Michael Dell reclaims Dell CEO throne, Dell 2.0 begins

Michael Dell reclaims Dell CEO throne, Dell 2.0 begins

Summary: Michael Dell is CEO again of his namesake company.  Kevin Rollins is out.

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TOPICS: Dell
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Michael Dell is CEO again of his namesake company. 

Kevin Rollins is out. 

Why? The company is going to have another earnings miss. 

Dell said it "expects its fourth quarter fiscal year 2007 results to be below the average of First Call estimates for both revenue and earnings per share."

According to Thomson Financial, Dell is projected to report fourth quarter revenue of $15.3 billion and earnings of 32 cents a share. For the year, Dell is expected to report revenue of $58 billion and earnings of $1.17 a share. 

The company just said in a statement:

"The Board believes that Michael's vision and leadership are critical to building Dell's leadership in the technology industry for the long term," said Samuel A. Nunn, presiding director of Dell's Board. "There is no better person in the world to run Dell at this time than the man who created the Direct Model and who has built this company over the last 23 years."

The move isn't entirely unexpected. Dell has lost its luster in recent years as rivals such as Hewlett-Packard closed the manufacturing efficiency gap that propelled Dell throughout the 1990s.

On Rollins' watch Dell:

  • Misplayed a move to AMD chips (it took on AMD as a supplier just as Intel was rebounding);
  • Suffered through an SEC probe that's ongoing;
  • And regularly missed Wall Street estimates.  

Now it's Michael Dell job to mop up. He said: 

"Dell has tremendous opportunities ahead of it. I am enthusiastic about Dell 2.0, which includes our plan to provide the best customer experience, build a strong global services business and ensure our products deliver the best long-term customer value."

Of course Dell is going to say that. But Dell 2.0 is going to be more difficult than Dell 1.0. Dell's biggest issue is that its manufacturing prowess isn't the edge it used to be. And Dell doesn't spend enough on research and development to truly innovate. As a result, Dell is mired in a commodity hardware game. That game plan was fine when rivals were inefficient, but HP can now squeeze Dell on price.

Bottom line: Dell 2.0 can't rely on the Dell 1.0 playbook. Michael Dell has his work cut out. Welcome back.  

Topic: Dell

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147 comments
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  • They better shape up!!!!

    We bought several thousands of dollars worth of Dell products each year until this year (2007). I had the worst experience with Dell business sales I have ever had in my 25 years in this business. I swore that as long as I was in the position of purchasing products for my company, Not another Dell would come through this door. Later Dell, Welcome HP
    Capt4503
    • NEVER AGAIN!

      Dell deserves to lose it all. They have the worst customer service I've ever experienced since I started using Commodore 64s in 1984. First, they sold me a Dimension with the CMOS battery hardwired to the motherboard. Battery dead...buy a new motherobard!
      Customer Service accused me of keeping 2 1 GB memory sticks at $1200.00 each! Their local rep took them after working on PC and it was documented in tech support records. They put me through living hell even though tech support tried their best to make customer service believe me. I'll never touch another Dell...Michael or whomever!!
      cdunn7738
      • Dell Products

        As I have seen in the past couple of years dell products have been inferior. I have done DSL installs for the local phone company and have seen at least a couple of DELLS that had defective on board ethernet ports, also I personally have a grudge against them in the first place for their long standing policy of not supplying AMD CPU's. I was rejoycing when I saw that they were going to sell systems with AMD Cpu's. Of course that will not impact me much though as I never buy commercial name brand computers; I always build my machines from scratch starting with an empty case, then I purchase the motherboard, CPU, etc. I don't really like name brand computers as I feel like I never get a good computer from large manufacturers.
        Computer_User_1024
    • Customer Service from Dell "was" what we bought.

