly for the removal of spyware and of viruses)
  • Dell Solution Center - extended support services similar to Dell On Call for EMEA customers.
  • Dell Business Support - a service contract (for a fee) that provides an industry-certified technician with a lower call-volume than in normal queues. Covers hardware, and some software support.
  • Discontinued Products:

Manufacturing

Dell has a general policy of manufacturing its products close to their customers, implementing Just in Time (JIT) Manufacturing. Assembly for desktop computers for the North American market takes place at Dell plants in Lebanon, Tennessee, Austin, Texas, and Winston-Salem, North Carolina[citation needed]; with servers built in Austin, Texas.

Dell assembles computers for the EMEA market in Limerick in the Republic of Ireland, and employs about 4,500 people in that country. European Manufacturing Facility 1 (EMF1, opened in 1990) and EMF3 form part of the Raheen Industrial Estate near Limerick. EMF2 (previously a Wang facility, later occupied by Flextronics, situated in Castletroy) closed in 2002, and Dell Inc has consolidated production into EMF3 (EMF1 now contains only offices[39]). Construction of EMF4 in Łódź, Poland has started, with production planned to start there in autumn 2007.[40]

Dell's assembly-plants in Malaysia, China assemble 95% of Dell notebooks. Dell Inc has invested an estimated 60 million US Dollars in a new manufacturing unit in Chennai, India, to support the sales of its products in the Indian Subcontinent. Indian-made products will bear the "Made in India" mark on them. In 2007 the Chennai facility has the target of producing 400,000 desktop PCs, and in the later half of 2007 it will start producing notebook PCs and other products.[citation needed]


Technical support

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

Dell Inc brands its service-agreements at four levels:

  1. Basic
  2. Silver
  3. Gold
  4. Platinum Plus

Regardless of the level of service-agreement, Dell's agents rigorously follow a specific troubleshooting procedure. Controversy has developed around this area when knowledgeable computer users have already troubleshot the equipment and know the source of the problem. Since Dell policy requires the technicians to always follow this procedure, resolution-time can take longer than expected. Some IT departments have even calculated times to place Dell agents on hold when callers are required to perform tests that customer-staff have already carried out prior to calling.

To reduce costs[citation needed], Dell began moving technical support offshore, however this has resulted in quality of service concerns.

At Dell's higher levels of support, benefits can purportedly include shorter wait-times, faster time-to-resolution, and better-experienced support-technicians. While Dell has added call-center staff in North America, it still routes the majority of service-support calls to India and to the Philippines.

Service Tags

Dell Inc associates a Service Tag, a unique alpha-numeric identifier, with most of its products, this resembles a serial number. Given numerous different made-to-order PCs, the company needs a way to identify systems in its database in order to provide support for them. The service-tag number, represented in Base 36, has a length of five or seven characters. The service tag can be read by software in the hardware's DMI table.

Dell, Inc. does not tag its monitors. Monitors bought as part of a system get support via the tag of the system itself. Monitors bought separately get support via the Dell Order Number or via the monitor's serial number.

DellConnect

The DellConnect program, a remote-access tool, gives technicians within Dell Support the ability to access customer computers from a remote location for troubleshooting purposes. By utilizing this tool, support-technicians can analyze the configuration of a system, view and edit its files and software environment, view and comment on the screen, or take control of the system (with the customer's approval) for troubleshooting purposes.

Recently, Dell Inc replaced its proprietary remote-access tool with the newer DellConnect 2.0www.dellconnect.com manufactured by Citrix. Once installed by the customer, this software can permit a support-technician to view and work on their computer from a remote location. This permits the technician to work virtually at a customer's computer, without requiring physical attendance. As with the previous version, release 2.0 has a feature of letting the technician reboot the system remotely and continuing the same session. Version 2.0 adds the functionality of being able to copy information from the technician's clipboard and paste it to the customer's clipboard. This makes redirecting a user to a long website (for example) very easy.

World-wide technical support

In the Americas, Dell has customer-contact centers in Edmonton, Alberta; Ottawa, Ontario; Central Texas; Salt Lake City, Utah; Nashville, Tennessee; Chesapeake; Roseburg, Oregon; Twin Falls, Idaho; Oklahoma City, Okla; San Salvador, El Salvador; as well as Glace Bay, Nova Scotia and Panama City, Panama.

