(NASDAQ:DELL)
Contact Information
Dell Inc.
1 Dell Way
Round Rock, TX 78682
TX Tel. 512-338-4400
Toll Free 800-289-3355

Type: Public
On the web: http://www.dell.com
Employees: 109,400
Employee growth: 5.9%

Dell's name rings from the desktop to the data center. The world's #3 supplier of PCs (behind #1 HP and China-based #2 Lenovo), the company provides a broad range of technology products for the consumer, education, enterprise, and government sectors. In addition to its line of desktop and notebook PCs, Dell offers network servers, data storage systems, printers, Ethernet switches, and peripherals, such as displays and projectors. It also markets third-party software and hardware. The company's services unit provides asset recovery, financing, infrastructure consulting, support, systems integration, and training, as well as hosted IT services. Dell generates more than half of its revenues outside of the US.

Key numbers for fiscal year ending January, 2012:
Sales: $62,071.0M
One year growth: 0.9%
Net income: $3,492.0M
Income growth: 32.5%

Officers:
Chairman and CEO: Michael S. Dell
Vice Chairman and President, Global Operations and End User Computing Solutions: Jeffrey W. (Jeff) Clarke
SVP and CFO: Brian T. Gladden

Competitors:
Acer
Hewlett-Packard
Lenovo

Dell

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Incorporated: 1984 as Dell Computer Corporation
NAIC: 334111 Electronic Computer Manufacturing; 334112 Computer Storage Device Manufacturing; 334119 Other Computer Peripheral Equipment Manufacturing; 454110 Electronic Shopping and Mail-Order Houses

Long the world's largest direct-sale computer vendor, Dell Inc. is now also the leading seller of computer systems in the world, capturing a global market share of more than 15 percent. Dell markets desktop personal computers, notebook computers, network servers, workstations, handheld computers, monitors, printers, high-end storage products, and a variety of computer peripherals and software. The firm also has moved into the consumer electronics arena, offering LCD televisions, projectors, and other products. Dell manufactures most of the products it sells, maintaining six production facilities worldwide, located in Austin, Texas; Nashville, Tennessee; Eldorado do Sul, Brazil; Limerick, Ireland; Penang, Malaysia; and Xiamen, China. About two-thirds of revenues are generated in the Americas, with 22 percent originating in Europe, the Middle East, and Africa and with the Asia-Pacific region accounting for the remaining 11 percent. Dell sells its equipment directly to consumers, small to large businesses, government agencies, and healthcare and educational institutions through dedicated sales representatives, telephone-based sales, and online via the company web site. Founder Michael Dell holds 12 percent of the company and will remain chairman of the company after stepping down as CEO in July 2004.

Dell was founded by Michael Dell, who started selling personal computers out of his dorm room as a freshman at the University of Texas in Austin. Dell bought parts wholesale, assembled them into clones of IBM computers, and sold them by mail order to customers who did not want to pay the higher prices charged by computer stores. The scheme was an instant success. He was soon grossing $80,000 a month, and in 1984 he dropped out of school, incorporating his business as Dell Computer Corporation (though it would initially do business as PC's Limited).

At the time, the PC industry was dominated by such large firms as IBM, while smaller, lesser known mail-order firms sold IBM clones at a steep discount. Dell used low-cost direct marketing to undersell the better known computers being sold through such high-overhead dealer networks. Dell placed ads in computer magazines, gearing his merchandise to buyers who were sophisticated enough to recognize high-quality merchandise at low prices. Customers placed orders to Dell by dialing a toll-free number. As a result of these methods, Dell's computers became the top brand name in the direct-mail market.

Dell achieved sales of $6 million its first full year in business, approaching $40 million the next year. Dell hired former investment banker E. Lee Walker as president in 1986 to help deal with his firm's explosive growth. By 1987 Dell held a dominant position in the mail-order market, but it was clear that the firm had to move beyond mail order if it was to continue growing. To accomplish this goal the firm needed a larger professional management staff, and Dell hired a group of marketing executives from Tandy Corporation, another maker of low-cost PCs. The group built a sales force able to market to large corporations and put together a network of value-added resellers, who assembled packages of computer components to sell in specialized markets.

The Tandy team soon helped raise gross margins to 31 percent, up from 23 percent a year earlier. Rather than merely undercutting the prices of competitors, they set prices in relation to the firm's costs. The new marketing department soon ran into trouble with Michael Dell, however. Battles erupted over advertising budgets and the number of salespeople required for corporations and resellers. While Dell believed that the new team did not understand direct selling and was trying to create a traditional marketing department with an overly large sales force, the Tandy group alleged that Dell lacked the patience to wait for the sales force to pay off. By early 1988, most of the Tandy group had resigned or been forced out.

Regardless, the firm continued growing rapidly, opening a London office that sold $4 million worth of computers during one month in 1988. Dell also formed a Canadian subsidiary. Early in 1988 the firm formed various divisions to raise its profile among corporate, government, and educational buyers. With reported sales of $159 million in 1987, the firm went public in June 1988, selling 3.5 million shares at $8.50 a share.

The firm faced several challenges, however. Announcing their own clone of IBM's new PS/2 computer system well before it was actually ready, Dell later had trouble reproducing important aspects of the PS/2's architecture, and the computers were delayed significantly, embarrassing the young company. Furthermore, Dell faced competition from several Japanese manufacturers, which were offering IBM clones at low prices. Further, having had trouble meeting demand, Dell used money raised from its stock offering to expand capacity and warehouse space, leaving the company with little cash. When it overestimated demand during the fourth quarter of 1988, the firm suddenly had no cash and warehouses full of unsold computers.

Dell responded to the increasing competition by increasing the level of technical sophistication in its computers. Half of its 1988 sales came from PCs using the Intel Corporation's 80386 microprocessor, the most powerful PC chip at the time, and the company began producing file servers using the sophisticated Unix operating system. Dell also hired computer scientist Glenn Henry away from IBM to work on product development. Scrapping the company's first attempts at cloning IBM's PS/2, Henry initiated new plans for producing clones. Henry built Dell's research and development staff from almost nothing to 150 engineers, who began working on ways to combine the function of several chips onto one chip. When Intel released its 486 microprocessor, Dell began speeding to market the computers that could use it. Another of Henry's goals was high-quality graphics, which required better monitors and special circuit boards. By mid-1989 Dell had finished initial attempts at graphics hardware, giving it inroads into the higher end of the PC market.

Despite these advances, Dell still had a research and development budget of $7 million, compared with the hundreds of millions spent by such larger competitors as IBM. Dell's share of the PC market was only 1.8 percent, but it was still growing rapidly. U.S. sales for 1989 reached $257.8 million, while sales in Britain increased to $40 million and a branch in Western Germany realized the break-even point.

Dell considered itself as much a marketing company as a hardware company, and its sales staff played an important role in its successes. Dell's sales personnel trained for six weeks or more before taking their seats at the phonebanks, and, along with their managers, they held weekly meetings to discuss customer complaints and possible solutions. In addition to fielding questions and taking orders, sales staff were trained to promote products. They helped buyers customize orders, selling them more memory or built-in modems. Orders were then sent to Dell's nearby factory where they were filled within five days. The telemarketing system also allowed Dell to compile information on its customers, helping the firm spot opportunities and mistakes far more quickly than most other PC companies.

In 1990 Dell set up subsidiaries in Italy and France as well as a manufacturing center in Limerick, Ireland, to serve customers in Europe, the Middle East, and Africa. It also began selling some computers through large computer stores, whose high-volume, low-margin strategy complemented Dell's established operations. The firm was making important corporate inroads as well, developing client/server computing systems with Andersen Consulting, for example, and introducing powerful servers using the Unix operating system. As a result, 40 percent of Dell's $546 million in 1990 sales came from the corporate world, up from 15 percent in 1987. Dell became the sixth largest PC maker in the United States--up from number 22 in 1989--and retained a staff of 2,100. Furthermore, the company's emphasis on customer satisfaction paid off, as it was rated number one in J.D. Powers Associates' first survey of PC customer satisfaction.