      What we got with customer servvice is India. Not a pleasant experience where you really can't tell if you got the trainee or the back office manager. One trick that worked well is to prees 2 for Spanish these guys from Texas would answer your questions in english and be done with it.
      Good luck in your new job Michael. It's much hardest to clean up than to build from scratch.
      YankeeLover
      • Support needs improvement

        I still buy Dells but I have qualms about their support, which I think needs drastic improvement. Yesterday I was helping a friend increase the memory in her Inspiron 1200. She had been told she'd have to remove the 256 memory and put in the 1 G chip. (Wrong as it turns out.) We opened the memory window and could not see how to remove the old memory. She called support. The support person in India should have had a schematic and instructions to look at, but instead she tried to tell us how to remove the old chip. That would have been fine if there had been one but eventually we found the manual and read that the base memory was integrated and not removable. All we needed to do was insert the 1G chip and we were good to go. The half hour spent with tech support was a complete waste of time.

        Dealing with knowledgable sounding but actually unknowledgable support people at Dell is a too common experience. I like their machines, but hate support.
        RobAlex
  • First wish for Mike Dell is beg to sell Apple products

    Dell is in, Rollins is out, Gates is out, Ballmer is in, man the wheel, the ships are
    sinking. That Dell is now a follower and not a leader is more obvious because they
    deal in a commodity product line that has no pizzazz, no innovation
    whatsoever....only copycats. WIndows and Vista and black and gray Dell tool-less
    pc cases and black and silver laptops are so yesterday, or the day before. The PC
    user is no longer satisfied with easy to copy software and me-too looking
    computer boxes that are made by the lowest bidders in Malaysia. There is a trend
    that users are getting wise to the half baked products Dell and Microsoft deliver.
    Mr. Dell once said he would gladly sell Apple systems if he could.......this ought to
    be his first call to Steve Jobs, right after he calls India to close the sorry call
    centers and tech support division. Dells problems can only be fixed by making
    drastic changes, more than a shake up at the top, they need a revolution that runs
    from top to bottom, adding iPods and iMacs would go a long way towards
    boosting income for 2007.
    jonathan swift
    • Go to hell.

      Dell is in the PC industry, and selling Apple's rubbishy products would help kill that industry (and any competitiveness).

      Dell needs to work with Microsoft to ensure their products look good, and are built correctly.
      mrmckeb@...
      • Oh that was so helpful you brat.

        He has his right to his opinion.

        I personally think Dell needs to work on quality and to also put some distance between themselves and Microsoft.

        I would have said they should push Linux more. Not because I don't care for Mac, but because what he wanted to do Apple would not allow.

        Microsoft is going out of there way to be their own worse enemy and people who back them are hurting them more than helping them.

        In my own way by pushing Linux, Mac & BSD I am supporting Windows by giving them competition.
        slim-01
        • Put some distance between Dell and Microsoft??? What a joke. You are lost.

          Dell makes PC's for business and consumers, whatever respect I do have for Linux cannot be expanded to include its use on a business desktop or that of Joe average consumer. I live and work in the real world, and despite whatever nice things can be said about Linux its not ready for prime time yet. Some versions are getting close, but Ive seen Linux and Ive seen the average consumer and the workplace and if Dell puts any noticeable distance between themselves and WIndows it will be the dead end of Dell.

          It would sure help Apple and even HP thats for sure. HP would get a great surge if Windows based Dells were reduced in availability in any way. And Apple has OSX which is beyond any doubt a prime time OS capable of easy use for even novice consumers. Nothing wrong with Linux for what it is, but Ive used Linux SUSE and I know the real world, and no where near enough of the real world is ready for daily use of Linux yet then flying a kite.

          I know a few Linux users and they can tell anyone the great advantages that Linux can bring, but that means squat because for those same people the things that would be overwhelming problems with Linux are no problem at all for the Linux users I know so on most levels they just don't get it, for the average user at home or in business there is neither the time interest and in many cases even the ability to cope with Linux so Linux currently will never be more then an OS for focused special interest groups until the day comes that Linux installs exactly as easy as WIndows, on all the hardware Windows will install on, and is at least as compatible with popular applications as Windows is, without requiring and special tricks or software to get some compatibility. Oh ya. Anything that you can do with a click or two on Windows would have to only require the same click or two on Linux, that means command lines would have to vanish from Linux for 99% of typical users.

