Friday, May 30, 2008


Dell Inc. (NASDAQ: DELL SEHK: 4331) is a multinational company based in Round Rock, Texas which develops, manufactures, sells, and supports personal computers, servers, data storage devices, network switches, software, televisions, computer peripherals, and other technology-related products. As of 2008, Dell employed more than 95,000 people worldwide.
Dell grew during the 1980s and 1990s to become (for a time) the largest seller of PCs and servers. As of 2008, it held the second spot in computer-sales within the industry behind the Hewlett-Packard Company.
In 2006, Fortune magazine ranked Dell as the 25th-largest company in the Fortune 500 list, 8th on its annual Top 20 list of the most-admired companies in the United States. In 2007 Dell ranked 34th and 8th respectively on the equivalent lists for the year. A 2006 publication identified Dell as one of 38 high-performance companies in the S&P 500 which had consistently out-performed the market over the previous 15 years.
While a student at the University of Texas at Austin in 1984, Michael Dell founded the company as PC's Limited with capital of $1000.[4] Operating from Michael Dell's off-campus dorm room at Dobie Center [1], the startup aimed to sell IBM PC-compatible computers built from stock components. Michael Dell started trading in the belief that by selling personal computer-systems directly to customers, PC's Limited could better understand customers' needs and provide the most effective computing solutions to meet those needs. Michael Dell dropped out of school in order to focus full-time on his fledgling business, 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 contained an Intel 8088-compatible processor running at a speed of 8 MHz. PC's Limited advertised the systems in national computer-magazines for sale directly to consumers, and custom-assembled each ordered unit according to a selection of options. This offered buyers prices lower than those of retail brands, but with greater convenience than assembling the components themselves. Although not the first company to use this model, PC's Limited became one of the first to succeed with it. The company grossed more than $73 million in its first year.
The company changed its name to "Dell Computer Corporation" in 1988. In 1989, Dell Computer set up its first on-site-service programs in order to compensate for the lack of local retailers prepared to act as service centers. Also in 1987, the company set up its first operations in the United Kingdom; eleven more international operations followed within the next four years. In June 1988, Dell's market capitalization grew by $30 million to $80 million from its initial public offering of 3.5 million shares at $8.50 a share. In 1990, Dell Computer Corporation tried selling its products indirectly through warehouse clubs and computer superstores, but met with little success, and the company re-focused on its more successful direct-to-consumer sales model. In 1992, Fortune magazine included Dell Computer Corporation in its list of the world's 500 largest companies.
In 1996, Dell began selling computers via its web site.
In 1999, Dell overtook Compaq to become the largest seller of personal computers in the United States of America with $25 billion in revenue reported in January 2000.
In 2002, Dell attempted to expand by tapping into the multimedia and home-entertainment markets with the introduction of televisions, handhelds, and digital audio players. Dell has also produced Dell-brand printers for home and small-office use.
In 2003, at the annual company meeting, the stockholders approved changing the company name to "Dell Inc." to recognize the company's expansion beyond computers.
In 2004, the company announced that it would build a new assembly-plant near Winston-Salem, North Carolina; the city and county provided Dell with $37.2 million in incentive packages; the state provided approximately $250 million in incentives and tax breaks. In July, Michael Dell stepped aside as Chief Executive Officer while retaining his position as Chairman of the Board; while in that capacity he contributed the maximum of $250,000 to the second inauguration of President George W. Bush.[5] Kevin Rollins, who had held a number of executive posts at Dell, became the new CEO.
In 2005, the share of sales coming from international markets increased, as revealed in the company's press releases for the first two quarters of its fiscal 2005 year. In February 2005 Dell appeared in first place in a ranking of the "Most Admired Companies" published by Fortune magazine. In November 2005 BusinessWeek magazine published an article titled "It's Bad to Worse at Dell" about shortfalls in projected earnings and sales, with a worse-than-predicted third-quarter financial performance — a bad omen for a company that had routinely underestimated its earnings. Dell acknowledged that faulty capacitors on the motherboards of the Optiplex GX270 and GX280 had already cost the company $300 million. The CEO, Kevin Rollins, attributed the bad performance partially to Dell's focus on low-end PCs.