That year, however, Dell purchased too many memory chips and was forced to abandon a project to start a line of workstations. As a result, 1990 profits fell 65 percent to $5 million, despite the doubling of the firm's sales.

Also during this time, the traditional PC market channels were in flux. With a recession dampening sales, PC makers engaged in a furious price war that resulted in slumping profits nearly across the board. Compaq, IBM, and Apple all had profit declines or were forced to lay off employees. Furthermore, Compaq filed a lawsuit against Dell, which it eventually won, claiming that Dell's advertising made defamatory statements against Compaq. Nevertheless, the economic recession actually benefited Dell. While customers had less money, they still needed PCs, and they purchased Dell's inexpensive but technologically innovative IBM clones in record numbers. Consequently, annual sales shot up toward $1 billion.

In the early 1990s, notebook-sized computers were the fastest growing segment of the PC market, and Dell devoted resources to producing its first notebook model, which it released in 1991. The following year it introduced a full-color notebook model and also marketed PCs using Intel's fast 486 microchip.

As the PC wars continued, Compaq, which had been a higher priced manufacturer stressing its quality engineering, repositioned itself to take on Dell, releasing a low-end PC priced at just $899 and improving its customer services. The new competition affected Dell's margins, forcing it to cut its computer prices by up to $1,400 to keep its market share. Dell could afford such steep price cuts because its operating costs were only 18 percent of revenues, compared with Compaq's 36 percent. The competition also forced Dell away from its attempts to stress its engineering. Dell executives began speaking of computers as consumer products similar to appliances, downplaying the importance of technology. Reflecting this increased stress on marketing, Dell began selling a catalogue of computer peripherals and software made by other companies; it soon expanded into fax machines and compact discs. Dell's database, containing information on the buying habits of more than 750,000 of its customers, was instrumental in this effort.

Toward the end of 1992 Dell's product line experienced technological difficulties, particularly in the notebook market. In 1993 quality problems forced the firm to cancel a series of notebook computers before they were even introduced, causing a $20 million charge against earnings. The firm was projected to hold a 3.5 percent share of the PC market in 1993, but Digital Equipment Corporation, whose focus was minicomputers, nevertheless topped Dell as the biggest computer mail-order company. To fight back against Compaq's inexpensive PC line, Dell introduced its Dimensions by Dell line of low-cost PCs. Sales for the year reached $2 billion, and Dell made a second, $148 million stock offering.

During the early 1990s Dell also attempted a foray into retail marketing, the most popular venue with individual consumers. In 1990 Dell placed its products in Soft Warehouse Superstores (later renamed CompUSA) and in 1991 they moved into Staples, a discount office supply chain. Dell agreed to allow the stores to sell the products at mail-order prices, a policy that soon caused Dell a lot of grief. The value of existing computers on store shelves plummeted whenever Dell offered a new computer through its direct sales, and Dell had to compensate retailers for that loss. With its direct sales channel, Dell had never had inventories of old computers that it could not sell, because each of those computers was made specifically to fill a consumer's order. Dell abandoned the retail market late in 1993.

With price wars continuing, Dell cut prices again in early 1993 and extended the period of its warranty. Increased competition and technical errors had hurt Dell, however, and despite growing sales, the firm announced a quarterly loss in excess of $75 million in 1993, its first loss ever. Dell attributed many of the problems to internal difficulties caused by its incredible growth. It responded by writing down PCs based on aging technology and restructuring its notebook division and European operations.

Like most of its competitors, Dell was hurt by an industrywide consolidation taking place in the early 1990s. The consolidation also offered opportunity, however, as Dell fought to win market share from companies going out of business. Dell moved aggressively into markets outside of the United States, including Latin America, where Xerox began to sell Dell computers in 1992. By 1993, 36 percent of Dell's sales were abroad. That year, Dell entered the Asia-Pacific region by establishing subsidiaries in Australia and Japan.

After a loss of $36 million in 1994, Dell rebounded spectacularly, reporting profits of $149 million in 1995. That year, the company introduced Pentium-based notebook computers and a popular dual-processor PC. The company grew by almost 50 percent that year and the next, raising its market share to approximately 4 percent and entering the company into the ranks of the top-five computer sellers in the world.

Expansion continued on many fronts in 1996. Dell introduced a line of network servers and was soon the fastest-growing company in that sector. The company also opened a manufacturing facility in Penang, Malaysia. The most important development that year, however, was Dell's expansion into selling directly to consumers over the Internet. Within three years, Dell was selling $30 million a day over the Internet, which would come to account for 40 percent of the company's overall revenue. Dell achieved enviable efficiencies using the Internet to coordinate the orders of consumers with its own orders of parts from suppliers. The company's web site also provided technical support and allowed consumers to track their orders from manufacturing through delivery.

Dell continued its exponential growth in 1997 and 1998, reaching profits of $944 million in 1998. The company introduced new products and services, including a line of workstations, a leasing program for individual consumers, and a line of storage products under the PowerVault brand. Dell also expanded its manufacturing facilities in the United States and in Europe. In 1998 it established a production and customer center in Xiamen, China, raising the number of its overseas plants to three. By the time Dell sold its ten millionth computer in 1997, it was a close fourth behind IBM, Hewlett-Packard, and Compaq in the computer industry. By mid-1998, it had captured 9 percent of the market and the number two spot.

Following on the success of its direct sales over the Internet, Dell opened an online superstore of computer-related products in 1999. Gigabuys.com offered low-priced computer hardware, software, and peripherals from various companies in the industry, although Dell continued to sell its own products at www.dell.com. The company also expanded its Internet offerings in 1999 with Dellnet, an Internet access service for Dell customers. Two more manufacturing facilities were added to the firm's global production network that year, located in Nashville, Tennessee; and Eldorado do Sul, Brazil. For the fiscal year ending in January 2000, Dell reported net income of $1.86 billion on total revenues of $25.26 billion.

When the global PC industry fell into its worst slump ever during 2000, Dell responded by initiating a price war to which its rivals were slow to respond, providing Dell with a chance to further increase its market share. As a result, by 2001 Dell managed to gain for the first time the top spot globally in PC sales, with a 13 percent worldwide share. The downturn also triggered the creation of a more formidable competitor in the form of Hewlett-Packard, which acquired Compaq during this period. Dell also responded to the PC slump by aggressively pushing into the market for Internet servers, a more profitable sector than that of PCs. It launched another price war on the low end of the server market, which cut into its margins somewhat but enabled it to gain share. Dell targeted other higher-margin sectors as well. It continued its push into the storage market in late 2001 by entering into an alliance with EMC Corporation to develop a new line of data-storage systems, and it entered the market for low-end networking gear used by small businesses, launching its PowerConnect line of network switches in 2001. Finally, Dell stayed solidly in the black--while its rivals were losing money--via a major cost-cutting program. The company made the first significant layoffs in its history, slashing 5,700 jobs from the payroll during 2001 and taking nearly $600 million in charges relating to restructuring actions. The charges reduced profits, but Dell still managed to record net income of $1.78 billion on revenues of $31.17 billion for 2002.

Although Michael Dell remained firmly in charge of the company he had founded as chairman and CEO, Kevin B. Rollins was increasingly taking over the day-to-day operations at Dell Computer and had been instrumental in the maneuvers that had enabled the company to gain ground on its rivals during the industry slump. Rollins had consulted for Dell while employed with the consulting firm Bain & Company, before joining Dell in 1996 as a senior vice-president. He was named vice-chairman in 1997 and then became president and chief operating officer in 2001. Rollins's assumption of the operating reins enabled Michael Dell to concentrate more on long-range, strategic planning.

