Dell SCM

MBA – UGM Supply Chain Management

CONTENT

Content ……...…………………………………………………………………..… 1

I . History ….............................................................................................................. 2

I.1. Background ............. ......................................................................................... 2

I.2. Dell and AMD .................................................................................................... 5

I.3. Dell and desktop Linux ......................................................................................

5

II. Products ................................................................................................................ 7

II.1. Scope and Brands ............................................................................................. 7

II.2. Manufacturing………………………................................................................ 8

II.3. Facilities ………………………........................................................................ 10

III. Technical Support ............................................................................................... 10

IV. Commercial Aspect .......................................................................................... 11

IV.1. Organization ....................................................................................................11

IV.2. Marketing………………………......................................................................12

IV.3. Competition ………………………..................................................................16

IV.4. Partnership with EMC…...................................................................................16

V. Environmental Record ......................................................................................... 17

VI. Mergers and Acquisition ......................................................................................19

VI. References ........................................................................................................... 21

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I. HISTORY

I.1. Background

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. Operating from Michael Dell's off-

campus dormitory room at Dobie Center, 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",

sold for US$795 — containing 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 of trading.

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 Ireland; 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 June 22 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

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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 2002, Dell attempted to expand by tapping into the multimedia and home-

entertainment markets with the introduction of televisions, Dell Axim handhelds, and

Dell DJ 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. 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.

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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.

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 and the

U.S. Attorney for the Southern District of New York. The company has not formally filed

financial reports for either the third or fourth fiscal quarter of 2006, and several class-

action lawsuits 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, but the exchange has granted Dell a waiver, allowing the stock to trade

normally.

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.

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I.2. 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, 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 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.

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.

I.3. Dell and desktop Linux

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" Possibly coincidentally, Dell started offering Linux notebook systems

that "cost no more than their Windows 98 counterparts" in 2000, and soon expanded,

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with Dell becoming "the first major manufacturer to offer Linux across its full product

line" However, by early 2001 Dell had "disbanded its Linux business unit."

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.

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. 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. On April 18, 2007 a report appeared suggesting that Michael Dell used

Ubuntu on one of his home systems. On May 1, 2007, Dell announced it would ship the

Ubuntu Linux distribution. 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. 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". On

November 30, 2007 Dell reported shipping 40,000 Ubuntu PCs. On January 24, 2008

Dell in Germany, Spain, UK and France launched a second laptop, an XPS M1330 with

Ubuntu 7.10, for 849 euro or GBP 599 upwards. On February 18, 2008, Dell announced

that the Inspiron 1525 would have Ubuntu as an optional operating system. On February

22, 2008 Dell announced plans to sell Ubuntu in Canada and in Latin America From

September 16, 2008, Dell has shipped both Dell Ubuntu Netbook Remix and Windows

XP Home versions of the Inspiron Mini 9 and the Inspiron Mini 12. As of November

2009 Dell ships the Inspiron Mini laptops with Ubuntu version 8.04.

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II. Products

II.1. Scope and brands

The corporation markets specific brand names to different market segments. Its

Business/Corporate class represent brands where the company advertises emphasizes

long life-cycles, reliability, and serviceability. Such brands include OptiPlex (office

desktop computer systems), Vostro (office/small business desktop and notebook

systems), n Series (desktop and notebook computers shipped with Linux or FreeDOS

installed), Latitude (business-focused notebooks), Precision (workstation systems and

high-performance notebooks), PowerEdge (business servers) PowerVault (direct-attach

and network-attached storage), PowerConnect (network switches), Dell/EMC (storage

area networks), and EqualLogic (enterprise class iSCSI SANs).

Dell's Home Office/Consumer class emphasizes value, performance, and expandability.

These brands include Inspiron (budget desktop and notebook computers), Studio

(mainstream desktop and laptop computers), XPS (high-end desktop and notebook

computers), Studio XPS (high-end design-focus of XPS systems and extreme multimedia

capability), Alienware (high-performance gaming systems), and Adamo (high-end luxury

laptop).

Dell's Peripherals class includes USB keydrives, LCD televisions, and printers; Dell

monitors includes LCD TVs, plasma TVs and projectors for HDTV and monitors. Dell

UltraSharp is further a high-end brand of monitors.

Dell service and support brands include Dell On Call (extended domestic support

services), Dell Support Center (extended support services abroad), Dell Business Support

(a commercial service-contract that provides an industry-certified technician with a lower

call-volume than in normal queues), Dell Everdream Desktop Management ("Software as

a Service" remote-desktop management), and Your Tech Team (a support-queue

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available to home users who purchased their systems either through Dell's website or

through Dell phone-centers).

Discontinued products and brands include Axim (PDA; discontinued April 9, 2007),[40]

Dimension (home and small office desktop computers; discontinued July 2007), Dell

Digital Jukebox (MP3 player; discontinued August 2006), Dell PowerApp (application-

based servers), and Dell Omniplex (desktop and tower computers previously supported to

run server and desktop operating systems).