In 2006, Dell purchased the computer hardware manufacturer Alienware. Dell Inc.'s plan anticipated Alienware continuing to operate independently under its existing management. Alienware expected to benefit from Dell's efficient manufacturing system.[6]
On January 31, 2007, Kevin B. Rollins, CEO of the company since 2004, resigned as both CEO and as a director, and Michael Dell resumed his former role as CEO. Investors and many shareholders had called for Rollins' resignation because of poor company performance. At the same time, the company announced that, for the fourth time in five quarters, earnings would fail to reach consensus analyst-estimates.
In February 2007, Dell became the subject of formal investigations by the US SEC[7] and the US Attorney General for the Southern District of New York.[8] The company has not formally filed financial reports for either the third or fourth fiscal quarter of 2006, and several class-action lawsuits[9] have arisen in the wake of its recent financial performance. Dell Inc's lack of formal financial disclosure would normally subject the company to de-listing from the NASDAQ,[10] but the exchange has granted Dell a waiver, allowing the stock to trade normally.[11]
On 1 March, 2007, the company issued a preliminary quarterly earnings report which showed gross sales of $14.4 billion, down 5% year-over-year, and net income of $687 million (30 cents per share), down 33%. Net earnings would have declined even more if not for the effects of eliminated employee bonuses, which accounted for six cents per share. NASDAQ extended the company's deadline for filing financials to May 4.[12]
Dell and AMD
When Dell acquired Alienware early in 2006, some Alienware systems had AMD chips. On August 17, 2006, a Dell press-release stated that starting in September 2006, Dell Dimension desktop computers would have AMD processors and that later in the year Dell would release a two-socket, quad-processor server using AMD Opteron chips, moving away from using Dell's traditional Intel processors.
CNet's on August 17, 2006 cited Dell's CEO Kevin Rollins as attributing the move to AMD processors to cost-advantage and to AMD technology. AMD's senior VP in commercial business, Marty Seyer, stated: "Dell's wider embrace of AMD processor-based offerings is a win for Dell, for the industry and most importantly for Dell customers."
On October 23, 2006, Dell announced new AMD-based servers — the PowerEdge 6950 and the PowerEdge SC1435 — marking its entry into the AMD-based server-marketplace.
On November 1, 2006, Dell's website began offering notebooks with AMD processors (the Inspiron 1501 with a 15.4-inch display) with the choice of a single-core MK-36 processor, dual-core Turion X2 chips or Mobile Sempron.
Dell and desktop Linux
First attempt in 2000
In 1998, Ralph Nader asked Dell (and five other major OEMs) to offer alternate operating systems to Microsoft Windows, specifically including Linux,[13] for which "there is clearly a growing interest"[14][15] Dell started offering Linux notebook systems which "cost no more than their Windows 98 counterparts" in 2000,[16] and soon expanded, with Dell becoming "the first major manufacturer to offer Linux across its full product line"[17] But by early 2001 Dell had "disbanded its Linux business unit".[18]
The reason(s) for such a quick reversal remain the subject of debate. Court documents accused Microsoft of coercing OEMs to drop Linux:
Microsoft executive Joachim Kempin described his plan of retaliation and coercion to shut down competition from Linux: "I am thinking of hitting the OEM harder than in the past with anti-Linux actions" and will "further try to restrict source code deliveries where possible and be less gracious when interpreting agreements — again without being obvious about it," continuing "this will be a delicate dance"[19]
While in a 2003 interview Michael Dell denied that Microsoft pressured Dell Inc. into doing an about-face with regard to desktop Linux, citing a lack of sales: "unfortunately the desktop Linux market didn't develop in volume. It's more of a server opportunity" but adding: "We continue to offer Linux on the desktop and there is nothing else to say."[20] However, a 2004 report noted that Dell no longer offered pre-installed desktop Linux:
So what does it mean "factory installed Linux"? If you want Dell to install Linux for you, first add on $119. But here is the annoying part. They won't send you a computer with Linux pre-installed. They sell you the computer and the boxes of software on the side, and then they make an appointment to send you someone who comes to your house or business and installs it there.[21]
On February 26 2007 Dell announced that it had commenced a program to sell and distribute a range of computers with pre-installed Linux distributions as an alternative to Microsoft Windows. Dell indicated that Novell's SUSE Linux would appear first.[22] However, Dell on February 27, 2007 announced that its previous announcement related to certifying the hardware as ready to work with Novell SUSE Linux and that it (Dell) had no plans to sell systems pre-installed with Linux in the near future.[23] On March 28, 2007, Dell announced that it would begin shipping some desktops and laptops with Linux pre-installed, although it did not specify which distribution of Linux or which hardware would lead.[24] On April 18, 2007 a report appeared suggesting that Michael Dell used Ubuntu on one of his home systems.[25] On May 1, 2007, Dell announced it will ship the Ubuntu Linux distribution.[26] On May 24, 2007, Dell started selling models with Ubuntu Linux 7.04 pre-installed: a laptop, a budget computer, and a high-end PC.