Continuing to seek new avenues for growth--as it aimed to double revenues to $60 billion by fiscal 2007--Dell Computer diversified further. During 2002 the company entered the handheld computer market by launching its Axim line of personal digital assistants (PDAs). Early in 2003 it debuted its own line of printers aimed at both businesses and consumers. Later that year Dell gained a toehold in the cutthroat consumer electronics industry by introducing LCD flat-panel televisions, digital music players, and an online music service. With businesses keeping a tight rein on their PC spending, Dell in 2002 attempted to gain further sales from consumers by setting up kiosks at shopping malls where customers could see and try out Dell computers, printers, and other products before placing their orders online or by phone. Early in 2003, in a trial run, the company set up its first Dell store-within-a-store inside of a Sears, Roebuck & Company outlet.

The corporation's widening interests took a quite concrete form in mid-2003 through the shortening of the firm's name to simply Dell Inc. Dell's diversification, coupled with large increases in shipments of high-profit-margin products such as servers, notebook computers, and storage equipment, propelled the company to new heights in 2004. Net income surged 25 percent that year, hitting $2.65 billion, while revenues jumped 17 percent, to $41.44 billion. Soon after these stellar results were released, Michael Dell, the person with the longest-running tenure as CEO of a major U.S. computer company, announced that he would relinquish his CEO title to Rollins in July 2004 but would remain actively involved in the company as chairman. With a smooth transition in leadership expected, it appeared likely that Dell would maintain its leadership position in computer systems and also continue to pursue its growth ambitions in the wider computer industry and into the realm of consumer electronics.

Principal Operating Units

Dell Americas; Dell Asia Pacific - Japan; Dell Europe, Middle East and Africa.

Principal Competitors

Hewlett-Packard Company; International Business Machines Corporation; Apple Computer, Inc.; Gateway, Inc.; Sun Microsystems, Inc.

Further Reading

"Dell Computer: Selling PCs Like Bananas," Economist, October 5, 1996.

Dell, Michael, with Catherine Fredman, Direct from Dell: Strategies That Revolutionized an Industry, New York: HarperBusiness, 1999.

Forest, Stephanie Anderson, "PC Slump? What PC Slump?," Business Week, July 1, 1991, p. 66.

Holstein, William J., "Dell: One Computer, Two CEOs," CEO Magazine, November 2003, pp. 30-35.

Jones, Kathryn, "Bad News for Dell Computer," New York Times, July 15, 1993, p. C3.

Kelly, Kevin, "Dell Computer Hits the Drawing Board," Business Week, April 24, 1989, p. 138.

------, "Michael Dell: The Enfant Terrible of Personal Computers," Business Week, June 13, 1988, p. 61.

Koehn, Nancy F., "Michael Dell," in Brand New: How Entrepreneurs Earned Consumers' Trust from Wedgwood to Dell, Boston: Harvard Business School Press, 2001, pp. 259-305.

McCartney, Scott, "Michael Dell--and His Company--Grows Up," Wall Street Journal, January 31, 1995, p. B1.

McWilliams, Gary, "Dell Pins Hopes on Services to Boost Profit," Wall Street Journal, November 11, 2003, p. B1.

------, "Dell's Founder to Step Down As CEO," Wall Street Journal, March 5, 2004, p. A10.

------, "Dell's New Push: Cheaper Laptops Built to Order," Wall Street Journal, June 17, 1999, p. B1.

------, "System Upgrade: Dell Looks for Ways to Rekindle the Fire It Had As an Upstart," Wall Street Journal, August 31, 2000, p. A1.

Morris, Betsy, "Can Michael Dell Escape the Box?," Fortune, October 16, 2000, pp. 92-96+.

Park, Andrew, Faith Keenan, and Cliff Edwards, "Whose Lunch Will Dell Eat Next?," Business Week, August 12, 2002, pp. 66-67.

Park, Andrew, and Peter Burrows, "Dell, the Conqueror: Now the King of Cutthroat Pricing Is Looking Beyond PCs," Business Week, September 24, 2001, pp. 92-93+.

------, "What You Don't Know About Dell," Business Week, November 3, 2003, pp. 76-82+.

"Personal Computers: Didn't Delliver," Economist, February 20, 1999.

Pope, Kyle, "For Compaq and Dell Accent Is on Personal in the Computer Wars," Wall Street Journal, July 2, 1993, p. A1.

Roth, Daniel, "Dell's Big New Act," Fortune, December 6, 1999, pp. 152-54, 156.

Serwer, Andy, "Dell Does Domination," Fortune, January 21, 2002, pp. 70-75.

"You'll Never Walk Alone," Economist, June 26, 1999.

— Scott M. Lewis


Top

R&B vocal group

Along with the Four Tops, the Isley Brothers, and the O’Jays, the Dells—second only to the Four Tops in terms of longevity—are one of R&B music’s most venerable and truly original groups. Still performing more than four decades since their formation and undergoing only one personnel change in their entire professional career, this vocal quintet from the Chicago area embodied a timeless sound that influenced generations of artists, from white entertainers in the 1950s and 1960s to hip-hop and R&B stars in the 1990s. The rap group Dru Hill, for one, covered the Dells’ signature song "The Love We Had (Stays On My Mind)" on their 1998 album Enter the Dru. In addition to that 1971 hit, the Dells recorded numerous other popular songs, among them "Give Your Baby a Standing Ovation," "Stay in My Corner," and "Oh, What a Night." Through the years, the Dells—weathering stylistic shifts from doo-wop and soul to disco—released 19 albums and 44 singles, including three gold albums, seven gold singles, and 25 charted Top 40 hits.

Formed in 1952 in Harvey, Illinois, a suburb just south of Chicago, the group originally called themselves the El Rays. Back then the lineup consisted of Marvin Junior, Johnny Funches, Verne Allison, Charles (Chuck) Barksdale, Michael (Mickey) McGill, and Mickey’s

brother, Lucius McGill. After honing their skills harmonizing on street corners, the six vocalists, then students at Thornton Township High School, auditioned in nearby Chicago for Leonard Chess of Chess Records, who shuffled the sextet into the studio to record a single for his Checker imprint label. In 1954, the group released their first record, "Darling I Know," with the song "Christine" on the flipside.

"Darling I Know" became a regional hit, but not long afterward, Lucius McGill quit the El Rays. Deciding to continue as a quintet, the remaining members hooked up with Harvey Fuqua of the Moonglows, who took the young men under his wing and schooled them on five-part vocal harmony. Soon, the quintet arrived at a striking style, with Junior’s warm, earnest baritone serving as the group’s focal point. In 1955, upon signing with the pioneering R&B/pop/blues label Vee-Jay Records, the El Rays changed their name to the Dells.

The Dells’ first two singles for Vee-Jay, "Tell the World" and "Dreams of Contentment," went largely overlooked. But "Oh, What a Night," an original written by Funches and Junior, soared to number four on the Billboard R&B chart at the end of 1956 and was also a favorite on pop radio. This was an unusual achievement for African Americans pursuing musical careers during the 1950s, an era that saw black artists not only dealing with racial segregation in public, but on the sales charts as well. "They used to call that race music," recalled Barksdale in an interview with Ebony magazine writer Joy Bennett Kinnon, "and they refused to play it on the pop stations." Furthermore, most black groups received little income for their work. By the late 1950s, the Dells were only earning about $14 a piece per week, despite their rising popularity. However, the Dells were motivated by music, not money. "Back then we had youth on our side," said McGill. Nevertheless, the singer admitted, "We have been through an awful lot in our tumultuous career. It was a real struggle."

