Dell
 | |
 Headquarters in Round Rock, Texas | |
| Formerly |
|
|---|---|
| Type | Subsidiary |
| Nasdaq: DELL (until 2013) NYSE: DELL (since 2018) | |
| Industry | |
| Founded | May 3, 1984 in Austin, Texas, U.S. |
| Founder | Michael Dell |
| Headquarters | , U.S.[1] |
Area served | Worldwide |
Key people |
|
| Products |
|
| Revenue | 54,142,000,000 United States dollar (2014)  |
| −316,000,000 United States dollar (2014) | |
| −1,221,000,000 United States dollar (2014) | |
Number of employees | 165,000 (2020) |
| Parent | Dell Technologies (2016–present) |
| Website | www |
Dell Inc., formerly Dell Computer Corporation, is an American technology company that develops, sells, repairs, and supports personal computers (PCs), servers, data storage devices, network switches, software, computer peripherals including printers and webcams among other products and services. Dell is based in Round Rock, Texas.
Founded by Michael Dell in 1984, Dell started making IBM clone computers and pioneered selling cut-price PCs directly to customers,[2] managing its supply chain and electronic commerce.[3][4] The company rose rapidly during the 1990s[5] and in 2001 became the largest global PC vendor for the first time.[6] Dell was a pure hardware vendor until 2009 when it acquired Perot Systems. It then entered the market for IT services. The company has expanded storage and networking systems. In the late 2000s, it began expanding from offering computers only to delivering a range of technology for enterprise customers.[7][8]
Dell is a subsidiary of Dell Technologies, a publicly traded company, as well as a component of the NASDAQ-100 and S&P 500. The company is ranked 31st on the Fortune 500 list in 2022,[9] up from 76th in 2021.[10] It is also the sixth-largest company in Texas by total revenue, according to Fortune magazine. Dell is the second-largest non-oil company in Texas.[11][12] As of 2025,[update] it is the world's third-largest personal computer vendor by unit sales, after Lenovo and HP. In 2015, Dell acquired the enterprise technology firm EMC Corporation, together becoming divisions of Dell Technologies. Dell began marketing data storage, information security, virtualization, analytics, and cloud computing products under the brand Dell EMC until around 2020.[13][14]
History
[edit]
Founding and start-up
[edit]
Michael Dell founded the company in 1984 as PC's Limited. At the time, Dell was a student at the University of Texas at Austin[15] and operated the business from his off-campus dormitory room at the Dobie Center.[16] The aim was to sell IBM PC compatible computers built from stock components. He believed that by selling personal computer systems directly to customers, their needs could be better understood, and thus his company could succeed by providing the most effective computing services.[17] After getting about $1,000 in expansion-capital from his family, Dell dropped out of college upon completion of his freshman year in order to focus full-time on his fledgling business.[18] As of April 2021, Dell's net worth was estimated to be over $50 billion.[19]
In 1985 PC's Limited launched its first computer — the Turbo PC — priced at US$795 (equivalent to $1,963 in 2024).[20] It featured an Intel 8088-compatible processor with a maximum speed of 8 MHz.[21] At that time, PC's Limited was considered one of many white box vendors, though by 1986 Hughes Aircraft was evaluating its products for corporate use after an executive's positive experience with a personal purchase.[22] Systems were marketed through national computer magazines, selling directly to consumers while custom-assembling each unit based on a range of options. This approach allowed offering competitive prices compared to retail brands, coupled with the convenience of pre-assembled units, making them one of the early success stories of this business model. The company grossed over $73 million in its first year of operation.[citation needed]
In 1987 the company was renamed Dell Computer Corporation and began expanding globally. The new name was intended to better reflected its presence in the business market, and also resolved issues with the use of the word "Limited" in a company name in the United Kingdom.[23][24] The company set up its first international operations in Britain, and eleven more followed within the next four years.[citation needed] On June 22, 1988, the company went public on NASDAQ under the ticker symbol DELL. Their IPO of $8.50 a share raised $30 million, leaving the company valued at $85 million (equivalent to $193.9 million in 2025).[25] In 1989, the company launched its first laptop product, the Dell 316LT.[26]
Growth in the 1990s and early 2000s
[edit]
In 1990, Dell Computer 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 included Dell Computer Corporation in its list of the world's 500 largest companies, making Michael Dell the youngest CEO of a Fortune 500 company at that time.