On June 27, 2007, Dell announced on its Direct2Dell blog that it planned to offer more pre-loaded systems (the new Dell Inspiron desktops and laptops). After the IdeaStorm site supported extending the bundles beyond the US market, Dell later announced more international marketing.[28] On August 7, 2007, Dell officially announced that it would offer one notebook and one desktop in the UK, France and Germany with Ubuntu "pre-installed". At LinuxWorld 2007 Dell announced plans to provide Novell's SUSE Linux Enterprise Desktop on selected models in China, "factory-installed".[29] On 30 November 2007 Dell reported shifting 40,000 Ubuntu PCs.[30] On 24 January 2008 Dell in Germany, Spain, UK and France launched a second laptop, a XPS M1330 with Ubuntu 7.10, for 849 euro or GBP 599 upwards.[31] On 22 February 2008 Dell announced plans to sell Ubuntu in Canada and in Latin America[32]
Michael Dell's return
On January 31, 2007 Michael Dell returned to the company as CEO. As chairman of the board, Mr. Dell had significant input into the company's operations during Rollins' years as CEO. However with the return of Michael Dell as CEO, the company saw immediate changes in operations, the exodus of many senior vice-presidents and new blood brought in from outside the company.
Departures announced include:
* Kevin Rollins, CEO[33]
* James Schneider, CFO[33]
* John Medica, senior vice president, consumer products[34]
* Joe Marengi, senior vice president, Americas[34]
* John Hamlin, senior vice president, worldwide online operations[35]
* Paul McKinnon, senior vice president, human resources[34]
* Rosenda Parra, senior vice president/general manager, home and small business group[36]
* Glenn E. Neland, senior vice president, procurement[37]
Additions announced include:
* Michael Dell, CEO and co-Chairman of the Board (previously Chairman of the Board)
* Don Carty, CFO and co-Chairman of the Board (previously Board member)
* Michael R. Cannon, former CEO of Solectron, as President, Global Operations[38]
* Ron Garriques, who formerly headed Motorola's mobile phone unit, as President, Global Consumer Group[39]
* Stephen F. Schuckenbrock, Senior Vice President, Global Services[40]
Mr. Dell announced a number of initiatives and plans (part of the "Dell 2.0" initiative) to improve the company's financial performance. These include:
* elimination of 2006 bonuses for employees with some discretionary awards
* reduction in the number of managers reporting directly to Mr. Dell from 20 to 12
* in a noted departure from previous years, "build, partner, and buy" to increase services capabilities
* reduction of "bureaucracy"
On April 23, 2008, Dell announced the closure of one of its biggest Canadian call-centers in Kanata, Ontario — terminating approximately 1100 jobs, with 500 of those redundancies effective on the spot, and with the official closure of the center scheduled for the summer. (The call-center had opened in 2006 after the city of Ottawa won a bid to host it. Less then a year later, Dell Inc planned to double its workforce to nearly 3,000 workers and to add a new building. Commentators[who?] cited the rise of the Canadian dollar against the American currency to near parity as well as the high payroll compared to other centers around the world as reasons for the redundancies.)[citation needed] The company had also announced the shutdown of its Edmonton, Alberta office, losing 900 jobs. In total, Dell announced the ending of about 8,800 jobs in 2007-2008 — up to[weasel words] 10% of its workforce.