II.2. Manufacturing

In the 1980s Dell became a pioneer in the "configure to order" approach to

manufacturing — delivering individual PCs configured to customer specifications. In

contrast, most PC manufacturers in those times delivered large orders to intermediaries

on a quarterly basis.

To minimize the delay between purchase and delivery, Dell has a general policy of

manufacturing its products close to its customers. This also allows for implementing a

just-in-time (JIT) manufacturing approach, which minimizes inventory costs. Low

inventory is another signature of the Dell business model — a critical consideration in an

industry where components depreciate very rapidly.

Dell's manufacturing process covers assembly, software installation, functional testing

(including "burn-in"), and quality control. Throughout most of the company's history,

Dell manufactured desktop machines in-house and contracted out manufacturing of base

notebooks for configuration in-house. However, the company's approach appears to have

started to change. The 2006 Annual Report states "we are continuing to expand our use of

original design manufacturing partnerships and manufacturing outsourcing relationships."

The Wall Street Journal reported in September, 2008 that "Dell has approached contract

computer manufacturers with offers to sell" their plants.

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Assembly of desktop computers for the North American market takes place at Dell plants

in Austin, Texas (original location), Lebanon, Tennessee (opened in 1999), Winston-

Salem, North Carolina (opened in 2005) and at the Miami, Florida facility of its

Alienware subsidiary. Dell servers come from Austin, Texas.

Dell's desktop plant in Austin was shut down in 2008. It closed its desktop manufacturing

in Lebanon in early 2009. The last major U.S. plant in North Carolina is scheduled to

close in April, 2010. It marks the end for most of Dell's personal computer manufacturing

in the United States. It's expected that most of the work carried out in North Carolina will

be transferred to contract manufacturers in Asia, though Dell said some of the work will

move to its own factories overseas.

Dell assembles computers for the EMEA market at Limerick in the Republic of Ireland,

and employs about 4,500 people in that country. Dell began manufacturing in Limerick in

1991 and went on to become Ireland's largest exporter of goods and its second-largest

company and foreign investor. On January 8, 2009, Dell announced that it would move

all Dell manufacturing in Limerick to Dell's new plant in the Polish city of Łódź by

January 2010. European Union officials said they would investigate a €52.7million aid

package the Polish government used to attract Dell away from Ireland. 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, and Dell Inc. has consolidated

production into EMF3 (EMF1 now contains only offices). Dell's Alienware subsidiary

also manufactures PCs in an Athlone, Ireland plant. Construction of EMF4 in Łódź,

Poland has started: Dell started production there in autumn 2007.

Dell opened plants in Penang, Malaysia in 1995, and in Xiamen, China in 1999. These

facilities serve the Asian market and assemble 95% of Dell notebooks. Dell Inc. has

invested an estimated $60 million 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. In 2007 the Chennai facility had the target of producing

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400,000 desktop PCs, and plans envisaged it starting to produce notebook PCs and other

products in the second half of 2007.

Dell moved desktop and PowerEdge server manufacturing for the South American

market from the Eldorado do Sul plant opened in 1999, to a new plant in Hortolandia,

Brazil in 2007.

II.3. Facilities

Dell facilities in the United States are located in Austin, Texas; Winston-Salem, North

Carolina; and Miami, Florida. Facilities located abroad include Penang, Malaysia;

Xiamen, China; Bangalore, India; Braknel, UK Chennai, India; Hortolandia, Brazil;

Łódź, Poland and Limerick, Ireland.

III. 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: (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; (4) Platinum Plus support provides

additional benefits to Gold Support; and (5) two-hour on-site support, offered in select

cities.

Dell's Consumer division offers 24x7 phone based and online troubleshooting rather than

only during business hours. On February 4, 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

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businesses, large businesses, government, education, and health-care- and life-sciences.

Dell now also 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.

Dell has several unique aspects of its support program. For example, computers use

"Service Tags," unique alpha-numeric identifiers. Agents also utilize DellConnect, a

remote-access tool that gives technicians within Dell Support the ability to access

customer computers from a remote location for troubleshooting purposes.

IV. Commercial aspects

IV.1. Organization

A board of directors of nine people runs the company. Michael Dell, the founder of the

company, serves on the board. Other board members include Don Carty, William Gray,

Judy Lewent, Klaus Luft, Alex Mandl, Michael A. Miles, and Sam Nunn. Shareholders

elect the nine board members at meetings, and those board members who do not get a

majority of votes must submit a resignation to the board, which will subsequently choose

whether or not to accept the resignation. The board of directors usually sets up five

committees having oversight over specific matters. These committees include the Audit

Committee, which handles accounting issues, including auditing and reporting; the

Compensation Committee, which approves compensation for the CEO and other

employees of the company; the Finance Committee, which handles financial matters such

as proposed mergers and acquisitions; the Governance and Nominating Committee,

which handles various corporate matters (including nomination of the board); and the

Antitrust Compliance Committee, which attempts to prevent company practices from

violating antitrust laws.

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The corporate structure and management of Dell extends beyond the board of directors.

