Nov 12, 2008
"There are a lot of things that go into creating success. I don't like to do just the things I like to do. I like to do things that cause the company to succeed. I don't spend a lot of time doing my favorite activities."
Those are the words of a man who became an entrepreneur at a very young age of 12, made his first $1,000 by selling stamps, and later sold newspaper subscriptions for Houston Post, making enough money to buy a BMW at 16. This young and ambitious boy had his plans well on track by 19.
He went to college to study biology as his parents wanted him to be a doctor, but a year later, he gave up studies to follow his dreams.
Today, the world knows him as billionaire college dropout who converted a simple idea into a billion-dollar business.
Meet Michael Dell, the founder of Dell Inc, one of the world's most successful IT companies. Forbes estimates Dell's net worth to be around $17.3 billion.
"Twenty years and $40 billion. They seem like good round numbers."
Michael Saul Dell was born on February 23, 1965 in Houston. His father was an orthodontist and mother, a money manager. Dell was interested in computers from a very young age. He joined the University of Texas but later gave up studies to pursue his entrepreneurial dream.
His parents got him an Apple II computer when he was 15. He disassembled the computer to find out how it worked, much to the shock of his parents.
Later, he bought an IBM computer and studied more all about making and upgrading computers, finally mastered the technique of assembling computers.
"It's customers that made Dell great in the first place, and if we're smart enough and quick enough to listen to customer needs, we'll succeed."
In 1984 with $1,000, he gave shape to his dream venture. From his room in the university, Dell started working on his business plan. His idea was to assemble computers according to customers' preferences and sell them directly.
He named the start-up PC's Limited. Dell's approach was unique. He set a new beginning with low-cost, customised personal computers, something no one had tried earlier.
He was the first to introduce the direct sales method in the IT industry. The direct sales clicked and there was huge demand for computers. Dell knew that he could beat computer dealers by selling a lower prices with good technical service.
"From the time I was 7, when I purchased my first calculator, I was fascinated by the idea of a machine that could compute things."
Most of his orders were placed through friends and acquaintances who spread the word around. He moved to a small office and hired a few people to take orders and upgrade machines. Avoiding a third party to sell computers turned out to be profitable and the company grew at a seriously fast clip.
In May 1983, Dell incorporated the company as Dell Computer Corporation. In 1985, Dell started to design and make computers with components sourced from outside. His focus, right from the beginning, was on customers and good service.
By 1992, Dell Computer Corporation entered the Fortune 500 list of the largest companies in the world. At the age of 27, he became the youngest CEO of a Fortune 500 company.
Dell computers on sale at a Staples store in Miami, Florida
"It's through curiosity and looking at opportunities in new ways that we've always mapped our path at Dell. There's always an opportunity to make a difference."
The company was also one of the very first to sell computers on the Internet. This too became a huge hit. In 1999, Dell launched Gigabuys.com, an online store featuring computer-related products.
The company continued to grow become the No. 1 player in the American market. Dell Computer Corporation became 'Dell Inc'. The company expanded its product portfolio to include home entertainment systems and personal devices.
From a $1,000 company to IT giant worth more than $100 billion, it's been a successful journey for Dell. Today, the multinational employs more than 88,000 people worldwide. As of 2008, it is ranked as the world's No. 2 in terms of computer sales, behind Hewlett-Packard.
According to the company, an average of about 140,000 systems are shipped by it per day. Ranked 34 among the Fortune 500 companies, 24 of the world's top supercomputers run on Dell. The company's global headquarters campus is powered by 100 per cent green energy. The company won 400 product awards in 2007.
Microsoft chairman Bill Gates (L) speaks as Dell CEO Michael Dell listens in New York.
"Our business is about technology, yes. But it's also about operations and customer relationships."
Michael Dell also has philanthropic interests. In 1999, he and his wife formed the Michael & Susan Dell Foundation, to manage the investments and philanthropic efforts of the Dell family. With his wife, he formed the Michael and Susan Dell Foundation, which has an endowment of more than $1 billion and focusses on children's issues.
Dell Inc encourages philanthropy among its employees and executives. The programme is one of the top employee campaigns in central Texas.
Dell also serves on the Foundation Board of the World Economic Forum, the executive committee of the International Business Council and is a member of the US Business Council. He also serves on the US President's Council of Advisors on Science and Technology, the Technology CEO Council, and on the governing board of the Indian School of Business in Hyderabad, India.
Headquarters of Dell Inc in Langen, Germany
"Nice guys finish last."The company has had its share of ups and downs. In the wake of the global recession, the company is planning a freeze on hiring, it has cut thousands of jobs and taken several other cost-cutting measures. Michael Dell recently said: "We are positioning Dell to win in a new era of global IT spending. We have our most competitive product portfolio ever, whether for digital nomads or hyper-scaled data centres."
"Our growth affirms we are on track with our five key business priorities: notebooks, consumers, enterprise, SMB, and emerging countries. Looking ahead, we will focus on the five priority areas to improve competitiveness, optimize growth, earnings and cash flow, and will continue to incur costs as we realign the business, reduce headcount, and invest in infrastructure and acquisitions. We aim at achieving annualised cost reductions of at least $3 billion by 2011."
The net income was $616 million in the second quarter of this fiscal year, down 17 per cent from a profit of $746 million in the same period last year. Revenue grew 11 per cent to $16.43 billion from $14.77 billion year-on-year.
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