After the release of two regional hits, "Why Do You Have to Go," and "Pain in My Heart," a car accident injured most of the members of the Dells, resulting in a two-year absence. When they recovered in 1960, Funches opted not to return. His replacement, tenor Johnnie Carter, was a former member of the Flamingos, a group remembered for the hits "I’ll Be Home" and "I Only Have Eyes for You." Carter’s mesmerizing falsetto, backing Junior’s earthshaking lead, would also contribute to the soul group’s trademark sound.

Reunited, the Dells cut another regional hit, "Bossa Nova Bird," for the Chess subsidiary Argo Records before returning to Vee-Jay. In 1965, with the aid of producer/music director Curt Stewart, the Dells released the album It’s Not Unusual, hoping to get a head start on the Tom Jones version of the title track about to be issued in the United States. Although Jones made "It’s Not Unusual" a hit instead of the Dells, the vocal quintet scored in the summer of 1965 with the dreamy classic "Stay in My Corner."

Soon thereafter, Vee-Jay folded, and the Dells returned to Chess in the summer of 1966 and began working with producer Billy Davis and arranger Phil Wright. Two singles, "Thinking About You" and "Run for Cover" were released. By now, however, soul had replaced doo-wop as the new R&B sound. Therefore, in the summer of 1967, Chess moved the Dells to the imprint label Cadet Records and teamed the group with staff producer Bobby Miller and arranger Charles Stepney. The Dells, intending to move more in the direction of soul, appeared to adapt without effort. In late 1967, the Dells returned with the hit single "O-O, I Love You," and in March of 1968 released their career-making album There Is. The title track single release, backed with the Motown-inspired "Show Me," climbed to number 11 on the R&B chart and number 20 on the pop chart, and the album rose all the way to number 29 on the pop chart by the summer.

More hits were still to come. Also in the summer of 1968, a six-minute remake of "Stay in My Corner," became a number one R&B hit and a number ten pop hit. In the fall, "Always Together," reached number three on the R&B chart and number 18 on the pop chart. The following year, the Dells’ success on the charts continued with the medley "I Can Sing a Rainbow"/"Love Is Blue," a number five R&B hit, and a remake of "Oh, What a Night," a number one R&B hit. Both songs appeared on the quintet’s 1969 LP Love Is Blue. The Dells 1970 album, Like It Is, Like It Was, spawned the hit singles "Open Up Your Heart" and "Long Lonely Nights." Their 1971 album, Freedom Means, produced by Stepney since Miller had left Chess for Motown, yielded the hit singles "The Love We Had (Stays on My Mind)" and "It’s All Up to You."

After recording two more LPs with Stepney—The Dells Sing Dionne Warwick’s Greatest Hits, released in May of 1972, and Sweet As Funk Can Be, released in November of 1972—the Dells switched to Detroit producer Don Davis, who produced the group’s certified gold single "Give Your Baby a Standing Ovation" off the album of the same name. The song peaked at number three on the R&B chart and number 34 on the pop chart. Other top-selling, Davis-produced singles included "My Pretending Days Are Over" and "I Miss You," both in 1973, and "I Wish it Was Me You Loved," "Learning to Love You Was Easy (It’s So Hard Trying to Get Over You)," and "Bring Back the Love of Yesterday," all three from the 1974 album The Mighty Mighty Dells.

The Dells signed with Mercury Records in 1975 after Chess folded. For Mercury, the quintet recorded the following LPs: 1975’s We Got to Get Our Thing Together (the title track reached number 17 on the R&B chart), 1976’s No Way Back (which included the hit "Slow Motion’), and 1977’s They Said It Couldn’t Be Done But We Did It (which spawned the number 20 R&B hit "Our Love"). In 1978, the group changed labels again to ABC Records, for whom they recorded 1978’s New Beginnings, yielding the hit "Superwoman," and 1979’s Face to Face.

In 1980, the Dells signed with Chi-Sound Records, owned by producer Carl Davis, who had a distribution deal with 20th Century Records. With Davis’s label, the Dells recorded the LPs I Touched a Dream (the title track reached number 17 on the R&B chart), released in 1980 and Whatever Turns You On, released in 1981. Continuing to record for various labels for the remainder of the 1980s, the Dells met with Davis again to record The Second Time for his Urgent! label in 1991. The album included a cover of the Baby Washington song "That’s How Heartaches Are Made."

That same year, the Dells were the subject of the Robert Townsend film The Five Heartbeats, released by 20th Century Fox that spring. Originally, the actor/comedian/director had set out to make a comedy about black vocal stand-up groups. However, after Junior informed him that there was nothing funny about the racism, harassment, and financial hardships that blacks in the business had to endure, Townsend, who traveled with the Dells for six weeks to make the film, changed his script, arriving with a more poignant and historically accurate film. The Dells song for the soundtrack, "A Heart Is a House for Love," went to number 13 on the R&B chart, giving the quintet their first Top 20 R&B hit in more than eleven years.

In 1992, the Dells recorded a new album, I Salute You, for the Zoo/BMG label. Since then, they remain active on the tour circuit, selling out shows nationwide. Several compilations have been issued in tribute to the Dells, including Anthology, a two-CD, 36-track retrospective released by Hip-O/Universal in November of 1999. The Dells have earned many honors for their achievements, among them a Rhythm & Blues Foundation Pioneer Hall of Fame Award, an NAACP Image Award, and a Soul of American Music Award.

Selected discography
It’s Not Unusual, Vee-Jay, 1965.
There Is, Chess, 1968.
The Dells, Chess, 1969.
Love Is Blue, Cadet, 1969.
Like It Is, Like It Was, Cadet, 1970.
Oh, What a Night, Vee-Jay, 1970.
Freedom Means, Cadet, 1971.
Sweet As Funk Can Be, Cadet, 1972.
Give Your Baby a Standing Ovation, Cadet, 1973.
The Mighty Mighty Dells, Chess, 1974.
We Got to Get Our Thing Together, Mercury, 1975.
No Way Back, Mercury, 1976.
They Said It Couldn’t Be Done But We Did It, Mercury, 1977.
New Beginnings, ABC, 1978.
Face to Face, ABC, 1979.
I Touched a Dream, 20th Century, 1980.
Whatever Turns You On, 20th Century, 1981.
The Second Time, Urgent!, 1991.
I Salute You, Zoo/BMG, 1992.
Anthology, Hip-O/Universal, 1999.

Sources
Periodicals
Billboard, November 27, 1999.
Ebony, July 1997.

Online
All Music Guide, http://www.allmusic.com (September 19, 2000).
Dell, Inc.
Type Public
Traded as NASDAQDELL
SEHK4331
NASDAQ-100 Component
S&P 500 Component
Industry Computer hardware, Computer software, IT consulting, IT services
Founded Austin, Texas, U.S.
(November 4, 1984 (1984-11-04))
Founder(s) Michael Dell
Headquarters 1 Dell Way, Round Rock,
Texas
, United States[1]
Area served Worldwide
Key people Michael Dell
(Chairman & CEO)
Products Desktops, netbooks, notebooks, peripherals, servers, printers, scanners, smartphones, storages, televisions
Revenue increase US$ 62.07 billion (2012)[2]
Operating income increase US$ 04.43 billion (2012)[2]
Net income increase US$ 03.49 billion (2012)[2]
Total assets increase US$ 44.53 billion (2012)[2]
Total equity increase US$ 08.91 billion (2012)[2]
Employees 100,300 (2011)[2]
Subsidiaries Alienware, Dell Services, Force10, SonicWall
Website Dell.com

Dell, Inc. (NASDAQDELL) is an American multinational computer technology corporation based in 1 Dell Way, Round Rock, Texas, United States, that develops, sells and supports computers and related products and services. Bearing the name of its founder, Michael Dell, the company is one of the largest technological corporations in the world, employing more than 103,300 people worldwide.[2] Dell is listed at number 41 in the Fortune 500 list.[3] It is the third largest PC maker in the world after HP and Lenovo.[4]

Dell has grown by both increasing its customer base and through acquisitions since its inception; notable mergers and acquisitions including Alienware (2006) and Perot Systems (2009). As of 2009, the company sold personal computers, servers, data storage devices, network switches, software, and computer peripherals. Dell also sells HDTVs, cameras, printers, MP3 players and other electronics built by other manufacturers. The company is well known for its innovations in supply chain management and electronic commerce.