In the Asia-Pacific region Dell provides customer-support from Pasay City, Philippines; Penang, Malaysia; and Xiamen and Dalian, China. Dell recently opened its second Philippines site in Quezon City. [41]

In India, Dell has customer-support centers in the northern cities of Gurgaon and Mohali; and in the southern cities of Hyderabad and Bangalore. [42]

Commercial aspects

Business-model

Dell sells all its products both to end-use consumers and to 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. Dell also practices just-in-time (JIT) inventory-management, profiting from its attendant benefits. Dell’s JIT approach utilizes the “pull” system by building computers only after customers place orders and by requesting materials from suppliers as needed. In this way Dell mirrors Toyota by following Toyota Way Principle #3 ("Use 'pull' systems to avoid overproduction"). Since the days of the original dominance of telephone-ordering, the Internet has significantly enhanced Dell’s business-model, making it easier for customers and potential customers to contact Dell directly. This model also has enabled Dell to provide very customizable systems at an affordable rate, since Dell manufacturing builds specifically for each customer. Other computer-manufacturers, including Gateway and Hewlett-Packard, have attempted to adapt[citation needed] this same business-model, but due to timing and/or retail-channel pressures[citation needed] they have not achieved the same results as Dell.

Organization

A Board of Directors of nine people runs the company. Michael Dell, the founder of the company, serves on the board. Other board members include Don Carty, William Gray, 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 proposed mergers and acquisitions; the Governance and Nominating Committee, which handles various corporate matters (including nomination of the board); and the Antitrust Compliance Committee, which attempts to prevent company practices from violating antitrust laws.

The corporate structure and management of Dell extends beyond the board of directors. The Dell Global Executive Management Committee sets the strategic direction for how the corporation keeps customers at the forefront, from designing and manufacturing computer systems to offering products that meet customers' requirements to providing sufficient service and support. Dell has regional senior vice presidents for countries other than the United States, including David Marmonti for EMEA and Stephen J. Felice for Asia/Japan. As of 2007, other officers include Martin Garvin (senior vice president for worldwide procurement) and Susan E. Sheskey (vice president and chief information officer).

Marketing

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. In 2006, Dell cut its prices in an effort to maintain its 19.2% market share. However, this also cut profit-margins by more than half, from 8.7 to 4.3 percent. To maintain its low prices, Dell continues to accept most purchases of its products via the Internet and through the telephone network, and to move its customer-care division to India and El Salvador. [43]

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!"

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).

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.

In 2007 Dell switched advertising agencies in the US from BBDO to Mother.[citation needed] In July 2007, Dell released new advertising created by Mother to support the Inspiron and XPS lines. The ads featured music from the Flaming Lips and Devo who re-formed especially to record the song in the ad "Work it Out".

Dell Kiosks

Dell Direct Store, Brisbane, Australia

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 method of shopping to using the Internet or the telephone-system. Despite the added expense, prices at the kiosks match or beat prices available through other retail channels. Starting in 2005, Dell expanded kiosk locations to include shopping malls across Australia, Canada and Hong Kong.

Dell Stores

In 2006, Dell Inc. opened a full store in Northpark Center in Dallas, Texas. It operates the 3,000-square-foot Dallas outlet seven days a week to display about 36 models, including PCs and televisions. As at the kiosks, customers can only see demonstration-computers and place orders through agents. Dell then delivers purchased items just as if the customer had placed the order over the phone or Internet.

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.[citation needed] In addition to showcasing products, the store also supports on-site warranties and non-warranty service ("Dell on Call"). Services offered include repairing computer video-cards and removing spyware from hard drives.

Environmental Responsibility

Dell became the first company in the information technology industry to establish a product recycling goal (in 2004) and completed the implementation of its global consumer recycling program in 2006.[44] On February 6, 2007, the National Recycling Coalition awarded Dell its "Recycling Works" award for efforts to promote producer responsibility.[45] On July 19, 2007, Dell announced that it had exceeded targets in working to achieve a multi-year goal of recovering 275 million pounds of computer equipment by 2009.[46] The company reported the recovery of 78 million pounds (nearly 40,000 tons) of IT equipment from customers in 2006, a 93-percent increase over 2005; and 12.4% of the equipment Dell sold seven years earlier.[47]

On June 5, 2007, Dell set a goal of becoming the greenest technology company on Earth for the long term. The company launched a zero-carbon initiative that includes:

  1. Reducing Dell's carbon intensity by 15 percent by 2012
  2. Requiring primary suppliers to report carbon emissions data during quarterly business reviews
  3. Partnering with customers to build the "greenest PC on the planet"
  4. Expanding the company's carbon-offsetting program, "Plant a Tree for Me".

