Dell Books Carty To Captain Its Finances
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Former AMR chairman left airline after executive pay scandal.
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(InfoWorld) - Stock in Dell was rising Monday on news thatÂ founder Michael Dell plans to remain as CEO for several years, trim the number of managers reporting directly to him, and eliminate bonuses. "We have a tough couple of quarters ahead. We didn't get here overnight, and we won't fix things overnight either," Dell wrote in a memo to employees on Friday. "Last year ... we had great efforts but not great results. This is disappointing, and it is unacceptable." Dell pointed to several problems with the company, including an overgrown bureaucracy and operating expenses that had grown too fast. "We have great people ... but we also have a new enemy: bureaucracy, which costs us money and slows us down. We created it, we subjected our people to it, and we have to fix it!" Dell said. "I am asking each of you to look across your organizations and eliminate redundancies." On Monday, a corporate spokeswoman confirmed the authenticity of the memo, which had been leaked to media over the weekend. The company has been buffeted in recent days by the resignation of CEO Kevin Rollins last Wednesday,Â Michael Dell announcing he would take over that job, and the accusation inÂ a lawsuit by investorsÂ on Friday that 15 top executives had garnered millions of dollars by selling their stock after propping up the company's faltering revenue with secret payments from Intel. Even before those blows landed, Dell was wobbling on a threat by the Nasdaq stock exchange to drop its stock unless the company files its overdue quarterly earnings reports.Â Dell has delayed filing those numbers for the past two terms as it struggles to satisfy an investigation by the U.S. Securities and Exchange Commission (SEC) of its accounting practices. It is not yet clear if that investigation is related to the investors' charges that Dell hid payments by Intel in exchange for staying exclusively loyal to one brand of microprocessor in its PCs. When Michael Dell announced on Wednesday he would return to his position as CEO, the company was already in the midst of a reorganization plan that calls for $100 million in spending to improve the customer service practices that allow it to bypass retail stores with its famed "direct sales" business model. The company was also following Rollins' plan toÂ remake itself as "Dell 2.0,"Â trying to move beyond an enormousÂ notebook PC battery recall in August by focusing on industrial design, overseas factories, and a move to diversify its computers by using chips fromÂ AMD as well as those from Intel. In his Friday memo, Dell added new details to that strategy. He promised to turn around the company by focusing on the SMB sector, enterprise servers and storage, shorter design cycles for new products, and increased sales in emerging markets. He also made a few corporate changes, recalling Paul Bell from his job running the company's markets in EMEA (Europe, the Middle East and Africa) to lead Dell's new Americas group, which includes the fast-growing SMB sector. Dell also created a "global operations" division to focus on manufacturing and procurement. "I remember what it's like to start a company. We're moving fast. There is no luxury of time. The competitors are fierce. The difference is this time we have many new assets and some hidden ones that can be brought out," he wrote. Dell did not describe the hidden assets he would use to rescue his company's prospects, but he hinted that Dell had enough resources to outspend its competition. AlthoughÂ Dell handed the title of world's largest PC vendor to HP this year, it is still a corporate colossus. "When I started back in 1984, it was just me. But now we are blessed to have an awesome team, many great assets, and $11 billion or so," Dell said. Â
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Dell is revamping its support-services offering as the company continues to battle shrinking growth in PC and server sales.
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Stock rises as memo reveals Michael Dell's plans for the company.
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By Yager, Tom  Investors and the SEC are going after Dell, but it shouldn't have to take the rap alone  I WROTE A COLUMN IN 2005 CALLED "HOW will Dell Offset the Loss of Intel's Generosity?" (infoworld.com/5060).
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MacCentral - Dell Inc. took the wraps off its holiday lineup on Thursday, showing new printers, plasma televisions and music players that will soon be available through its Web site.
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Dell is expected to expand its line of line of consumer electronics this week, possibly taking the wraps off of a challenger to Apple Computer&#39;s iPod Mini music player.
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In a memo to Dell Inc. employees days after returning as chief executive officer, Michael Dell said the beleaguered computer maker is quashing bonuses for 2006 and reducing managers to help cut costs and steer the company back toward dominance.