Senior vice president Joel Kocher told The Wall Street Journal in 1993 "this isn't a technology business anymore". His view, that PCs were commodities, was reportedly widely held by others in the company. They thought that Dell differentiated itself from others—like fellow Texas company and archrival Compaq—with its distribution expertise and "database engine" of customers that, Kocher said, could sell anything including non-technology products: "We're more like Mary Kay Cosmetics than we are like General Motors".[27]
In 1993, to complement its own direct sales channel, Dell planned to sell PCs at big-box retail outlets such as Wal-Mart, which would have brought in an additional $125 million (equivalent to $244,400,000 in 2024) in annual revenue. Bain consultant Kevin Rollins persuaded Michael Dell to pull out of these deals, believing they would be money losers in the long run.[28] Margins at retail were thin at best and Dell left the reseller channel in 1994.[29] Rollins would soon join Dell full-time and eventually become the company president and CEO.
By the early 1990s the laptop computer market was both more profitable and faster-growing than the overall personal computer market. After discontinuing its unsuccessful existing products in 1993, and hiring John Medica—who had led development of the very successful Apple PowerBook—the company in 1994 introduced the Dell Latitude laptop line.[30][31][32]
Originally, Dell did not emphasize the consumer market, due to the higher costs and low profit margins in selling to individuals and households; this changed when the company's Internet site took off in 1996 and 1997.[18] While the industry's average selling price to individuals was going down, Dell's was going up, as second- and third-time computer buyers who wanted powerful computers with multiple features and did not need much technical support were choosing Dell. Dell found an opportunity among PC-savvy individuals who liked the convenience of buying direct, customizing their PC to their means, and having it delivered in days. In early 1997, Dell created an internal sales and marketing group dedicated to serving the home market and introduced a product line designed especially for individual users.[29]
| Year | Revenue
(mill. US$) |
No. of
employees |
|---|---|---|
| 1990 | 546 | 2,050 |
| 1991 | 889 | 2,970 |
| 1992 | 2,013 | 4,650 |
| 1993 | 2,873 | 5,980 |
| 1994 | 3,475 | 6,400 |
| 1995 | 5,296 | 8,400 |
| 1996 | 7,759 | 10,350 |
| 1997 | 12,327 | 16,000 |
| 1998 | 18,243 | 24,400 |
| 1999 | 25,256 | 36,500 |
From 1997 to 2004, Dell steadily grew and it gained market share from competitors even during industry slumps, with its fastest growth occurring in the early 2000s. During the same period, rival PC vendors such as Compaq, Gateway, IBM, Packard Bell, and AST Research struggled and eventually left the market or were bought out.[34] Dell surpassed Compaq to become the largest PC manufacturer in 1999.[35] Operating costs made up only 10 percent of Dell's $35 billion in revenue in 2002 (equivalent to $58,170,000,000 in 2024), compared with 21 percent of revenue at Hewlett-Packard, 25 percent at Gateway, and 46 percent at Cisco.[36] In 2002, when Compaq merged with Hewlett-Packard (the fourth-place PC maker), the newly combined Hewlett-Packard took the top spot for a time but struggled and Dell soon regained its lead.[3]
In 2002, Dell expanded its product line to include televisions, handhelds, digital audio players, and printers. Chairman and CEO Michael Dell had repeatedly blocked President and COO Kevin Rollins's attempt to lessen the company's heavy dependency on PCs, which Rollins wanted to fix by acquiring EMC Corporation; a move that would eventually occur over 12 years later.[37]
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.[38]
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 (equivalent to $396,700,000 in 2024) in incentives and tax breaks. In July, Michael Dell stepped aside as chief executive officer while retaining his position as chairman of the board.[39] Kevin Rollins, who had held a number of executive posts at Dell, became the new CEO. Despite no longer holding the CEO title, Dell essentially acted as a de facto co-CEO with Rollins.[37]
Under Rollins, Dell purchased the computer hardware manufacturer Alienware in 2006. Dell Inc.'s plan anticipated Alienware continuing to operate independently under its existing management. Alienware expected to benefit from Dell's efficient manufacturing system.[40]