The company introduced the term "The Re-Generation" during a round table in London commemorating 2007 World Environment Day. "The Re-Generation" refers to people of all ages throughout the world who want to make a difference in improving the world's environment. Dell also talked about plans to take the lead in setting an environmental standard for the "technology industry" and maintaining that leadership in the future.

Competition

Dell's major competitors include Apple, Hewlett-Packard, Sun Microsystems, Gateway, Lenovo, Sony, Acer, Toshiba and Asus. Dell and its subsidiary, Alienware, compete in the enthusiast market against Falcon Northwest, Voodoo PC (a division of HP), and other manufacturers. In the second quarter of 2006, Dell had between 18% and 19% share of the worldwide personal-computer market, compared to Hewlett-Packard with roughly 15%. By leveraging its business-model, Dell attempts to undercut competitors and offer customers a more attractive choice of personal computers and other equipment.

Dell in late 2006 lost its once-substantial lead in the PC business to Hewlett-Packard. Both Gartner and IDC estimated that in the third quarter of 2006, HP shipped more units world-wide than did Dell. Dell's 3.6% growth paled in comparison to HP's 15% growth during the same period. The problem got worse in the fourth quarter, when Gartner estimated that Dell PC shipments declined 8.9% (versus HP's 23.9% growth). As a result, at the end of 2006 Dell's overall PC market share stood at 13.9% (versus HP's 17.4%).

IDC has also reported that Dell lost more server market share than any of the top four competitors in that arena. IDC's Q4 2006 estimates show Dell's share of the server market at 8.1%, down from 9.5% in the previous year. This represents a 8.8% loss year-over-year, primarily to competitors EMC and IBM.[48]

"Shut down Apple"

Dell conducted a public war-of-words with Apple CEO Steve Jobs, starting when Jobs first criticized Dell for making "un-innovative beige boxes". On October 5, 1997, when asked what he would do if he owned then-troubled Apple Computer, Michael Dell said "I'd shut it down and give the money back to the shareholders."[49]

  • In 2005, Dell began the construction of a facility in Winston-Salem, North Carolina. [50]Many claims emerged that Dell had used unfair practices to obtain huge incentives.[51]Dell fought a lawsuit which the court system later dismissed.[52]
  • In October 2005, Dell filed a lawsuit in a Paris court to sue Menorca-based independent website-designer Paul Dell "Dellimages" for engaging in “parasitism and unfair competition”. This related to his company website "DellWebsites".
  • On February 8, 2007, seven current and former workers at a call-center in Roseburg, Oregon sued the computer-maker, saying the company worked its sales reps "off the clock", failed to provide proper rest-breaks and improperly recorded their lunch-periods.[53] Moves have begun to turn the case into a class action.
  • In March 2007 an article titled "Computer Giant Faces Consumer Lawsuit Consumers Allege They Didn't Get the Tech Support They Paid For" appeared on ABC News website [7]

"Part of the suit claims that though Dell gave the impression of an "award-winning service" available to consumers "24 hours a day, seven days a week," consumers faced "nightmarish obstacles" to get help and technical service for their computers. New York Attorney General Andrew Cuomo said that New York had received 700 complaints about Dell — more than the number of complaints for any other related subject."

  • In May 2007, Andrew Cuomo filed a lawsuit against Dell for "false advertising and deceptive business practices, including offering misleading financing, and failing to honor rebates, warranties and service contracts." [8] Dell spokesman Bob Pearson portrayed the lawsuit as based on only a small portion of Dell's customers and as in no way reflecting the way the company treats its customers. Dell's hardware-warranty contract says that customers must troubleshoot over the phone — including possibly opening the computer — before Dell will send a technical service provider to replace a part.

SEC investigation

On August 17 2007, the company announced that after an internal investigation into its accounting practises[54] it would restate and reduce earnings from 2003 through to the first quarter of 2007 by a total amount of between $50 million and $150 million, or 2 cents to 7 cents per share.

