Michael Dell finding that karma can be tough

Michael Dell finding that karma can be tough

Summary: With Dell's strategy in question and Michael Dell's corporate privatization plans still in limbo, longtime Apple watchers wonder if there's a "curse" involved with the company after a fateful speech some 16 years ago.

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According to the latest reports, Michael Dell recently said that he will stay with the company even if his plans to take Dell private don't succeed. He said he is "ready to fight and I am committed to doing what I believe is right for the company."

Michael Dell has long been quick to tell the market "what's right" for a company. In October 1997, at ITxpo, Gartner Group's long-running IT analyst conference, Dell was asked what he would do if he were Apple's CEO. Steve Jobs had returned to the company early in the year and only a few months before had taken over as interim CEO.

"What would I do?" he said. "I'd shut it down and give the money back to the shareholders."

This drew a big laugh from the PC crowd. Apple was mostly a computer system maker with a declining market share, less than 5 percent. And Dell was riding high from the success of its its direct-sales model.

However, Dell appears to be less than quick to take his own advice when its his company on the receiving end of trouble.

Since then, the high-flying Dell hasn't exactly soared. Its hardware quality kept declining as the company tried to squeeze profit from ever-thinner margins.

In a fall 2007 briefing, Michael Dell and corporate executives presented a vision for "Dell 2.0," saying that the company would be a leaner, meaner, selling machine. Mark Jarvis, then Dell marketing vice president, said that "Apple has become the conformist company."

Instead, Dell would be the "different company," he said, borrowing a bit from Apple's then-fading "Think Different" advertising campaign from the late 1990s. Of course, he couldn't provide much detail of how this difference would be achieved.

Check Out: Dell and the wish for Apple's cool

In 2010, despite the Version 2.0 reset, Dell settled a lawsuit that it had knowingly shipped millions of faulty computers and then concealed those problems from its customers. The primary cause of the problems were overly-cheap capacitors.

Also in the fall of 2010, Michael Dell himself and the company settled with the SEC on charges that both had taken hidden payments from Intel to not use AMD processors. In addition, the company had used fraudulent accounting practices to meet analysts' targets.

To a baseball fan as myself, I would suspect a "curse," such as the infamous Curse of the Bambino," which was blamed for the failure of the Boston Red Sox to win the world series from 1918 to 2004, an 86-year period. It was due to the sale of Babe Ruth (called the Bambino) to the Yankees. This is the Curse of Apple.

Why anyone believes that Dell can make a go of its Dell 3.0 or Dell 4.0 strategy, move out of its commodity PC business and make a success as an enterprise technology player providing expensive, high-margin hardware, software and services, is an open question.

At the Monday Note blog, Jean-Louis Gassée said that Microsoft may come to the rescue and help take Dell private, forcing it to keep producing Windows PCs.

Or maybe there’s another story behind Microsoft’s beneficence: The investor syndicate struggles and can’t quite reach the $22B finish line. Microsoft generously — and very publicly — offers to contribute the few missing billions. Investors see Microsoft trying to reattach the PC millstone to their necks — and run away.

Hats off to Steve Ballmer: Microsoft looks generous – without having to spend a dime – and forces Dell keep making PCs.

Or perhaps all the deals will fall apart. After all, Dell appears to be operating under a "curse."

Topics: Apple, Hardware, Microsoft, Operating Systems, Windows

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16 comments
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  • Now May Not Be The Best Time For Apple Fans To Bring This Up

    Apple's mobile fortunes are encountering a hiccup at the moment. Unless they come up with something pretty radical in the next 6 months, it'll be a repeat of the mid-1990s all over again: flailing about, trying to regain relevance while circling the plughole, until Steve Jobs came to bail them out.

    Except there is no more Steve now...
    ldo17
    • Hiccup?

      Please name any tech company, or any company for that matter that's had a ten+ year hit parade like Apple. That kind of success is nearly impossible to achieve.

      Only Toddy can find fault with that. . .
      Gr8Music
      • Re: that's had a ten+ year hit parade

        Toyota.
        ldo17
  • Michael Dell finding that karma can be tough

    "At the Monday Note blog, Jean-Louis Gassée said that Microsoft may come to the rescue and help take Dell private, forcing it to keep producing Windows PCs."
    and just like apple of yesteryear, m$ will help bail out dell and apple when time comes....
    kc63092@...
  • The company already has master

    DELL company will be deprived and of the bose M. Dell because to C. Icahno lacks charisma and leadership
    luis river
  • Talk about bias !!!