Struggles in mid-2000s
[edit]
In 2005, while earnings and sales continued to rise, sales growth slowed considerably, and the company stock lost 25% of its value that year.[41] By June 2006, the stock traded around US$25 which was 40% down from July 2005—the high-water mark of the company in the post-dotcom era.[42][43]
The slowing sales growth has been attributed to the maturing PC market, which constituted 66% of Dell's sales, and analysts suggested that Dell needed to make inroads into non-PC business segments such as storage, services, and servers. Dell's price advantage was tied to its ultra-lean manufacturing for desktop PCs,[44] but this became less important as savings became harder to find inside the company's supply chain, and as competitors such as Hewlett-Packard and Acer made their PC manufacturing operations more efficient to match Dell, weakening Dell's traditional price differentiation.[45] Throughout the entire PC industry, declines in prices along with commensurate increases in performance meant that Dell had fewer opportunities to upsell to their customers. As a result, the company was selling a greater proportion of inexpensive PCs than before, which eroded profit margins.[34] The laptop segment had become the fastest-growing of the PC market, but Dell produced low-cost notebooks in China like other PC manufacturers which eliminated Dell's manufacturing cost advantages, plus Dell's reliance on Internet sales meant that it missed out on growing notebook sales in big box stores.[42] CNET has suggested that Dell was getting trapped in the increasing commoditization of high volume low margin computers, which prevented it from offering more exciting devices that consumers demanded.[44]
Despite plans of expanding into other global regions and product segments, Dell was heavily dependent on US corporate PC market, as desktop PCs sold to both commercial and corporate customers accounted for 32 percent of its revenue, 85 percent of its revenue comes from businesses, and 64 percent of its revenue comes from North and South America, according to its 2006 third-quarter results. US shipments of desktop PCs were shrinking, and the corporate PC market, which purchases PCs in upgrade cycles, had largely decided to take a break from buying new systems. The last cycle started around 2002, three or so years after companies started buying PCs ahead of the perceived Y2K problems, and corporate clients were not expected to upgrade again until extensive testing of Microsoft's Windows Vista (expected in early 2007), putting the next upgrade cycle around 2008.[46][47] Heavily dependent on PCs, Dell had to slash prices to boost sales volumes, while demanding deep cuts from suppliers.[37]
Dell had long stuck by its direct sales model. Consumers had become the main drivers of PC sales in recent years,[47] yet there had a decline in consumers purchasing PCs through the Web or on the phone, as increasing numbers were visiting consumer electronics retail stores to try out the devices first. Dell's rivals in the PC industry, HP, Gateway and Acer, had a long retail presence and so were well poised to take advantage of the consumer shift.[48] The lack of a retail presence stymied Dell's attempts to offer consumer electronics such as flat-panel TVs and MP3 players.[44] Dell responded by experimenting with mall kiosks, plus quasi-retail stores in Texas and New York.[46]
Dell had a reputation as a company that relied upon supply chain efficiencies to sell established technologies at low prices, instead of being an innovator.[37][48][49] By the mid-2000s many analysts were looking to innovating companies as the next source of growth in the technology sector. Dell's low spending on R&D relative to its revenue (compared to IBM, Hewlett-Packard, and Apple Inc.)—which worked well in the commoditized PC market—prevented it from making inroads into more lucrative segments, such as MP3 players and later mobile devices.[41] Increasing spending on R&D would have cut into the operating margins that the company emphasized.[3] Dell had done well with a horizontal organization that focused on PCs when the computing industry moved to horizontal mix-and-match layers in the 1980s, but by the mid-2000 the industry shifted to vertically integrated stacks to deliver an end-to-end IT product, and Dell lagged far behind competitors like Hewlett-Packard and Oracle.[45]
