RSSMichael Dell: Evolving Past the Direct Sales Model
By Scott M. Fulton, III | Published April 30, 2007, 6:26 PM
In a memo to his employees leaked to the press like a sieve from multiple sources over the weekend, Dell Computer CEO Michael Dell advised his employees that in the company's coming reorganization, quite a few possibilities are on the table, including a move beyond the direct sales model he himself devised and championed.
"The Direct Model has been a revolution, but it is not a religion," Mr. Dell writes. "We will continue to improve our business model, and go beyond it, to give our customers what they need. We will simplify our organization to make it easier to hear customers and respond to them."
It's exactly the advise IDC's Quarterly PC Report chief researcher David Daoud gave Dell in a recent interview with BetaNews. "What Dell needs to do is go through a period of time where they need to revisit, how is the company working internally, who is responsible for what, how is the company structured, what kind of channels is it going to be using," Daoud told us last week. "These are very critical aspects of the business that the consumer out there is not necessarily close to or knowledgeable of."
Last February, Dell hired former Solectron CEO Michael R. Cannon as President of Global Operations - the new #2. In his memo, Mr. Dell states he's already put Cannon to work re-evaluating the company's manufacturing and supply chain, and exploring the very real possibility of a new manufacturing and distribution model. It was Dell's existing model in this regard that is credited with having made his company an American success story.
But in a tremendously changing market, and with the business PC becoming, by many accounts, "commoditized" - a kind of service with a predictable cycle, which one supplier can provide almost as easily as another - Dell Computer no longer appears to have the same edge. Customers expect suppliers to distinguish themselves with service and support; and to that end, that company may have chosen the exact wrong time to outsource much of that function.
In his memo, Michael Dell appears to give every indication that he gets it - that he understands the problem as intensely as he understood the problem facing him a quarter century ago, during the foundation of PCs Limited.
"For those of us who have worked for a while in this industry, we know our competitors drive complexity and needless cost into customers' environments," he writes. "These so-called 'service divisions' create a never-ending cycle of activity with unclear return on investment. We intend to break this cycle. We will build different kinds of services and offer key technologies that will help customers escape this complexity trap and unlock the true potential of technology."
In other words, Mr. Dell intends to distinguish Dell Computer by making it possible to not offer the extended services that competitors such as Hewlett-Packard rely upon to cement customer relationships, as if problems are the only platform upon which solutions can be delivered.
Of course, this time around, Mr. Dell has the extra burden of overcoming an established bureaucracy, so it will be interesting to learn how well his "One Dell" message is being received internally. Possibly, the very leak of the memo could be indication from company insiders that they're willing to risk a rap on the wrist if it means getting out the message that their company is, in their view, headed for recovery.
"In the case of Dell, it's worked quite well up until recently," David Daoud told BetaNews, "but now they're facing a change, a shift in the market, which will force them to revisit their business model."
"This is a defining moment in our history and in our relationships with our customers," Michael Dell closed. "Just as we re-invented the way consumers and organizations buy hardware, we are going to re-invent the way the world gets access to IT."
The best manufactured computers I ever had were the Dell desktop and laptop I had 5 years ago. They were much more reliable than the 2 HP and 1 compaq I had previously. I have to say that since I built the system I have now and the previous that I will neer have another Dell or anything else unless it's a laptop.
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|Dell better do somthing because HP is eating them for lunch AND dinner...LOL
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|Our company is entirely Dell. Our parent company (part owner) is 100% HP. Comparing our maintenance experiences has shown almost identical numbers of identical problems. It's a wash. All this "my brand is better than yours" is dumb. Maybe we're just "lucky", but we have 5000 clients and 220 servers. Our parent company has 17000 clients and 580 servers. Those are reasonable numbers for collecting metrics. So if you're happy buying brand X, than good for you. I've had dogs made by almost every manufacturer, so I try to keep it in perspective that there are always lemons and it's hard to judge a brand by less than a few hundred examples to actually base things on.
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|His computers make HP's look like Bentley's compared to his crap. He'd have to come up three steps to be better than Lenovo or Gateway.