          Nothing wrong with Linux for what it is, but those who truly love it are also truly ready for it and have no real need for the things Windows does that Linux does not. The rest of the world both want and need Windows for the foreseeable future.
          Cayble
          • <Insert teaser subject line here>

            What I have found is that people who can't manage Linux ALSO couldn't manage Windows. By that metric, neither is fit for end-users.

            But if their computer just happens to come with (fill in the blank), whether Linux or Windows, they can do what they need to do just fine.

            Claims of user unfriendliness leveled against Linux just don't wash with me as both my 84 year old Dad and my wife use Linux just fine. I had to maintain their computers when they were running Windows and I have to maintain them under Linux. No change.
            Jambalaya Breath
          • Obsiouly do not work for IT

            You obviously do not work for the IT Dept. Or contract for some crappy India company. Support Windows is a breeze, and will be more so with Vista. Linux is still a speciality software that has way too many quirks.I run that at home (yes I do work in IT) and I have Windows XP and Vista, and Linux. My wife who is a novice, and worked on apples, cannot stand Linux. Too hard to find things and when it works it's just OK. She loves Vista because all she has to do it type in a search and it's there. So all you hippie freaks for Linx and Apple, you can try to nay-say MS but they are here to stay.
            fr0thy2.
          • I simply do not believe you are a Linux user.

            Your obviously a Windows only user judging by your anti Linux & Mac user comments.

            As in you say a whole lot of crap about Linux and then claim to use it.

            If you are telling the truth, why would you use it.

            Typical Windows Fanboy nonsense. Running Linux 10yrs ago for 2hrs and showing it your wife doesn't qualify you to say the comments you made.

            That is if you ever even looked at Linux.
            slim-01
          • Re: Your Comments

            First by some distance I meant not letting Microsoft dictate policy and not to stop putting Windows on their units.

            Second I'm not sure what Linux distro you are using or how long ago you used it but your Linux comments are 180 off.

            I have installed over 300 copies of Windows so I am qualified to say the Ubuntu Linux I use now is much easier to install even the very first time.

            As for hardware. Many more hardware items were installed at first login than Windows. I didn't have to play go find and download the current driver as I do in Windows.

            As for apps. If a person can't learn a new programs that do the same as the ones they already know then they are not very computer literate and would have problems on Windows as well. I mean that my users learned OpenOffice in less than 1 1/2 hrs because they already knew MS Office.

            If a person needs help converting over to Linux then they should use VMWare for a while just as long as they use Linux for the web and email.

            I moved away from Windows because it was lacking in security features by default. To be secure you have to add 3rd party security apps to it.

            To me this is why Windows is not ready for the modern world to spite all the apps and users it has. Other OS such as Linux, Mac & BSD are secure.
            slim-01
          • I disagree

            Becuase i have used BOTH Ubuntu and Windows. Sorry, bub, but Windows is still easier to install, find hardware, and change settings. i LIKE Ubuntu, but doesn't mean i am blind to it's faults. I am not exactly...YAY over Vista currently, because of it's faults.

            But what you claim has NOT been my experience by far. And your claims on software forget a few things like CAD programs, which pretty much all CAD programs i know are Windows ones.

            Linux i have found is also annoying to install programs. I still have issues at times. It is not an easy transfer.

            So get off of your high horse.
            ivanotter
          • Linux has Cad programs.

            They may not be quite as good as Autocad but they work.

            Try Qcad.
            slim-01
    • mr new ceo

      Mr Dell, please read all the post here (some very good advice) and save your company!
      bameeri
    • so apple is innovative in the computer market?

      the Mac line-up in the desktop hasn't seemed to change much for a long while now. fresh design? pffft.

      the apple innovations have slowed, so they're now leaving the iPod as they're running out of features to add, and they wouldn't dare touch the design of it's system... iTunes hasn't had an overhaul in a fair amount of time.