In 2006, Dell rolled out DellConnect to answer customer inquiries more quickly. In July 2006, the company started its Direct2Dell blog, and then in February 2007, Michael Dell launched IdeaStorm.com, asking customers for advice including selling Linux computers and reducing the promotional "bloatware" on PCs. These initiatives did manage to cut the negative blog posts from 49% to 22%, as well as reduce the "Dell Hell" prominent on Internet search engines.[42][50]
There was also criticism that Dell used faulty components for its PCs, particularly the 11.8 million OptiPlex desktop computers sold to businesses and governments from May 2003 to July 2005 that suffered from faulty capacitors.[51] A battery recall in August 2006, as a result of a Dell laptop catching fire, caused much negative attention for the company though later, Sony was found responsible for the manufacturing of the batteries, however a Sony spokesman said the problem concerned the combination of the battery with a charger, which was specific to Dell.[52]
2006 marked the first year that Dell's growth was slower than the PC industry as a whole. By the fourth quarter of 2006, Dell lost its title of the largest PC manufacturer to Hewlett Packard whose Personal Systems Group was invigorated thanks to a restructuring initiated by their CEO Mark Hurd.[41][53][54]
SEC investigation
[edit]In August 2005, Dell became the subject of an informal investigation by the United States SEC.[55] In 2006, the company disclosed that the US Attorney for the Southern District of New York had subpoenaed documents related to the company's financial reporting dating back to 2002.[56] The company delayed filing financial reports for the third and fourth fiscal quarter of 2006, and several class-action lawsuits were filed.[57] Dell Inc's failure to file its quarterly earnings report could have subjected the company to de-listing from the Nasdaq,[58] but the exchange granted Dell a waiver, allowing the stock to trade normally.[59] In August 2007, the company announced that it would restate its earnings for fiscal years 2003 through 2006 and the first quarter of 2007 after an internal audit found that certain employees had changed corporate account balances to meet quarterly financial targets.[60] In July 2010, the SEC announced charges against several senior Dell executives, including Dell Chairman and CEO Michael Dell, former CEO Kevin Rollins, and former CFO James Schneider, "with failing to disclose material information to investors and using fraudulent accounting to make it falsely appear that the company was consistently meeting Wall Street earnings targets and reducing its operating expenses." Dell, inc. was fined $100 million, with Michael Dell personally fined $4 million.[61]
Dell 2.0 and downsizing
[edit]After four out of five quarterly earnings reports were below expectations, Rollins resigned as president and CEO on January 31, 2007, and founder Michael Dell assumed the role of CEO again.[62]
On March 1, 2007, the company issued a preliminary quarterly earnings report showing 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.[63]
Dell announced a change campaign called "Dell 2.0," reducing the number of employees and diversifying the company's products.[48][64] While chairman of the board after relinquishing his CEO position, Michael Dell still had significant input in the company during Rollins' years as CEO. With the return of Michael Dell as CEO, the company saw changes in operations, the exodus of many senior vice-presidents and new personnel brought in from outside the company.[46] Michael 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 Michael Dell from 20 to 12, and reduction of "bureaucracy". Jim Schneider retired as CFO and was replaced by Donald Carty, as the company came under an SEC probe for its accounting practices.[65]
On April 23, 2008, Dell announced the closure of one of its biggest Canadian call-centers in Kanata, Ontario, terminating approximately 1100 employees, 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 than a year later, Dell planned to double its workforce to nearly 3,000 workers add a new building. These plans were reversed, due to a high Canadian dollar that made the Ottawa staff relatively expensive, and also as part of Dell's turnaround, which involved moving these call-center jobs offshore to cut costs. [66] 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 — 10% of its workforce.[67]