* Business Class: including OptiPlex, Latitude, and Precision, where the company's advertising emphasizes long life-cycles, reliability and serviceability:
* OptiPlex - office desktop computer systems
* n Series - desktop and notebook computers shipped with Linux or FreeDOS installed
* Vostro - small-business desktop and notebook systems
* Latitude - commercially-focused notebooks
* Precision - workstation systems and high-performance notebooks. (Some of them including Linux pre-installed.[43])
* PowerEdge - business servers
* PowerVault - direct-attach and some network-attached storage (NAS)
* PowerConnect - network switches
* Dell EMC - storage area networks (SANs)
* EqualLogic - enterprise class iSCSI SANs
* Home/Consumer Class: including Inspiron, and XPS brands, emphasizing value, performance and expandability:
* Inspiron - consumer desktop and notebook systems
* XPS - enthusiast and high-performance desktop and notebook systems
* Alienware (XPS Extreme) - high-performance gaming systems
* Peripherals: Dell has also diversified its product line to include peripheral products such as USB keydrives, LCD televisions, and printers.
* Dell monitors LCD TVs, plasma TVs and projectors for HDTV and monitors
* Services and support:
* Dell On Call - extended support services (mainly for the removal of spyware and computer viruses)
* Dell Solution Center - extended support services (similar to "Dell On Call") for customers in the EMEA. The Solution Centers also support hardware for customers outside of warranty.
* Dell Business Support - a commercial service-contract that provides an industry-certified technician with a lower call-volume than in normal queues; it covers hardware- and some software-support.
Dell also offers Red Hat and SUSE Linux for servers; as well as "bare-bones" computers without pre-installed software (available on n Series by default and by request on XPS and Inspiron systems) at significantly lower prices. Due to Dell's licensing contract with Microsoft, Dell allegedly[citation needed] cannot offer those systems on their website and customers have to request them explicitly. (Dell does offer those systems on their web site at ). Dell has to ship such systems with a FreeDOS disk included in the box and must issue a so-called "Windows refund" or a merchandise credit after sale of the system at the "regular" retail price.
* Discontinued products/brands:
* Axim - PDAs using Microsoft's Windows Mobile (discontinued April 9, 2007[44])
* Dimension - home and "small office, home office" desktop computers (discontinued July 2007; replaced by Inspiron desktops)
* Dell Digital Jukebox - MP3 players (discontinued August 2006)
* Dell PowerApp - application-based severs
Dell has a general policy of manufacturing its products close to its customers, implementing just-in-time (JIT) manufacturing. Assembly of desktop computers for the North American market takes place at Dell plants in Lebanon TN, Austin TX, and Winston-Salem NC[citation needed]; with servers built in Austin TX. Dell assembles computers for the EMEA market at Limerick in the Republic of Ireland, and employs about 4,500 people in that country. European Manufacturing Facility 1 (EMF1, opened in 1990) and EMF3 form part of the Raheen Industrial Estate near Limerick. EMF2 (previously a Wang facility, later occupied by Flextronics, situated in Castletroy) closed in 2002,[citation needed] and Dell Inc has consolidated production into EMF3 (EMF1 now contains only offices[45]). Construction of EMF4 in Łódź, Poland has started, with production planned to start there in autumn 2007.[46]
Dell's assembly-plants in China and Malaysia assemble 95% of Dell notebooks. Dell Inc has invested an estimated 60 million US Dollars in a new manufacturing unit in Chennai, India, to support the sales of its products in the Indian subcontinent. Indian-made products will bear the "Made in India" mark on them. In 2007 the Chennai facility has the target of producing 400,000 desktop PCs, and in the later half of 2007 it will start producing notebook PCs and other products.[citation needed]
Dell has a Brazilian plant in the city of Eldorado do Sul, close to the state capital Porto Alegre, in the state of Rio Grande do Sul — that assembles the PowerEdge server line.[47]
Technical support
Dell routes technical support queries according to component-type and to the level of support purchased. Dell Inc brands its service agreements at five levels for their business customers:[48]
1. Basic support provides business-hours telephone support and next business-day on-site support.
2. Silver support provides 24×7 telephone support and 4-hour on-site support after telephone-based troubleshooting.
3. Gold support provides additional benefits over and above Silver support, including: customer-declared severity; priority access to support; expedited escalation of support; 4-hour on-site support in parallel with telephone-support.