      EVERYTHING is slowing down, as supply has passed demand. Things have passed being useable, and people are starting to realize that the design isn't as big a deal... Appearance won't make it work better.

      oh, and please realize that Apple will never license out their prized possession... it's how they make money. The more control they hold, the less they need to share the profits. After all, you can't get more than 100% control.
      shryko
      • Apple is innovative

        Apple is extremely innovative. Sometimes they are innovating the outside,
        sometimes the inside. It's all part of the Apple experience. Leaving the iPod,
        because supplu surpasses demand? I don't know about where you live, but where I
        live you couldn't buy an iPod after about a week before Thanksgiving. They were
        gone, leaving the Toshibas, Creatives and all the others to pick through. It is
        about profits though and Apple makes a bundle on iPods. They probably make as
        much profit on a high end iPod as they do on a 17" or 20" iMac although they
        make the biggest bucks on their Applecare extended warranties. I never see iMacs
        break in 3 years, so the $175 is pure profit.

        Still, I would never suggest Dell follow Apple's model. Michael Dell is known for
        one thing, stacking them high and selling low. His model works as does Apple's
        model. The problem with Dell's model is Lenova does the same thing about as well
        and HP is pushing them with a lot of mu$cle. As much as we Mac users tend to
        dislike Dell because of the difference in our users conception of what a computer
        should be and the fact that Michael Dell once said Apple should just give up, I
        think if I were to need a Windows PC or a new Linux PC, I would probably buy a
        Dell. I like the fact that you can buy a Dell in just about any configuration you
        want. Some things I don't use on my Mac I wouldn't have to pay for with a Dell.
        Dell is in a little slump, but they're not down. I think they strayed a bit off course
        but Michael Dell will tighten up the ship and bring home the bacon. Like it or not
        Michael Dell is one of those figures like Gates, Jobs, and a few others whose
        personality resonates throughout the company.
        MacGeek2121
      • Considering that Apple actually did a complete rebuild on OSX which is

        something Microsoft claims to have done with Vista but didn't I think your post is at best uniformed.

        I use Linux so I think my observation is a bit more unbiased than yours. As it if I use Linux why am I fine with someone getting a Mac and yet I no longer recommend Windows? Because as their tech I know it is a more modern system.

        Microsoft is obsolete and quickly become irevelant. I expect they will have a stock holder revolt over Vista. Billions of product research dollars for XP with eye candy.
        slim-01
        • You Are All Missing the Big Point!

          All the talk about Apple, Microsoft and Unix/linux, running on HP, Dell, etc, is off the point. Computers for the masses, mean different things to different people. Techies have their favorite machines(Linux based/Unix) Vertical Markets and techie markets. Home users (most) want to open the box set up the computer and start working on it. High end users want to tinker, at least with the starting specs, and produce a machine that runs faster/better/etc. Apple users are mainly graphic users, and original Apple users who worked on them at school. They give up something in creative computing, but at the expense of complication. There is very little innovation after you have your Mac box on the desk. The product is superior from the user standpoint, as long as you recognize it's short comings. To wit: limited market share, therefore less software development. Limited hardware expansion capability without significant extra cost.
          Now we come to the "Dying Microsoft Model". Vista, maybe too little too late, for the moment. XP as long as Microsoft doesn't "deep Six" it is a significant and capable software OS for the masses. It works. The techs will complain about many of it's failures. But the average user will never use Linux unless it is packaged and comercialized for the average user by the major manufacturers, such as IBM. The problem with that is the product becomes expensive, and is modeled by the manufacturer to their standards. I might remind everyone that the PC has been one of IBM's largest failures over the years, as has it's Operating system.
          Back to Microsoft. In general an OS package that over the years has developed into something for everyone. No package is perfect. Microsoft won the 1st phase of OS development, including automatic installations, automatic detection of devices (a significant advancement)and a generous expansion capability. Microsoft took a big hit on security (and rightfully so), virus susceptability etc. The myth that the MAC is immune to viruses is purely the fact that their are 10 times as many (or more) PC's than Mac's. The PC attracts attacks based on the pure number of PC's.
          In short, Microsoft is no more or less a good product, than the other systems for the majority of the public. Businesses have other issues, but still will not stand for anything that isn't a "canned" system for it's users in general. The difference is only in the vertical software market.
          jattas@...