Fortune Magazine listed Dell as the sixth largest company in Texas by total revenue.[5] It is the second largest non-oil company in Texas – behind AT&T – and the largest company in the Austin, Texas area.[6]

Contents

History

Dell traces its origins to 1984, when Michael Dell created PCs Limited while a student at the University of Texas at Austin. The dorm-room headquartered company sold IBM PC-compatible computers built from stock components.[7] Dell dropped out of school in order to focus full-time on his fledgling business, after getting about $300,000 in expansion-capital from his family.

In 1985, the company produced the first computer of its own design, the "Turbo PC", which sold for US$795.[8] PCs Limited advertised its systems in national computer magazines for sale directly to consumers and custom assembled each ordered unit according to a selection of options. The company grossed more than $73 million in its first year of operation.

The company changed its name to "Dell Computer Corporation" in 1988 and began expanding globally. In June 1988, Dell'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.[9] In 1992, Fortune magazine included Dell Computer Corporation in its list of the world's 500 largest companies, making Michael Dell the youngest CEO of a Fortune 500 company ever.[citation needed]

Growth in 1990s and early 2000s

From 1997 to 2004, Dell enjoyed steady growth and it gained market share from competitors even during industry slumps.[10]

In 1996, Dell began selling computers through its website, and in 2002, it expanded its product line to include televisions, handhelds, digital audio players, and printers. Dell's first acquisition occurred in 1999 with the purchase of ConvergeNet Technologies.

Dell surpassed Compaq to become the largest PC manufacturer in 1999. In 2002, when Compaq merged with Hewlett Packard (the 4th place PC maker), the combined Hewlett Packard took the top spot but struggled and Dell soon regained its lead.

In 2003, the company was rebranded as simply "Dell Inc." to recognize the company's expansion beyond computers.

In 2004, Michael Dell resigned as CEO while retaining the title of Chairman, handing the CEO title to Kevin Rollins who was the President and COO. Under Rollins, Dell began to loosen its ties to Microsoft and Intel, the two companies which were responsible for Dell's dominance in the PC business. During that time, Dell acquired Alienware, which introduced several new items to Dell products, including AMD microprocessors. To prevent cross-market products, Dell continues to run Alienware as a separate entity, but still a wholly owned subsidiary.[11]

Missed expectations and return of founder

However in 2005, while earnings and sales grew, sales growth slowed considerable, and the company stock lost 25% of its value that year.

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 businesses segments such as storage, services and servers. Dell's price advantage was tied to its ultra-lean manufacturing for desktop PCs, however this became less important as the market shifted to laptops, and as rivals such as Hewlett-Packard and Acer made their PC operations more efficient. 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 lucruative strategy of encouring buyers to upgrade processor or memory), and as a result the company was selling a greater proportion of inexpensive PCs than before which eroded profit margins.[10]

There has also been a decline in consumers purchasing PCs through the Web or on the phone, as increasing numbers were visiting consumer electronics retail stores. As well, 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 Apple Inc.) which worked well in the commoditized PC market prevented it from making inroads into more lucrative segments such as MP3 players.[12]

Dell's reputation for poor customer service, which was exacerbated as it moved call centres offshore and as its growth outstripped its technical support infrastructure, came under increasing scrutiny on the Web. There was also criticism that it used faulty components for its PCs.[13] There was also a battery recall in August 2006, as a result of a Dell laptop catching fire which caused much negative attention for the company, although later Sony was found to be responsible for the faulty batteries.[10]

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 which was invigorated thanks to a restructuring initiated by their CEO Mark Hurd.[12] [14] [15]

After four out of five quarterly earnings reports were below expectations, Rollins resigned in January 2007 and founder Michael Dell assumed the role of CEO again. Dell announced a change campaign called "Dell 2.0," reducing headcount and diversifying the company's product offerings.

Recent plans and acquisitions

  • In 2006, Dell acquired Alienware, a manufacturer of high-end PCs popular with gamers.[16][17][11]
  • The company acquired EqualLogic on January 28, 2008, to gain a foothold in the iSCSI storage market. Because Dell already had an efficient manufacturing process, integrating EqualLogic's products into the company drove manufacturing prices down.[18]
In 2009, Dell acquired Perot Systems, a technology services and outsourcing company, mainly active in the health-sector, founded by former presidential hopeful H. Ross Perot
  • In 2009, Dell acquired Perot Systems, based in Plano, Texas, in a reported $3.9 billion deal.[19] Perot Systems provided Dell with applications development, systems integration, and strategic consulting services through its operations in the U.S. and 10 other countries. In addition, the acquisition of Perot brought a variety of business process outsourcing services, including claims processing and call center operations.[20]
  • On February 10, 2010, the company acquired KACE Networks a leader in Systems Management Appliances. The terms of the deal were not disclosed.[21]
  • On August 16, 2010, Dell announced plans to acquire the data storage company 3PAR.[22] On September 2, Hewlett-Packard offered $33 a share for 3PAR, which Dell declined to match.[23]
  • On November 2, 2010, Dell acquired Software-as-a-Service (SaaS) integration leader Boomi. Terms of the deal were not disclosed.[24]
  • In February 2011 the acquisition of Compellent by Dell was completed after the initial announcement of Dell's intention to buy the company was announced on 13 December, 2010
  • On Friday February 24, 2012 Dell acquired Backup and Disaster Recovery software solution AppAssure Software of Reston, VA. AppAssure delivered 194 percent revenue growth in 2011 and over 3500% growth in the prior 3 years. AppAssure supports physical servers and VMware, Hyper-V and XenServer. The deal represents the first acquisition since Dell formed its software division under former CA CEO John Swainson. Dell added that it will keep AppAssure’s 230 employees and invest in the company.
Dell is headquartered in Round Rock, Texas
  • In March 2012, USA Today said that Dell agreed to buy SonicWall, which acquisition was completed 9th May 2012[25], a company with 130 patents. SonicWall which develops security products, is a network and data security provider[26].
  • On 2 April, 2012, Dell announced that it wants to acquire Wyse, global market-leader for thin client systems[27]
  • On 3 April, 2012, Dell announced that it has acquired Clerity Solutions. Clerity, a company offering services for application (re)hosting, was formed in 1994 and has it headquarters in Chicago. At the time of the take-over aprox. 70 people were working for the company[28].