The investigation, begun in November 2006, resulted from concerns raised by the U.S. Securities and Exchange Commission over some documents and information that Dell Inc. had submitted.[55].

Criticisms

File:Dell laptop burnt by bad Sony lithium-ion battery.jpg
Dell laptop burnt by bad Sony lithium-ion battery

In the 1990s Dell switched from using primarily ATX motherboards and PSU, to using boards and power-supplies with mechanically-identical but differently-wired connectors.[56][57]

In 2005, according to the Better Business Bureau, complaints about Dell more than doubled, to 1,533.

Consumer complaints about the quality of customer-service mounted, and in 2006, Dell acknowledged that it had problems with customer service. Issues included call transfers[58]of more than 45% of calls and long wait-times. Dell's blog detailed the response[59]: "We’re spending more than a $100 million — and a lot of blood, sweat and tears of talented people — to fix this." Later in the year, the company increased its spending on customer service to $150 million.[60]

See also

Wikimedia Commons has media related to Dell.

Citations

References

Dell's with Ubuntu called Dellbuntu

Notes

  1. ^ Frigo, Mark L, Needles, Belvard E and Marian Powers: "Strategy and Integrated Financial Ratio Performance Measures: Further Evidence of the Financial Performance Scorecard and High Performance Companies". Studies in Managerial and Financial Accounting Volume 16, (2006)
  2. ^ Dell, Michael (1999). Direct from DELL. HarperCollins. pp. pp. 13. ISBN 0-88730-914-3. {{cite book}}: |pages= has extra text (help); Unknown parameter |coauthors= ignored (|author= suggested) (help)
  3. ^ Lee, Louise (March 23, 2006). "Dell Goes High-end and Hip". BusinessWeek. {{cite news}}: Check date values in: |date= (help)
  4. ^ http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9002535&source=rss_news50
  5. ^ [1]
  6. ^ http://www.dallasnews.com/sharedcontent/APStories/stories/D8N1MLNO0.html
  7. ^ http://www.crn.com/showArticle.jhtml?articleID=193004297
  8. ^ http://www.crn.com/sections/breakingnews/dailyarchives.jhtml?articleId=196903036
  9. ^ [http://www.thestreet.com/_yahoo/newsanalysis/techhardware/10341935.html
  10. ^ James Love (Information Policy Notes) (March 8, 1998). "Nader/CPT ask OEMs to offer OS alternatives"". {{cite web}}: |author= has generic name (help); Check date values in: |year= (help)
  11. ^ Consumer Project on Technology (Internet Archive from November 6, 2002). "CPT's Microsoft Antitrust Page".{{cite web}}: CS1 maint: numeric names: authors list (link)
  12. ^ Dan Neel (CNN) (February 3, 2000). "Dell offers Linux on laptops". {{cite web}}: |author= has generic name (help); Check date values in: |year= (help)
  13. ^ Michael Dell (August 15, 2000). "Michael Dell Remarks/Putting Linux on the Fast Track/Keynote at the LinuxWorld Expo"" (PDF). {{cite web}}: Check date values in: |year= (help)
  14. ^ Andrew Orlowski (The Register) (March 19, 2002). "Microsoft 'killed Dell Linux' – States". {{cite web}}: Check date values in: |year= (help)
  15. ^ Plaintiffs' Modified Fourth Amended Petition (February 8, 2006). "Joe Comes, et al vs Microsoft Corporation" (PDF). {{cite web}}: Check date values in: |year= (help)
  16. ^ Ashlee Vance (InfoWorld) (January 14, 2003). "Interview: Dell eyes Linux future despite desktop retreat". {{cite web}}: Check date values in: |year= (help)
  17. ^ Pamela Jones (Groklaw) (September 20, 2004). "Standards, Dell and Microsoft". {{cite web}}: Check date values in: |year= (help)
  18. ^ http://www.itwire.com.au/content/view/9951/53/
  19. ^ Computerworld (February 27, 2007). "Dell to Linux users: Not so fast"". {{cite web}}: Check date values in: |year= (help)