    What an amazingly one-sided and biased argument.
    Mr Morgenstern's credibility is now zero.
    Steve__Jobs
  • Not Surprised

    I'm not surprised that Dell's stock is down. Have you ever called their tech support? It's outsourced to snotty Indians that make you feel like they're doing you a favor, even when they can't or won't help you. No wonder the company is suffering. I own two Dells, and they're OK machines, but I would never buy another, based on my experience with their tech support.
    omb00900@...
  • Dell too young to retire

    Michael Dell is no Steve Jobs. Dell's choice of words back when was unfortunate because Apple fans know how to keep score. Drastic measures are needed to fix Dell outside of the public eye but I don't think chop off-n-sell is the way. Dell has two years to turn it around into a mini-IBM (services with possible niche software and hardware upsells).
    richard@...
  • Dell is failing it's customers

    From my perspective as a former customer (I've purchased 4 Dells so far and still use my Dell XPS 435T as my primary computer), Dell is failing it's customers because there is very little real choice offered when configuring one's own PC.

    Dell used to allow their customers options, such as dual DVD-ROM drives and higher end video cards. But these days I can't get a high end video card in a Dell XPS 8700. Oh yeah, I can get the new Haswell CPU, the Core i7-4770, but the highest end video card I can get is a GTX 650 Ti 1GB or a GTX 660 1.5GB (some PC games require a 2GB video card). No option for a GTX 680 2GB or the newer and better GTX 780 3GB video cards. Of course these would require better power supplies, but when the customer wants a high end video card in his system he's not going get upset about having to pay a little more because he needs a heftier power supply.

    Now, you can argue that most folks wouldn't know enough to want high end video cards in the Dell XPS, but there are still a lot folks like me who know more about computers than the average customer. You can also argue that Dell limits the XPS because it has its Alienware systems to sell to gamers.

    What Dell doesn't do anymore is allow their customers to choose what they really want. If a customer goes to Dell's Alienware to try to get that high end video card, they can ONLY get one or two GTX 680 2GB cards and they have to choose between the Core i7-3820, 3930K, or 3960K CPUs. No Core i7-4770! Nor can they choose the most current NVidia graphic card, the GTX 780 3GB. Dell doesn't even offer it while other vendor do!

    So Dell is growing stagnant, in my opinion, because they think they know more about what their customer want then their customers. That might be true with average customers but for folks who don't care to build their own system but know what components they want, Dell just doesn't care anymore about them. That's why I won't buy from them again. I have already found three other vendors that will allow me to create the system I want. Dell is becoming so much Apple that they may as well take away consumer choice altogether and just build computers to send directly to market.
    mustang_z
    • Why would you configure a BTO with the high-end video card?

      Unless it's a Mac or you're buying for a corporate environment, you're better off to buy your own.
      Champ_Kind
  • In the 1990s it never even occurred to me

    that Apple might disappear off the scene. But then I didn't have the Internet until the late '90s so I had no idea what was happening. Apple's problems would definitely not have been seen by TVNZ as exactly newsworthy! Despite his silly comment, I do wish Michael Dell all the best in his efforts to regain ownership of his company.
    Laraine Anne Barker
    • Re: would definitely not have been seen by TVNZ as exactly newsworthy!

      TV3 tends to give more coverage to this sort of thing, in my experience.

      Oh no, now we've started news network fanboi wars...
      ldo17
  • I used to buy only Dells - once upon a time.

    But after a notebook with a next business day warranty took 30+ days to fix because quote - the accountants won't let us fix it because it would be too expensive', I no longer buy dell. I've found that Asus makes very good notebooks and backs them with warranties that are actually honored.

    I'm done with Dell
    lkarnis@...
  • Goodbye, Dell

    Glad to see the reign of arrogance and low quality products is meeting the sunset and eating some crow.
    D.J. 43
    • HP is headed the same way.

      With losing their place on the DJI, they'll also fall off soon enough.

      It's just a shame that Dell is going to take Alienware with it. I'm not a fan of paying too much for something I could easily build myself, I do love their cases and some of their aftermarket hardware.
      Champ_Kind
  • It's the MS Curse!

    Isn't it!?
    jawadwaseem