Dell facilities

Dell's headquarters is located in Round Rock, Texas.[29] As of 2010 the company employs about 16,000 people in the facility,[30] which has 2,100,000 square feet (200,000 m2) of space.[31] As of 1999 almost half of the general fund of the City of Round Rock originates from sales taxes generated from the Dell headquarters.[32]

Dell previously had its headquarters in the Arboretum complex in northern Austin, Texas.[33][34] In 1989 Dell occupied 127,000 square feet (11,800 m2) in the Arboretum complex.[35] In 1990 Dell had 1,200 employees in its headquarters.[33] In 1993 Dell submitted a document to Round Rock officials, titled "Dell Computer Corporate Headquarters, Round Rock, Texas, May 1993 Schematic Design." Despite the filing, during that year the company said that it was not going to move its headquarters.[36] In 1994 Dell announced that it was moving most of its employees out of the Arboretum, but that it was going to continue to occupy the top floor of the Arboretum and that the company's official headquarters address would continue to be the Arboretum. The top floor continued to hold Dell's board room, demonstration center, and visitor meeting room. Less than one month prior to August 29, 1994, Dell moved 1,100 customer support and telephone sales employees to Round Rock.[37] Dell's lease in the Arboretum had been scheduled to expire in 1994.[38]

The company sponsors Dell Diamond, the home stadium of the Round Rock Express, the AAA minor league baseball affiliate of the Texas Rangers major league baseball team

By 1996 Dell was moving its headquarters to Round Rock.[39] As of January 1996 3,500 people still worked at the current Dell headquarters. One building of the Round Rock headquarters, Round Rock 3, had space for 6,400 employees and was scheduled to be completed in November 1996.[40] In 1998 Dell announced that it was going to add two buildings to its Round Rock complex, adding 1,600,000 square feet (150,000 m2) of office space to the complex.[41]

In 2000 Dell announced that it would lease 80,000 square feet (7,400 m2) of space in the Las Cimas office complex in unincorporated Travis County, Texas, between Austin and West Lake Hills, to house the company's executive offices and corporate headquarters. 100 senior executives were scheduled to work in the building by the end of 2000.[42] In January 2001 the company leased the space in Las Cimas 2, located along Loop 360. Las Cimas 2 housed Dell's executives, the investment operations, and some corporate functions. Dell also had an option for 138,000 square feet (12,800 m2) of space in Las Cimas 3.[43] After a slowdown in business required reducing employees and production capacity, Dell decided to sublease its offices in two buildings in the Las Cimas office complex.[44] In 2002 Dell announced that it planned to sublease its space to another tenant; the company planned to move its headquarters back to Round Rock once a tenant was secured.[43] By 2003 Dell moved its headquarters back to Round Rock. It leased all of Las Cimas I and II, with a total of 312,000 square feet (29,000 m2), for about a seven year period after 2003. By that year roughly 100,000 square feet (9,300 m2) of that space was absorbed by new subtenants.[45]

In 2008 Dell switched the power sources of the Round Rock headquarters to more environmentally friendly ones, with 60% of the total power coming from TXU Energy wind farms and 40% coming from the Austin Community Landfill gas-to-energy plant operated by Waste Management, Inc.[31]

Dell facilities in the United States are located in Austin, Texas; Nashua, New Hampshire; Nashville, Tennessee; Oklahoma City, Oklahoma; Peoria, Illinois; Winston-Salem, North Carolina; Eden Prairie, Minnesota (Dell Compellent); and Miami, Florida. Facilities located abroad include Penang, Malaysia; Xiamen, China; Bracknell, UK; Manila, Philippines[46] Chennai, India;[47] Hortolandia and Porto Alegre, Brazil; Bratislava, Slovakia; Łódź, Poland,[48] Panama City in Panama, Dublin and Limerick, Ireland.[49]

The US and India are the only countries which have all of Dell's business functions and provide support globally: Research and Development, manufacturing, finance, analysis, customer care.[50]

Products

Scope and brands

Dell's tagline 'Yours is Here', as seen at their Mall of Asia branch in Pasay City, Philippines

The corporation markets specific brand names to different market segments.

Its Business/Corporate class represent brands where the company advertising emphasizes long life-cycles, reliability, and serviceability. Such brands include:

Dell's Home Office/Consumer class emphasizes value, performance, and expandability. These brands include:

  • Inspiron (budget desktop and notebook computers)
  • Studio (mainstream desktop and laptop computers)
  • XPS (high-end desktop and notebook computers)
  • Studio XPS (high-end design-focus of XPS systems and extreme multimedia capability)
  • Alienware (high-performance gaming systems)
  • Adamo (high-end luxury laptop)
  • Dell EMR (electronic medical records)

Dell's Peripherals class includes USB keydrives, LCD televisions, and printers; Dell monitors includes LCD TVs, plasma TVs and projectors for HDTV and monitors. Dell UltraSharp is further a high-end brand of monitors.

Dell service and support brands include the Dell Solution Station (extended domestic support services, previously "Dell on Call"), Dell Support Center (extended support services abroad), Dell Business Support (a commercial service-contract that provides an industry-certified technician with a lower call-volume than in normal queues), Dell Everdream Desktop Management ("Software as a Service" remote-desktop management),[52] and Your Tech Team (a support-queue available to home users who purchased their systems either through Dell's website or through Dell phone-centers).

Discontinued products and brands include Axim (PDA; discontinued April 9, 2007),[53] Dimension (home and small office desktop computers; discontinued July 2007), Dell Digital Jukebox (MP3 player; discontinued August 2006), Dell PowerApp (application-based servers), and Dell Omniplex (desktop and tower computers previously supported to run server and desktop operating systems).

Manufacturing

From its early beginnings, Dell operated as a pioneer in the "configure to order" approach to manufacturing—delivering individual PCs configured to customer specifications. In contrast, most PC manufacturers in those times delivered large orders to intermediaries on a quarterly basis.[54]

To minimize the delay between purchase and delivery, Dell has a general policy of manufacturing its products close to its customers. This also allows for implementing a just-in-time (JIT) manufacturing approach, which minimizes inventory costs. Low inventory is another signature of the Dell business model—a critical consideration in an industry where components depreciate very rapidly.[55]

Dell's manufacturing process covers assembly, software installation, functional testing (including "burn-in"), and quality control. Throughout most of the company's history, Dell manufactured desktop machines in-house and contracted out manufacturing of base notebooks for configuration in-house.[56] However, the company's approach has changed. The 2006 Annual Report states "we are continuing to expand our use of original design manufacturing partnerships and manufacturing outsourcing relationships." The Wall Street Journal reported in September, 2008 that "Dell has approached contract computer manufacturers with offers to sell" their plants.[57]

Assembly of desktop computers for the North American market formerly took place at Dell plants in Austin, Texas (original location) and Lebanon, Tennessee (opened in 1999), which have been closed in 2008 and early 2009, respectively. The plant in Winston-Salem, North Carolina received $280 million USD in incentives from the state and opened in 2005, but ceased operations in November 2010, and Dell's contract with the state requires them to repay the incentives for failing to meet the conditions.[58][59] It is expected that most of the work that used to take place in Dell's U.S. plants will be transferred to contract manufacturers in Asia and Mexico, or some of Dell's own factories overseas.[60] The Miami, Florida facility of its Alienware subsidiary remains in operation. Dell servers continue to be produced in Austin, Texas.