By the late 2000s, Dell's "configure to order" approach of manufacturing—delivering individual PCs configured to customer specifications from its US facilities was no longer as efficient or competitive with high-volume Asian contract manufacturers as PCs became powerful low-cost commodities.[4][68] Dell closed plants that produced desktop computers for the North American market, including the Mort Topfer Manufacturing Center in Austin, Texas (original location)[69][70] and Lebanon, Tennessee (opened in 1999) in 2008 and early 2009, respectively. The desktop production plant in Winston-Salem, North Carolina, received US$280 million in incentives from the state and opened in 2005 (equivalent to $430,900,000 in 2024), but ceased operations in November 2010. Dell's contract with the state required them to repay the incentives for failing to meet the conditions, and they sold the North Carolina plant to Herbalife.[71][72][73] Much work was transferred to manufacturers in Asia and Mexico, or some of Dell's own factories overseas.[68] On January 8, 2009, Dell announced the closure of its manufacturing plant in Limerick, Ireland, with the loss of 1,900 jobs and the transfer of production to its plant in Łodź in Poland.[74]
Attempts at diversification
[edit]
The release of Apple's iPad tablet computer had a negative impact on Dell and other major PC vendors, as consumers switched away from desktop and laptop PCs. Dell's own mobility division has not managed success with developing smartphones or tablets, whether running Windows or Android.[75][76] The Dell Streak was a failure commercially and critically due to its outdated OS, numerous bugs, and low resolution screen. InfoWorld suggested that Dell and other OEMs saw tablets as a short-term, low-investment opportunity running Google Android, an approach that neglected user interface and failed to gain long term market traction with consumers.[77][78] Dell has responded by pushing higher-end PCs, such as the XPS line of notebooks, which do not compete with the Apple iPad and Kindle Fire tablets.[79] The growing popularity of smartphones and tablet computers instead of PCs drove Dell's consumer segment to an operating loss in Q3 2012. In December 2012, Dell suffered its first decline in holiday sales in five years, despite the introduction of Windows 8.[80]
In the shrinking PC industry, Dell continued to lose market share, as it dropped below Lenovo in 2011 to fall to number three in the world. Dell and fellow American contemporary Hewlett Packard came under pressure from Asian PC manufacturers Lenovo, Asus, and Acer, all of which had lower production costs and were willing to accept lower profit margins. In addition, while the Asian PC vendors had been improving their quality and design—for instance, Lenovo's ThinkPad series was winning corporate customers away from Dell's laptops—Dell's customer service and reputation had been slipping.[81][82] Dell remained the second-most profitable PC vendor, as it took 13 percent of operating profits in the PC industry during Q4 2012, behind Apple's Mac that took 45 percent, seven percent at Hewlett Packard, six percent at Lenovo and Asus, and one percent for Acer.[83]
Dell attempted to offset its declining PC business, which still accounted for half of its revenue and generates steady cash flow,[84] by expanding into the enterprise market with servers, networking, software, and services.[85] It avoided many of the acquisition write-downs and management turnover that plagued its chief rival Hewlett Packard.[76][86] Despite spending $13 billion on acquisitions to diversify its portfolio beyond hardware,[87] the company was unable to convince the market that it could thrive or made the transformation in the post-PC world,[86] as it suffered continued declines in revenue and share price.[88][89][90][91] Dell's market share in the corporate segment was previously a "moat" against rivals but this has no longer been the case as sales and profits have fallen precipitously.[92]
2013 privatization