  20. ^ http://www.dell.com/content/topics/global.aspx/ideastorm/ideasinaction?c=us&l=en&s=gen
  21. ^ Steven J. Vaughan-Nichols (DesktopLinux) (April 18, 2007). "Michael Dell's Linux choice? Ubuntu". {{cite web}}: Check date values in: |year= (help)
  22. ^ BBC (May 1, 2007). "Dell to choose Ubuntu"". {{cite web}}: Check date values in: |year= (help)
  23. ^ http://direct2dell.com/one2one/archive/2007/05/24/15994.aspx http://linux.dell.com/
  24. ^ http://direct2dell.com/one2one/archive/2007/06/27/19470.aspx
  25. ^ http://direct2dell.com/one2one/archive/2007/08/07/23816.aspx
  26. ^ http://www.crn.com/sections/dell/dell.jhtml?articleId=197002299
  27. ^ http://www.crn.com/sections/dell/dell.jhtml?articleId=197002299
  28. ^ http://www.statesman.com/business/content/business/stories/technology/02/14/14dell.html
  29. ^ http://www.statesman.com/business/content/business/stories/technology/02/14/14dell.html
  30. ^ http://biz.yahoo.com/bizj/070214/1417329.html?.v=3
  31. ^ http://www.statesman.com/business/content/business/stories/technology/02/14/14dell.html
  32. ^ http://www.statesman.com/business/content/business/stories/technology/02/17/17dell.html
  33. ^ http://www.nytimes.com/2007/02/17/business/17dell.html?em&ex=1171947600&en=89394cd8cc59606c&ei=5087%0A
  34. ^ http://www.statesman.com/blogs/content/shared-gen/blogs/austin/theticker/index.html
  35. ^ Gollner, Philipp (2007-02-16). "Dell hires Motorola executive for consumer unit". SAN FRANCISCO (Reuters). Reuters.com. Retrieved 2007-06-22. {{cite news}}: Check date values in: |date= (help); Unknown parameter |coauthors= ignored (|author= suggested) (help)
  36. ^ http://www.nytimes.com/2007/02/17/business/17dell.html?em&ex=1171947600&en=89394cd8cc59606c&ei=5087%0A
  37. ^ http://www.businessweek.com/technology/content/jan2007/tc20070131_257826.htm?chan=search
  38. ^ Direct2Dell.com
  39. ^ http://www.blythe.org/nytransfer-subs/2000ire/IEP:_The_IE_Professional_No.250_5-17
  40. ^ http://www1.euro.dell.com/content/topics/topic.aspx/emea/corporate/pressoffice/2006/uk/en/2006_09_18_brk_000?c=uk&l=en&s=corp
  41. ^ http://www.allheadlinenews.com/articles/7006608869
  42. ^ http://ipcommunications.tmcnet.com/news/2006/10/06/212847.htm
  43. ^ http://www.dell.com/content/topics/global.aspx/corp/pressoffice/en/2007/2007_03_20_ndi_000?c=us&l=en&s=corp
  44. ^ http://www.socialfunds.com/news/article.cgi/1421.html
  45. ^ http://www.nrc-recycle.org/recyclingworkswinners.aspx National Recycling Coalition
  46. ^ http://biz.yahoo.com/ap/070719/tx_dell_recycling.html?.v=1
  47. ^ http: http://www.dell.com/content/topics/global.aspx/corp/pressoffice/en/2007/2007_07_19_rr_001?c=us&l=en&s=corp Dell Inc.
  48. ^ http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070312:MTFH05034_2007-03-12_21-17-33_N12385967&type=comktNews&rpc=44
  49. ^ CNet
  50. ^ http://www.findarticles.com/p/articles/mi_m0EIN/is_2005_Oct_25/ai_n15732802
  51. ^ http://www.theregister.co.uk/2005/06/23/dell_nc_suit
  52. ^ http://www.newsobserver.com/104/story/438280.html
  53. ^ http://atwork.blogs.oregonlive.com/uploads/487501-dellsuit.pdf
  54. ^ Lipton, Joshua (2007-08-17). "Dell's Investigation Comes To a Close". Forbes. Retrieved 2007-08-19.
  55. ^ Darlin, Damon (2006-11-16). "Dell Accounting Inquiry Made Formal by S.E.C." The New York Times. Retrieved 2007-08-19.
  56. ^ [2]
  57. ^ Mueller, Scott. Upgrading and Repairing PCs, 13ed, Indianapolis: Que Publications, 2002, ISBN 0789725428, and subsequent editions
  58. ^ [3]
  59. ^ [4]
  60. ^ [5]

Official sites

Customer Complaints

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