Dell assembles computers for the EMEA market at Limerick in the Republic of Ireland, and employs about 4,500 people in that country. Dell began manufacturing in Limerick in 1991 and went on to become Ireland's largest exporter of goods and its second-largest company and foreign investor. On January 8, 2009, Dell announced that it would move all Dell manufacturing in Limerick to Dell's new plant in the Polish city of Łódź by January 2010.[61] European Union officials said they would investigate a €52.7million aid package the Polish government used to attract Dell away from Ireland.[62] 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,[citation needed] and Dell Inc. has consolidated production into EMF3 (EMF1 now[when?] contains only offices).[63] Subsidies from the Polish government did keep Dell for a long time.[64]

Dell's Alienware subsidiary also manufactures PCs in an Athlone, Ireland plant. Construction of EMF4 in Łódź, Poland has started: Dell started production there in autumn 2007.[65]

Dell opened plants in Penang, Malaysia in 1995, and in Xiamen, China in 1999. These facilities serve the Asian market and assemble 95% of Dell notebooks. Dell Inc. has invested[when?] an estimated $60 million 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. In 2007 the Chennai facility had the target of producing 400,000 desktop PCs, and plans envisaged it starting to produce notebook PCs and other products in the second half of 2007.[citation needed]

Dell moved desktop and PowerEdge server manufacturing for the South American market from the Eldorado do Sul plant opened in 1999, to a new plant in Hortolandia, Brazil in 2007.[66]

Technical support

Dell routes technical support queries according to component-type and to the level of support purchased:[67]

  1. Basic support provides business-hours telephone support and next business-day on-site support/ Return-to-Base, or Collect and Return Services (based on contracts purchased at point of sale)
  2. Dell ProSupport provides 24x7x365 telephone and online support, a selection of 4 or 6-hour onsite support after telephone-based troubleshooting, and a Mission Critical option with two-hour onsite support, for customers who choose the highest level of support for their most critical hardware assets.[68]

Dell's Consumer division offers 24x7 phone based and online troubleshooting in certain markets such as the United States and Canada. In 2008 Dell redesigned services-and-support for businesses with "Dell ProSupport", offering customers more options to adapt services to fit their needs. Rather than take a one-size-fits-all approach, Dell allows various options for its customers.

In addition, the company provides protection services, advisory services, multivendor hardware support, "how-to" support for software applications, collaborative support with many third-party vendors, and online parts and labor dispatching for customers who diagnose and troubleshoot their hardware. Dell also provides Dell ProSupport customers access to a crisis-center to handle major outages, or problems caused by natural disasters.[69]

Commercial aspects

Organization

The board consists of nine directors. Michael Dell, the founder of the company, serves as chairman of the board and chief executive officer. 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 having 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.

Day to day operations of the company are run by the Global Executive Management Committee which sets strategic direction. 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 included 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.[70]

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 youth 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. It used as a tagline the common term in Internet and gamer slang: "FTW", meaning "For The Win". However, Dell Inc. soon[when?] dropped the campaign.

In the first-person shooter game F.E.A.R. Extraction Point, several computers visible on desks within the game have recognizable Dell XPS model characteristics, sometimes even including the Dell logo on the monitors.

In 2007, Dell switched advertising agencies in the US from BBDO to Working Mother Media. In July 2007, Dell released new advertising created by Working 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". Also in 2007, Dell began using the slogan "Yours is here" to say that it customizes computers to fit customers' requirements.[71]

Dell partner program

In late 2007, Dell Inc. announced that it planned to expand its program to value-added resellers (VARs), giving it the official name of "Dell Partner Direct" and a new Website.[72]

Criticisms of marketing of laptop security

In 2008, Dell received press coverage over its claim of having the world's most secure laptops, specifically, its Latitude D630 and Latitude D830.[73] At Lenovo's request, the (U.S.) National Advertising Division (NAD) evaluated the claim, and reported that Dell did not have enough evidence to support it.[74]

Retail

Dell first opened their retail stores in India.[50]

United States

In the early 1990s, Dell sold its products through Best Buy, Costco and Sam's Club stores in the United States. Dell stopped this practice in 1994, citing low profit-margins on the business. In 2003, Dell briefly sold products in Sears stores in the U.S. In 2007, Dell started shipping its products to major retailers in the U.S. once again, starting with Sam's Club and Wal-Mart. Staples, the largest office-supply retailer in the U.S., and Best Buy, the largest electronics retailer in the U.S., became Dell retail partners later that same year.

Kiosks

Starting in 2002, 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, Singapore and Hong Kong.

On January 30, 2008, Dell shut down all 140 kiosks in the U.S. due to expansion into retail stores.[75]

By June 3, 2010, Dell had also shut down all of its mall kiosks in Australia.[76]

Stores

In 2006, Dell Inc. opened one full store, 3,000-square-foot (280 m2) in area, at NorthPark Center in Dallas, Texas. It operates the retail 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 by phone or over the Internet.

In addition to showcasing products, the stores also support on-site warranties and non-warranty service ("Dell Solution Station"). Services offered include repairing computer video-cards and removing spyware from hard drives.

On February 14, 2008, Dell closed the Service Center in its Dallas NorthPark store and laid off all the technical staff there.[citation needed]

Elsewhere

As of the end of February 2008, Dell products shipped to one of the largest office-supply retailers in Canada, Staples Business Depot. In April 2008, Future Shop and Best Buy began carrying a subset of Dell products, such as certain desktops, laptops, printers, and monitors.

Since some shoppers in certain markets show reluctance to purchase technological products through the phone or the Internet, Dell has looked into opening retail operations in some countries in Central Europe and Russia. In April 2007, Dell opened a retail store in Budapest. In October of the same year, Dell opened a retail store in Moscow.

In the UK, HMV's flagship Trocadero store has sold Dell XPS PCs since December 2007. From January 2008 the UK stores of DSGi have sold Dell products (in particular, through Currys and PC World stores). As of 2008, the large supermarket-chain Tesco has sold Dell laptops and desktops in outlets throughout the UK.

In May 2008, Dell reached an agreement with office supply chain, Officeworks (part of Coles Group), to stock a few modified models in the Inspiron desktop and notebook range. These models have slightly different model numbers, but almost replicate the ones available from the Dell Store. Dell continued its retail push in the Australian market with its partnership with Harris Technology (another part of Coles Group) in November of the same year. In addition, Dell expanded its retail distributions in Australia through an agreement with discount electrical retailer, The Good Guys, known for "Slashing Prices". Dell agreed to distribute a variety of makes of both desktops and notebooks, including Studio and XPS systems in late 2008. Dell and Dick Smith Electronics (owned by Woolworths Limited) reached an agreement to expand within Dick Smith's 400 stores throughout Australia and New Zealand in May 2009 (1 year since Officeworks — owned by Coles Group — reached a deal). The retailer has agreed to distribute a variety of Inspiron and Studio notebooks, with minimal Studio desktops from the Dell range. As of 2009, Dell continues to run and operate its various kiosks in 18 shopping centres throughout Australia. On March 31, 2010 Dell announced to Australian Kiosk employees that they were shutting down the Australian/New Zealand Dell kiosk program.

In Germany, Dell is selling selected smartphones and notebooks via Media Markt and Saturn, as well as some shopping websites.[77]

Competition

Dell's major competitors include Hewlett-Packard (HP), Acer, Toshiba, Gateway, Sony, Asus, Lenovo, IBM, MSI, Samsung, Apple and Sun Microsystems. Dell and its subsidiary, Alienware, compete in the enthusiast market against AVADirect, Falcon Northwest, VoodooPC (a subsidiary 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 HP with roughly 15%.