[edit]After several weeks of rumors, which started around January 11, 2013, Dell announced on February 5, 2013, that it had struck a $24.4 billion (equivalent to $32,310,000,000 in 2024) leveraged buyout deal, that would have delisted its shares from the NASDAQ and Hong Kong Stock Exchange and taken it private.[93][94][95] Reuters reported that Michael Dell and Silver Lake Partners, aided by a $2 billion loan from Microsoft, would acquire the public shares at $13.65 apiece.[96] The $24.4 billion buyout was projected to be the largest leveraged buyout backed by private equity since the 2008 financial crisis (equivalent to $35,460,000,000 in 2024).[97] It is also the largest technology buyout ever, surpassing the 2006 buyout of Freescale Semiconductor for $17.5 billion (equivalent to $26,120,000,000 in 2024).[97]
Michael Dell said of the February offer "I believe this transaction will open an exciting new chapter for Dell, our customers and team members".[98] Dell rival Lenovo responded to the buyout, saying, "the financial actions of some of our traditional competitors will not substantially change our outlook."[98]
In March 2013, the Blackstone Group and Carl Icahn expressed interest in purchasing Dell.[99] In April 2013, Blackstone withdrew their offer, citing deteriorating business.[100][101] Other private equity firms such as KKR & Co. and TPG Capital declined to submit alternative bids for Dell, citing the uncertain market for personal computers and competitive pressures, so the "wide-open bidding war" never materialized.[87] Analysts said that the biggest challenge facing Silver Lake would be to find an "exit strategy" to profit from its investment, which would be when the company would hold an IPO to go public again, and one warned "But even if you can get a $25bn enterprise value for Dell, it will take years to get out."[102]
In May 2013, Michael Dell joined his board in voting for the offer.[103] The following August he reached a deal with the special committee on the board for $13.88 per share, a raised price of $13.75 plus a special dividend of 13 cents, as well as a change to the voting rules.[104] The $13.88 cash offer (plus a $.08 per share dividend for the third fiscal quarter) was accepted on September 12[105] and closed on October 30, 2013, ending Dell's 25-year run as a publicly traded company.
After the buyout, the newly private Dell offered a Voluntary Separation Program that they expected to reduce their workforce by up to seven percent. The reception to the program so exceeded the expectations that Dell may be forced to hire new staff to make up for the losses.[106]
Birth of Dell Technologies Inc.
[edit]On October 12, 2015, Dell Inc. announced its intent to acquire EMC Corporation.[107][108] On September 7, 2016, the merger was completed.[109] Resulting from the merger, a new parent company was formed — Dell Technologies Inc.[109][110]
Brand restructuring
[edit]In 2025 a major shake up of branding occurred, affecting mainstream products including desktops, laptops, workstations, and monitors. Significant further refinement took place in a further restructuring in 2026. These events saw decades-old brand names discarded in favour of branding around the Dell name.
Dell and AMD
[edit]When Dell acquired Alienware early in 2006, some Alienware systems had AMD chips. On August 17, 2006, a Dell press release[111] stated that starting in September, 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 Dell's tradition of only offering Intel processors in Dell PCs.
CNET's News.com on August 17, 2006, cited Dell's CEO Kevin Rollins as attributing the move to AMD processors to lower costs and to AMD technology.[112] 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.
On November 1, 2006, Dell's website began offering notebooks based on AMD processors (the Inspiron 1501 with a 15.4-inch (390 mm) display) with the choice of a single-core MK-36 processor, dual-core Turion X2 chips or Mobile Sempron.[113]
In 2017, Dell released the AlienWare 17 gaming laptop. The model was primarily based on NVIDIA GeForce GTX 1080 systems.[114]
Dell and desktop Linux
[edit]In 1998, Ralph Nader asked Dell (and five other major OEMs) to offer alternate operating systems to Microsoft Windows, specifically including Linux, for which "there is clearly a growing interest".[115][116] Possibly coincidentally, Dell started offering Linux notebook systems that "cost no more than their Windows 98 counterparts" in 2000,[117] and soon expanded, with Dell becoming "the first major manufacturer to offer Linux across its full product line".[118] However, by early 2001 Dell had "disbanded its Linux business unit."[119]
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