Last thing I knew Gateway built computer only a little better than Pacard bell use to in the day. Dell doesn't claim to make the best computers around. They use to have great customer service, but that has gone down because of outsourcing.
I don't buy computers from manufacturers that I can't pick my parts or at least know what parts go in it. My current computer I got from PC Club and I picked out every part, they just built it. Every computer before that I built myself (but not its just as cheap to have someone else build it and make sure it works with a 3 year warranty and all on top of it).
My friend got an HP laptop and he loves it, and another friend got an HP desktop and she loves it. HP makes decent things for the average consumer.
I agree Dell should let you pick from their cheap parts if you want a cheap computer and have a couple high end motherboards from Asus, and good ram. I guess thats why now they have Alienware for their high end computers.
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|I currently have an HP notebook. This one is really nice but I've had some dogs too. The ze1230 was probably the worst they've ever made and I have one. I gave it to my daughters and set it up in our kitchen so they can be supervised while playing and visiting kids sites like nickjr and FunBrain.
It's basically just a web browser and email checker, which is all it was designed for apparently.
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|i mean, sure, i can pretend that i know more about testing and hardware compatibility that a multibillion dollar company, but im doing more to feed my ego than i am to line my wallet with savings. of the systems i've built, none of them end up with the kind of warranty and reliability you'd get from a dell or an hp despite the use of "only high end reliable parts." If something goes wrong with your dell, your point of contact is dell, not 15 different parts manufactures for varying levels of warranty service.
This is by no means an affirmation of Dell's reliability. I think they're crap. Just pointing out the pros and cons.
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|reliability from Dell? dont make me laugh NULLedge
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|Michael Dell builds the s***tiest computers with the absolute cheapest motherboards and parts from all of the third world.
His computers make HP's look like Bentley's compared to his crap. He'd have to come up three steps to be better than Lenovo or Gateway.
I hope he goes bankrupt and shoots himself.
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|Did Michael Dell kick your dog too?
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|I am taking a guess you had or knew someone who had a bad experience with dell? I personally have owned 2, a laptop about 6 years ago and a desktop from about 4 years ago. I financed both of them and that is where they have some problems. I have a fico score of almost 800 and I didn't even qualify for the great and wonderful low finance rate and special deal, for well qualified. So my interest rate was like 19 percent!
So yeah, I would love to know what "well qualified" means. Their computers were ok and used industry standard parts you could upgrade easilly. Just get that customer service and financing fixed. Everywhere I go I see Dell, where I work, Government computersr, library, doctor offices, tv shows etc. They are everywhere, who the heck is HP selling all these computers to? I very rarely see them, outside of the hands of best buy etc.
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|I've reformatted and fixed plenty of Dell notebooks, mostly the Inspiron 1200 which is the POS most parents send their kids off to college with.
These idiots make it so the monitor doesnt even display correctly until you install the correct drivers, which you can only access after you have used another computer to find the wireless card drivers from the Dell website.
You then need to install about a dozen other drivers one by one because these d***s dont have restore discs with Windows AND thier drivers all on one disc. Unlike HP and Toshiba which have a killer set of restore discs with them complete with all of the drivers for the pre-installed hardware.
Gateway is no better but they are pretty much no longer around.
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|I agree. At some point, early on, Dell made pretty good stuff. However, they got cheaper and more proprietary as they went on. They had computers with power supplies that couldn't be changed without blowing up the machine, they had USB ports that didn't work with most USB devices, and at one point they sold thousands of laptop power adapters that had square plugs meant to go in round holes. Heck, I have a Dell laptop, that was supposed to be a desktop replacement, that can barely connect to the internet and play music without crashing.
Their machines are garbage and they back them with horrible service. This is going to be a long recovery.
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|and thats why even if i spend the extra money on an apple, its well worth it in the long run.
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|I've known people with similar experiences thats why if I buy a I get a top notch one like HP or Toshiba that has everything I need. I also re-install a pure install of windows on it so I don't have all their crap that slows it down.
Desktops I either build my own or go to PC Club because I can pick out my parts and get the warranty. Thats how I think Dell should do it, but they probably won't.
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