Michael Dell set on 'changing the approach' to stay ahead

Michael Dell set on 'changing the approach' to stay ahead

Summary: Mark Anderson, host of the Future in Review conference, warmed up Michael Dell for his interview by proclaiming him the best manager in the world. The Dell founder and Chairman didn't shed too much light on challenges the company faces going into its 22 year.


Mark Anderson, host of the Future in Review conference, warmed up Michael Dell for his interview by proclaiming him the best manager in the world. The Dell founder and Chairman didn't shed too much light on challenges the company faces going into its 22 year. The PC market has been slowing, and Dell lost some share to HP and others during the first quarter of this year, and the company's stock has slipped during the last year.

Dell admitted that he underestimated what was going on competitively. Anderson quipped that Dell didn't think that Carly Fiorina would resign, replaced by Mark Hurd, who has proven to be tougher competition.  "We used to be 3 times more profitable than competitors, now we are 2.5 times more profitable than competitors," Dell said. "We are changing our approach, making investments around the customer experience to take it to a whole different level, focusing on the fundamentals around supply chain, great products, and great servers. There are lots of opportunities for us to do quite a bit better than last year."

In response to a question about the viability of the Dell model for consumer sales versus retail stores, Dell said. "In the U.S. over the last three years our consumer market grew from 6 percent to about 30 percent share of market....Looking out the next ten years more people going online instead of to a store. In the last quarter we had 400 million visits by 140 million unique users at Dell.com. Ultimately it's a better model for us and the customer."

On the technology front, PCs will be easier to use in the home. Regarding Microsoft's Media Center PC, Dell said that in PC centric homes it won't be an overnight phenomenon. "You could envision more than one answer in the consumer electronics world. A PC-centric person probably has digital music and photography and it's easy to migrate into their computing," Dell said.  "We are already seeing usage emerge in a fairly gradual way," he added.


Dell doesn't expect the desktop to disappear. "If you want the fastest, most powerful machine, you almost  always get a desktop," Dell said. Emerging markets are also playing a big role, he said. Dell has a $600 million deal with Mexico, putting computers in all the schools. 

Over the next several years, computers will continue to take many forms, Dell said. "There won't be one universal device for all uses and applications. Most important is consistency of data across all the devices."

In terms of new markets, Dell said Dell have 11 percent share of market outside the U.S., yet 70 percent of the market is outside the U.S. Revenues from outside the U.S. grew from $12 billion to $22 billion over the last three years. "We look at the GDP in different countries, at cell phones a lot as a precursor to computing and where there is some kind of competitive structure for telecom...those markets are taking off like crazy," Dell said. He cited Brazil as growing 74 percent for Dell in a year. Korea has 72 percent real broadband penetration and massive multiplayer online gaming and just a hyper-example of what can happen in an economy, he said. Countries in the former Soviet Union are attractive markets, but Russia and other areas have corruption problems that make it difficult to do business.

A lot of countries in Southest Asia are poised for growth--Singapore, Malaysia and Thailand all point in that direction, he said  Dell has a factory in Malaysia and accounts for about 7 percent of its GDP. "Businesses in India and China growing at roughly 40 percent," Dell said, "and it looks quite sustainable." China is Dell's third largest market in the world, and the company has two factories in China and will spend $18 billion in procurement in China this year. In India, Dell plans to add 10,000 employees to the current 10,000 over the next three years.

Topic: Dell

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  • The Unmentioned Elephant

    Of course you notice that not once in this article is Dell's current elephant of a problem mentioned. Their customer service for anyone who isn't a large corporate customer sucks. And that's the most polite thing I can say about it. I have a Dell laptop. I really doubt that its replacement will be a Dell. I've had too many bad experiences with Dell's tech support for that machine and for others that I've dealt with for work, which is a small business and therefore beneath Dell's radar as a meaningful customer.
    • The Elephant's Elephant

      Poor tech support?

      How is it that the Wintel community can cite poor tech support
      as a reason to switch to another PC brand. The new boss will be
      the same as the old.

      The problem is not tech support. The problem is that it needs
      tech support. The only way out of this codependant loop is to
      subscribe to an accountable and integrated model. This is not
      available in the Wintel ecosystem. The only brand available to
      Wintel habituals is Microsoft?your problems start here. Every
      hardware configuration that supports Windows is just another
      different colour of plastic - no more.

      Don't buy suppoort, buy a computer for a change.
      Harry Bardal
      • Not the OS that's the problem

        It's not the OS or apps. Its the hardware. Poor hard drives, power supplies, etc. Dell is constantly changing items for low cost and thus low quality.

        And then add in slow ship times. This is a glaring problem with build-to order in the corp world. I don't need customization. I need 200 identical laptops and desktops today. And in a month, I'll need another 200. Don't change components because we then lose the advantages that come with consistent identical hardware.

        We can go with a VAR and get identical hardware from HP, fast ship times, and better return/replacement for the odd defective hardware out of the box. Dell wants to send a tech to 'fix' that new machine.
  • Dell

    Dear Dell:
    How's the "out-Sourcing" going... Oh, there is a problem with the Tech Service and some of the "Component Manf." especially the Laptops.. Wow, who would have thought it!!!!!!!
  • Fix your crappy service

    It's not that hard. What got you to the top was your "award winning service" which has been crap ever since you got the award. Close the Indian call centers and move back to Omaha or Austin like everyone else.

    Penny wise and pound foolish. Save a few pennies on service calls and alienate all your customers.

    It takes a CEO to come up with a plan that good.
  • Service & tech support

    I just ordered a Dell Desktop on Sunday May 14. Why? I had to go through bancruptcy in 2005. Dell would finance me others would not. But the rate Dell wanted is 29.99% (I am not joking) If it was not for the fact that I can pay this off in less than 12 months with no interest I would not have touched it with a ten foot poll.

    I had to pay an extra $ 50.00 for a SATA 250 GB HD over a SATA 160GB HD. My 15 month old Gateway came SATA 250 GB HD. In fact if Gateway would have let me have 12 month 0% Financing I would have gone with them in a heart beat. Their quality is better than Dell's and it is consistant. Dell has become like many of its out of business competitors. Cheapest at everything: I think this has to do with their products are all Chinese assembled now and any options you want are done in the US. The Chinese think cheaper is the only answer. True in some cases. But quality is more desirable.
    Systemic Chaos
  • head in the sand

    I'm afraid that Mr. Dell is too worried about bottom line numbers to concern himself with the business as a whole. He's been seduced by the Wall Street side of the Force.

    I foolishly thought that even though calling India for support wouldn't affect buying upgrades through the official Dell site. I was SO wrong. I got the wrong item, and trying to speak American English with someone speaking Indian English was a major challenge. I'm still waiting for the corect component to replace the wrong component. I don't even think it's worth bothering with the BBB.

    Bottom line: If you're a Dell investor, this news is welcoming. If you're a Dell user, it is absolutely hollow. My next PC certainly WON'T be a Dell.
  • forward thinking also means thinking about security

    If Dell really wants to make strides in technology, then they also need to look at loading their systems with more than just anti-virus software. Attacks over outbound email are on the rise, and the increase of data breach from unsecured laptops is affecting businesses left and right. Right now, you have to take the initiative and install a desktop security solution yourself (example: Taceo, which will protect outbound email http://www.essentialsecurity.com/products.htm).