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(InfoWorld) - In a bid to reassure nervous investorsÂ in the wake of a federal investigationÂ and aÂ battery recall, Dell executives have announced a corporate overhaul dubbed "Dell 2.0." The strategy calls for Dell to recover from slumping profits by making a series of basic changes, such as building factories closer to emerging markets, and putting more emphasis on industrial design, Chief Executive Officer Kevin Rollins said Tuesday in New York at Dell's annual Technology Day. "We've spent the last 22 years following the Dell business model, but as the marketplace changes, the needs and desires of our customers have also changed," Rollins said. "We are re-evaluating every aspect of our business model, from supply chain and design to customer service and support." Dell is suffering through a brutal stretch. The company announced on Monday that it would delay filing its quarterly Form 10-Q because an investigation by the U.S. Securities and Exchange Commission had raised the possibility Dell might have to restate past quarterly earnings figures. And in August Dell worked with the Consumer Product Safety Commission to recall 4.1 million laptop batteries with a defect that could cause them to overheat and possibly catch fire. Under its new plan, the company will form a team of 60 designers by the end of 2006, dedicated to improving the design and usability of Dell PCs instead of focusing solely on price and performance. And the company has already begun to move away from its centralized production model by building PC factories in emerging markets like Brazil, India and Central Europe, he said. In other aspects of the overhaul, Dell said in July it wouldÂ begin using consistently low prices instead of complex rebates, and said in June it would offer enterprise-scale IT management to midsize companies under a Platinum Plus services plan. The strategy extends to products, too. Under the new strategy, Dell will continue to design PCs with chips from Advanced Micro Devices Inc. (AMD). Until recently, Dell had used only Intel Corp. processors, but this week launched two AMD-powered desktops and plans to sell AMD-based servers by the end of 2006. Dell's transition to a two-processor company is harder than simply swapping chips, said Chief Technology Officer Kevin Kettler. As Dell engineers create AMD-based PCs, they face a host of challenges -- testing and evaluating the systems, creating a logistics plan to supply processors to factories worldwide, and fitting the new components into their supply chain management plans. "Any time you bring on a new vendor to introduce a major piece of silicon, there's a natural process of aligning the new technology with our products," Kettler said. "I personally have worked for seven years with AMD on Dell's behalf, driving Opteron technology into the server space. This is not a short term, one-product-and-out deal, but a long-term relationship." In another design-centric change, Dell will join Hewlett-Packard Co. and Lenovo Group Ltd. to use DisplayPort, an interface standard that enables high-speed, two-way communications between PCs and displays. The new specs were approved in May by a governing body called the Video Electronics Standards Association. Under current technology, engineers use graphics controllers inside PCs and TVs to send signals to either digital or analog monitors ranging from CRTs (cathode ray tubes) to LCDs (liquid crystal displays) and plasma screens. "Those interfaces all just evolved, so you need to do development over three different interfaces with a multitude of technologies, and you can't take advantage of shared resources," said Kettler. In contrast, the new standard will use PCI (Peripheral Component Interconnect) Express interface to forge a "direct drive" link between the PC and monitor, always keeping the information in digital format. That will allow designers to build displays with embedded cameras and microphones, and will also preserve digital rights management, ensuring that data flowing across the cable can be only displayed, not copied, Kettler said. Â
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Dell Inc. DELL.O Chairman Michael   Dell on Tuesday threw his support behind Chief Executive Kevin   Rollins, while promising the computer maker was "working   diligently" to resolve its mounting problems.
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Dell Inc. DELL.O, the world's  largest PC maker, could announce an expanded selection of its  consumer electronics line in the next several weeks, a retail  industry analyst said on Wednesday.