In late 2006, Dell lost its lead in the PC-business to Hewlett-Packard. Both Gartner and IDC estimated that in the third quarter of 2006, HP shipped more units[dead link] worldwide than Dell did. 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 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.[78]

In 2011, The Brand Trust Report, India study revealed that Dell is ranked as the 27th most trusted brand as compared to Samsung which stood at 5th and HP which ranked 23[79]

Partnership with EMC

The Dell/EMC brand applies solely to products that result from Dell's partnership with EMC Corporation.[citation needed] In some cases Dell and EMC jointly design such products; other cases involve EMC products for which Dell will provide support — generally midrange storage systems, such as fibre channel and iSCSI storage area networks. The relationship also promotes and sells OEM versions of backup, recovery, replication and archiving software.[80]

On December 9, 2008, Dell and EMC announced the multi-year extension, through 2013, of their strategic partnership that began in 2001. In addition, Dell plans to expand its product line-up by adding the EMC Celerra NX4 storage system to the portfolio of Dell/EMC family of networked storage systems, as well as partnering on a new line of de-duplication products as part of its TierDisk family of data-storage devices.[81]

On October 17, 2011, Dell announced officially discontinued reselling all EMC storage products, this put end to 10 years of Partnership.[82]

Environmental record

Dell committed to reduce greenhouse gas emissions from its global activities by 40% by 2015, with 2008 fiscal year as the baseline year.[83] It is listed in Greenpeace’s Guide to Greener Electronics that scores leading electronics manufacturers according to their policies on sustainability, climate and energy and how green their products are. In November 2011, Dell ranked 2nd out of 15 listed electronics makers (increasing its score to 5.1 from 4.9, which it gained in the previous ranking from October 2010).[84]

Dell was the first company to publicly state a timeline for the elimination of toxic polyvinyl chloride (PVC) and brominated flame retardants (BFRs), which it planned to phase out by the end of 2009. It revised this commitment and now aims to remove these toxics by the end of 2011 but only in its computing products.[85] In March 2010, Greenpeace activists protested at Dell offices in Bangalore, Amsterdam and Copenhagen calling for Dell’s founder and CEO Michael Dell to ‘drop the toxics’ and claiming that Dell’s aspiration to be ‘the greenest technology company on the planet’[86] was ‘hypocritical’.[87] Dell has launched its first products completely free of PVC and BFRs with the G-Series monitors (G2210 and G2410) in 2009.[88]

Green initiatives

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.[89] On February 6, 2007, the National Recycling Coalition awarded Dell its "Recycling Works" award for efforts to promote producer responsibility.[90] 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.[91] 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.[92]

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.

Dell reports its environmental performance in an annual Corporate Social Responsibility (CSR) Report that follows the Global Reporting Initiative (GRI) protocol. Dell's 2008 CSR report ranked as "Application Level B" as "checked by GRI".[93]

The company aims to reduce its external environmental impact through energy-efficient evolution of products, and also reduce its direct operational impact through energy-efficiency programmes. Internal energy-efficiency programmes reportedly save the company more than $3 million annually in energy-cost savings.[94] The largest component of the company's internal energy-efficiency savings comes through PC power management: the company expects to save $1.8 million in energy costs through using specialised energy-management software on a network of 50,000 PCs.[95][96]

Criticism

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. This meant customers wishing to upgrade their hardware would have to replace parts with scarce Dell-compatible parts instead of commonly available parts. However, company practice in this respect changed in 2003.[97][98]

In 2005, complaints about Dell more than doubled to 1,533, after earnings grew 52% that year.[99]

In 2006, Dell acknowledged that it had problems with customer service. Issues included call transfers[100] of more than 45% of calls and long wait times. Dell's blog detailed the response: "We're spending more than a $100 million — and a lot of blood, sweat and tears of talented people — to fix this."[101] Later in the year, the company increased its spending on customer service to $150 million.[102] Despite significant investment in this space, Dell continues to face public scrutiny with even the company's own website littered with complaints regarding the issue escalation process.[103]

On August 17, 2007, Dell Inc. announced that after an internal investigation into its accounting practices 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.[104] 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.[105] It was alleged that Dell had not disclosed large exclusivity payments received from Intel for agreeing not to buy processors from a rival manufacturer. In 2010 Dell finally paid $100 million to settle the SEC's charges of fraud. Michael Dell and other executives also paid penalties and suffered other sanctions, without admitting or denying the charges.[106]

In July 2009, Dell apologized after the firm offered its Latitude E4300 notebook at NT$18,558 (US$580), 70% lower than usual price of NT$60,900 (US$1900) in its Taiwan website. The firm withdrew orders and offered a voucher of up to NT$20,000 (US$625) a customer in compensation. The consumer rights authorities in Taiwan fined Dell NT$1 million (US$31250) for customer rights infringements. Many consumers sued the firm for the unfair compensation. A court in southern Taiwan ordered the firm to deliver 18 laptops and 76 flat-panel monitors to 31 consumers for NT$490,000 (US$15,120), less than a third of the normal price.[107] The court said the event could hardly be regarded as mistakes, as the prestigious firm said the company mispriced its products twice in Taiwanese website within 3 weeks.[108]

See also

References

Notes
  1. ^ Dell Company Profile. Retrieved July 28, 2010.
  2. ^ a b c d e f g "Form 10-K". Dell Inc., United States Securities and Exchange Commission. March 31, 2011. http://www.google.com/finance?q=NASDAQ:DELL&fstype=ii. Retrieved July 1, 2008. "For the fiscal year ended: Jan 1, 2009" 
  3. ^ "Fortune 500". Fortune Magazine. http://money.cnn.com/magazines/fortune/fortune500/2011/full_list/. 
  4. ^ http://www.gartner.com/it/page.jsp?id=1893523
  5. ^ "Fortune 500". CNN. http://money.cnn.com/magazines/fortune/fortune500/2011/states/TX.html. 
  6. ^ "Fortune 500 2010: States: Texas Companies". CNN. http://money.cnn.com/magazines/fortune/fortune500/2010/states/TX.html. 
  7. ^ "About Dell|History | Dell Österreich". Euro.dell.com. http://www.euro.dell.com/content/topics/global.aspx/about_dell/company/history/history?~ck=ln&c=at&l=de&lnki=0&s=corp. Retrieved September 5, 2010. 
  8. ^ Koehn, Nancy Fowler (2001). Brand New: How Entrepreneurs Earned Consumers' Trust from Wedgwood to Dell. Harvard Business Press. p. 287. ISBN 978-1-57851-221-8. http://books.google.com/?id=7j8VefeqUk4C&printsec=frontcover. Retrieved October 14, 2008. 
  9. ^ Frequently Asked Questions[dead link]
  10. ^ a b c ZDNET Asia: Michael Dell back as CEO 1 Febryary, 2007. Visited: 10 April, 2012
  11. ^ a b Lee, Louise (March 23, 2006). "Dell Goes High-end and Hip". BusinessWeek. McGraw-Hill. http://www.businessweek.com/technology/content/mar2006/tc20060323_034268.htm. Retrieved October 29, 2008. 
  12. ^ a b Bloomberg-Businessweek Its Dell vs the Dell way, February 2006. Visited: 10 April, 2012
  13. ^ Vance, Ashlee (June 28, 2010). "In Suit Over Faulty Computers, Window to Dell's Fall". The New York Times. http://www.nytimes.com/2010/06/29/technology/29dell.html. 
  14. ^ CRN.COM: Rollins now out of job
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  48. ^ "#25 Michael Dell". Forbes. March 11, 2009. http://www.forbes.com/lists/2009/10/billionaires-2009-richest-people_Michael-Dell_WJOB.html. Retrieved October 21, 2009. "[Michael Dell] caused ire in Ireland after relocating factory to cheaper Poland." 
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  51. ^ "Dell Precision Open-Source Workstations with Linux". Dell.com. http://www.Dell.com/content/products/features.aspx/precn_n?c=us&cs=04&l=en&s=bsd. Retrieved November 17, 2011. 
  52. ^ "Dell Everdream Desktop Management". Everdream.com. http://everdream.com/. Retrieved November 17, 2011. 
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  55. ^ Kraemer and Dedrick: "Dell Computer: Organization of a Global Production Network", Center for Research on Information Technology and Organizations, 2002.
  56. ^ Company Annual Reports, various years.
  57. ^ Scheck, J: "Dell Plans to Sell Factories in Effort to Cut Costs", Wall Street Journal, September 5, 2008.
  58. ^ The Register: Dell cuts North-Carolina plant despite $280m sweetener, 8 October, 2009. Visited: 10 April, 2012
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  62. ^ EU to investigate Dell aid package[dead link]. RTÉ New Report — January 8, 2009
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  107. ^ Dell loses Taiwan consumer lawsuit: report
  108. ^ full-text verdict
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