4. Platinum Plus support provides additional benefits to Gold Support, including: performance benchmarking; real-time tracking; custom planning and reporting; a dedicated technical account-manager.
5. 2-hour on-site support, offered in some cities: mostly limited to major metropolitan areas.
Dell's Consumer division offers 24x7 phone based and online troubleshooting rather than only during business hours. Gold Technical support is not offered for customers purchasing through the consumer department, and neither is Same-Day Onsite response.
On 4 February 2008 Dell launched a revamped services-and-support scheme for businesses named "ProSupport", offering customers more options to tailor services to fit their needs. Rather than take a one-size-fits-all approach, Dell has put together packages of options for each category of its customers: small and medium-sized businesses, large businesses, government, education, and health-care- and life-sciences.
Dell now offers separate support options for IT staff and for non-IT professionals. For the latter, the company offers "how-to" support for software applications, such as Microsoft Office. Dell also offers collaborative support with many third-party software vendors. For IT departments, Dell offers "fast-track dispatch" of parts and labor and access to a crisis-center to handle major outages, virus-attacks, or problems caused by natural disasters.
Besides offering response-options for handling problems, Dell has launched "Proactive Maintenance", which offers assessment and recommendations for updating drivers and firmware and for the application of customer-approved patches and system-updates. Dell also offers assessment-services for storage area networks, as well as for Dell's computing hardware.
The new offerings replace Dell's tiered services-structure in which customers could choose from a variety of service levels, such as platinum, gold, or silver. The latest system takes a more customizable approach to support.
Dell associates a Service Tag, a unique alpha-numeric identifier, with most of its products, which resembles a serial number. The Service Tag number, represented in base 36, has a length of five or seven characters. Software can read the Service Tag in a computer's DMI table. Monitors bought as part of a computer system get support via the Service Tag of the computer. Monitors bought separately get support via the Dell Order Number or via the monitor's serial number.
Dell links its Service Tags to Express Service Codes, usually found together with the service tag on a sticker physically attached to a system. Computer-owners can usually find this tag on the bottom of laptops; or on the side or on the back of the computer tower of desktops. The Express Service Code, a purely numerical conversion of the service tag, serves for use in Dell's trunkline for routing a customer to the appropriate phone-technician. Dell's technical support for consumers requires the customer to enter in their Express Service Code into their touch-tone phone and if they do not provide it when prompted customers will experience increased hold-time before reaching a support-representative.
The DellConnect program, a remote-access tool, gives technicians within Dell Support the ability to access customer computers from a remote location for troubleshooting purposes. By using this tool, support technicians can analyze the configuration of a computer system, view and edit its files and software environment, view and comment on the screen, or take control of the computer system (with the customer's approval) to carry out troubleshooting.
As of 2007 Dell Inc replaced its proprietary remote-access tool with the newer DellConnect 2.0 manufactured by Citrix — a Dell-branded GoToAssist. After reaching the website, customers simply run this software, which can permit a support technician to view and work on their computer from a remote location; including the ability to reboot the computer remotely and continuing the same session, to share clipboards, and to redirect customers to a specific website.
World-wide technical support
In the Americas, Dell has Customer Contact Centers in Edmonton, Alberta; Ottawa, Ontario; Central Texas; Salt Lake City, Utah; Nashville, Tennessee; Chesapeake; Twin Falls, Idaho; Oklahoma City, Oklahoma; San Salvador, El Salvador; as well as in Glace Bay, Nova Scotia; Panama City, Panama and Tampa, Florida.
In the Asia-Pacific region Dell provides customer support from Pasay City and Quezon City, Philippines; Penang, Malaysia; and Xiamen and Dalian, China.
In India, Dell has customer support centers in the northern cities of Gurgaon and Mohali; and in the southern cities of Hyderabad and Bangalore.[49]
On January 31, 2008 Dell announced that it will be closing its call center in Edmonton, Alberta effective May 2, 2008, laying off over 900 workers and abandoning the sweetheart-deal it had agreed to with the city of Edmonton.

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