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(InfoWorld) - The new team of leaders at Dell is weighing a request to give customers the option to purchase PCs with the Linux OS, instead of the default Windows, after thousands of users voted for that idea on a company blog. The idea appeared Friday on a company-hosted blog called Dell Idea Storm. CEO Michael Dell unveiled the blog Feb. 16 as part of hisÂ effort to reinvigorate the struggling company. Dell said he hoped to use the blog to collect users' feedback and improve customer service. Since then, company executives and department heads have been monitoring the site, paying closest attention to the ideas winning the most votes, Dell spokeswoman Caroline Dietz said on Wednesday. The most popular threads on Wednesday included demands for Linux-based laptops, consumer PCs that are not pre-loaded with unsolicited applications and requests for Sun Microsystems' OpenOffice applications instead of Microsoft's Office suite. Popular requests also included a preference for Mozilla's Firefox Web browser instead of Microsoft's Internet Explorer, and pleas for Dell to stop routing service calls to operators in overseas countries such as India. Dell leaders have heard those ideas "loud and clear," and plan to post a statement on the blog this week explaining how they will react, Dietz said. But she warned that the company would judge ideas on more than just their popularity. "Just because an idea is number one or number two doesn't necessarily mean Dell will do it, but it does mean it will receive the highest level of attention," she said. Dell has already changed the blog rules to make the voting more accurate, after the site was flooded over the weekend by certain users clicking multiple times on their favorite links, Dietz said. Beginning Wednesday, Dell required users to register, ensuring that each person can vote just once for each posting. Another misleading aspect of popular threads is that each vote awards postings 10 "points," meaning that the Linux thread has about six thousand supporters, not the posted number of 67,703. The second-most popular thread -- the request for OpenOffice -- has 40,572 points, and a plea to avoid unwanted software applications has 27,476 points. Most other ideas on the 95-page blog have won only a handful of votes. Despite the blog's problems, Dell will someday decide to sell Linux-based PCs in their consumer market, experts say. "Look, they already have a strong partnership with Red Hat and Oracle to move Linux into the enterprise server space. I think what they're waiting for is some more compelling applications to show up on Linux for personal use. Think about what you use your laptop for -- it's usually office, games, music and Internet access. When all of these things come together in a consumer-friendly, seamless way there will be a case for Dell to adopt Linux on portables to sell to the masses," said Joe Clabby, president of Clabby Analytics. "My 84 year-old father-in-law only needs his PC for light word processing and for AOL access. He can get plenty of Linux word processors -- but where's AOL Linux? When the right applications show up, and when they are integrated, it will all come together," Clabby said. Fixing Dell's finances could call for such a bold move. Once a Wall Street darling thanks to its innovative "direct sales" business model, Dell has struggled in recent months with falling profits, anÂ accounting investigationÂ by federal stock regulators, a lawsuit by disgruntled investors, aÂ notebook battery recallÂ and finally the resignation on Jan. 31 of Dell's hand-picked successor as CEO, Kevin Rollins. SinceÂ resuming his job as CEOÂ of the company he founded in 1984, Dell has moved quickly to restore investors' confidence by ousting several long-time executives and replacing them with leaders from outside technology companies including Motorola and Selectron. Â
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Dell Inc. will sell a notebook computer model at Sam's Club warehouse stores beginning next week, a company spokesman said Friday.
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Dell&#39;s efforts to reinvent itself this year through a dramatic break from its direct-sales model, expanded services, and new enterprise offerings have shown positive early results, but some users have lingering concerns about supply chain management and support -- long-time issues for the company.Weathering an accounting scandal and a slump in profit,&#160;founder Michael Dell reclaimed the helm of the company after CEO Kevin Rollins resigned in January, quickly replacing top managers and in May announcing plans to lay off 10 percent of the company&#39;s workforce.For years, Dell was the top PC vendor in the world, an acknowledged master of logistics in a business where margins can be razor-thin. It was efficient enough to keep prices low to ward off competition without suffering big setbacks in profits. But by 2006, when Hewlett-Packard unseated Dell as global PC leader, that was no longer the case.Dell&#39;s plans to regain its former dominance have resounded in the market. The company&#39;s third-quarter results, announced two weeks ago, showed profit increasing year over year, and record revenue of $15.65 billion. During the company&#39;s earnings call, Michael Dell said the company will put products on more retail shelves worldwide while also helping business customers &quot;simplify IT&quot; and reduce maintenance costs via customized hardware, software, and services.The company has also moved to put accounting issues behind it, recently&#160;completing an internal investigation and restating its financial results from fiscal 2003 to the first quarter of 2007.The company has been making an effort to build relationships with customers and partners and deliver products that are easier to deploy and manage, said Charles King, principal analyst at Pund-IT.Last month, Dell introduced a two-tier channel program designed to give partners better access to Dell&#39;s training, marketing, certification, and online resources. The program will provide a better chance for Dell to interact and understand its partners&#39; needs, the company said.&quot;The company seems to recognize that it has bridges to enhance with customers and partners in the channel. It&#39;s not something that&#39;s going to change overnight,&quot; King said.After years of success selling PCs directly to users, the consumer business&#39; direct-sales business model hit a wall as component prices fell, Pund-IT&#39;s King said. The strategy to simplify IT is a play at SMBs that will help Dell deliver better returns in the long term than its lower-margin direct consumer business, analysts said.However, some customers continue to have concerns about the company&#39;s support and supply chain issues.Dell is having supply shortages and can&#39;t get its servers and OptiPlex desktops to individuals and small businesses in a timely manner, said Josh Kaplan, who runs a franchise of computer support firm Rescuecom and purchases parts and interacts with Dell on behalf of customers.&quot;You can acquire all the technology you want, but Dell will send hardware out blindly,&quot; Kaplan said. It will be a challenge for Dell to deliver what it calls &quot;IT in a box&quot; -- its terms for packages of products and services -- to SMBs and enterprises, Kaplan said. Dell has traditionally delivered mostly standardized systems, Kaplan said. While Dell has built systems to order by letting users select from a menu of options, it does not have in-depth experience offering customers services over the lifecycle of products, he said.Jeremy Cole, owner of Proven Scaling, a small consulting firm with offices in the U.S. and U.K., said Dell has internal staffing issues that affect its support services.&quot;Dell&#39;s sales structure is really strange. They tend to bounce your company around to a new account representative every few months who are wildly differing in experience, intelligence, and understanding of the Dell sales system,&quot; Cole said.Cole is satisfied with Dell equipment but said the company needs to show more support for open-source applications and the Linux OS. &quot;It&#39;s clear that Dell cares about Linux in that all its server-class hardware is well-supported by the Linux kernel and it has many people dedicated to making sure that&#39;s the case. However, it&#39;s not good enough just to boot,&quot; Cole said.Though generally positive about Dell&#39;s support, Jason Dunn, who runs Thoughts Media, which publishes Web sites for technology enthusiasts, couldn&#39;t resolve certain LCD&#160;monitor problems with Dell offshore support representatives. He had good experiences with Dell&#39;s PC and HDTV support representatives, so the experience varies, Dunn said.Other users have had a good experience with Dell&#39;s strategy to simplify IT. Dell&#39;s efforts have paid dividends for Bikeworld.com, a medium-size retail business in San Antonio, which saved money by cutting its internal IT person. The company uses Dell systems with Microsoft Dynamics Retail Management System, connected to multiple offices via a VPN.&quot;Businesses are in a belt-tightening mode. You can&#39;t have extra people on payroll,&quot; said Whit Snell, general partner at Bikeworld.com. Bikeworld has resolved IT problems with Dell remotely and has a contact readily available to help with problems.Dell officials were not available for comment on support issues.Overall, Dell is trying to be more proactive and helpful, said Kurt Scherf, vice president and principal analyst at Parks Associates. Dell&#39;s new enterprise support services to simplify IT, like remote management services, could, if successful, trickle into the consumer segment, which could benefit end-users, Scherf said.Dell this year has tied up with retailers like Staples,&#160;Wal-Mart, and&#160;Best Buy&#160;to distribute PCs, something competitors HP and Acer have been successful at. But if Dell wants to make sure its customers aren&#39;t tempted by HP or Lenovo in the retail market, fixing problems that some users report about its support infrastructure has to be on top of the company&#39;s to-do list, Pund-IT&#39;s King said.Building out retail partnerships changes the consumer-facing relationships for Dell, which could lead to positive changes in the company&#39;s support and services. The results are a work in progress, King said.Balancing out its business model, Dell is showing signs that renewed efforts in the higher-end business sector are catching on, with third-quarter revenue growing in the server and storage markets. The enterprise market provides better margins than retail, and the remote management services market is growing, King said. Dell is trying to address that through acquisitions and by creating a services organization and specialized products targeted at professionals and businesses.The company this year&#160;acquired SAN (storage area network) vendor EqualLogic&#160;and managed services companies&#160;Everdream&#160;and Silverback. It announced a deal with Sun to offer the company&#39;s Solaris OS.Dell has been pushing hard to improve its systems management portfolio, especially remote desktop management capabilities that could help simplify complex IT infrastructures. In October, the company announced On-Demand Desktop Streaming, a server-based platform that streams the OS, applications and data to diskless desktop clients over a Gigabit Ethernet network.By offering design improvements and bundling software and services like remote management, Dell is trying to get the focus off of price and moving to build the framework for a new business model for the enterprise, said John Spooner, senior analyst at Technology Business Research.Dell&#39;s reinvention should come as no surprise as Michael Dell is on a mission to reconstruct his company, Pund-IT&#39;s King said. &quot;It must have been hard for Dell to see a company he built falter,&quot; King said. He is putting money in the right spots, and competitors like HP and IBM will do well to keep a close eye on Dell, King said.
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Dell has entered into an agreement with Wal-Mart that will put its desktops in 3,400 of the chain's stores beginning June 10, retailing for under $700.
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TechWeb - The PC maker begins selling the first of new brands and products recently promised by founder Michael Dell.
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DALLAS -- In the biggest executive shake-up yet after a string of disappointing earnings, eroding market share and an ongoing federal accounting probe, Michael Dell has returned to his role as chief executive officer of Dell Inc. _ the company he created in his college dorm room nearly 15 years ago.