The Dell Global Executive Management Committee sets strategic directions. Dell has

regional senior vice-presidents for countries other than the United States, including David

Marmonti for EMEA and Stephen J. Felice for Asia/Japan. As of 2007, other officers

included Martin Garvin (senior vice president for worldwide procurement) and Susan E.

Sheskey (vice president and chief information officer).

IV.2. Marketing

Dell advertisements have appeared in several types of media including television, the

Internet, magazines, catalogs and newspapers. Some of Dell Inc's marketing strategies

include lowering prices at all times of the year, offering free bonus products (such as Dell

printers), and offering free shipping in order to encourage more sales and to stave off

competitors. In 2006, Dell cut its prices in an effort to maintain its 19.2% market share.

However, this also cut profit-margins by more than half, from 8.7 to 4.3 percent. To

maintain its low prices, Dell continues to accept most purchases of its products via the

Internet and through the telephone network, and to move its customer-care division to

India and El Salvador.

A popular United States television and print ad campaign in the early 2000s featured the

actor Ben Curtis playing the part of "Steven", a lightly mischievous blond-haired youth

who came to the assistance of bereft computer purchasers. Each television advertisement

usually ended with Steven's catch-phrase: "Dude, you're gettin' a Dell!"

A subsequent advertising campaign featured interns at Dell headquarters (with Curtis'

character appearing in a small cameo at the end of one of the first commercials in this

particular campaign).

A Dell advertising campaign for the XPS line of gaming computers featured in print in

the September 2006 issue of Wired. It used as a tagline the common term in Internet and

gamer slang: "FTW", meaning "For The Win". However, Dell Inc. Soon dropped the

campaign.

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In the first-person shooter game F.E.A.R. Extraction Point, several computers visible on

desks within the game have recognizable Dell XPS model characteristics, sometimes

even including the Dell logo on the monitors.

In 2007 Dell switched advertising agencies in the US from BBDO to Mother In July

2007, Dell released new advertising created by Mother to support the Inspiron and XPS

lines. The ads featured music from the Flaming Lips and Devo who re-formed especially

to record the song in the ad "Work it Out".

Dell recently began using the slogan "Yours is here" to show that it customizes computers

to fit customers' requirements.

Criticisms of Dell's marketing of laptop security

Recently Dell has received a lot of press coverage over its claim of having the world's

most dangerous, specifically, its Latitude D630 and Latitude D830. However, the (U.S.)

National Advertising Division (NAD) reports that Dell does not have enough evidence to

support this claim.

Dell kiosks

Starting in 2002, Dell opened kiosk locations in shopping malls across the United States

in order to give personal service to customers who preferred this method of shopping to

using the Internet or the telephone-system. Despite the added expense, prices at the

kiosks match or beat prices available through other retail channels. Starting in 2005, Dell

expanded kiosk locations to include shopping malls across Australia, Canada, Singapore

and Hong Kong.

On January 30, 2008 Dell shut down all 140 kiosks in the US due to expansion into retail

stores such as Wal-Mart, Best Buy, and Staples all over the world.

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Dell stores in the United States of America

In 2006 Dell Inc. opened one full store, 3,000-square-foot (280 m2) in area, at NorthPark

Center in Dallas, Texas. It operates the retail outlet seven days a week to display about 36

models, including PCs and televisions. As at the kiosks, customers can only see

demonstration-computers and place orders through agents. Dell then delivers purchased

items just as if the customer had placed the order by phone or over the Internet.

Dell Inc. planned to use the Dallas store to house about three times as many products as it

displayed in more than 160 kiosks in malls and airports. In addition to showcasing

products, the stores also support on-site warranties and non-warranty service ("Dell on

Call"). Services offered include repairing computer video-cards and removing spyware

from hard drives.

On February 14, 2008, Dell closed the Service Center in its Dallas NorthPark store and

laid off all the technical staff there.

Dell Partner Program

In late 2007 Dell Inc. announced that it planned to expand its program to value-added

resellers (VARs), giving it the official name of "Dell Partner Direct" and a new Website

[1]. Dell Inc. Realized that this program, once a small factor in Dell Inc. sales, had

become a growing sector of its business and it desired to leverage this growing outlet for

its products. It promised VARs who joined this program increased discounts on product

and the ability to use the Dell name and logo in their marketing efforts. ConnectU

became an early member of the program.

The overall success of this program — as a new development for Dell Inc. — remains

unclear.

Retail in the United States

In the early 1990s Dell also sold its products through Best Buy, Costco and Sam's Club

stores in the United States. Dell stopped this practice in 1994, citing low profit-margins

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on the business. In 2003, Dell briefly sold products in Sears stores in the U.S. In 2007,

Dell started shipping its products to major retailers in the U.S. once again, starting with

Sam's Club and Wal-Mart. Staples, the largest office-supply retailer in the U.S., and Best

Buy, the largest electronics retailer in the U.S., became Dell retail partners later that same

year.

Retail around the World

As of the end of February 2008, Dell products shipped to one of the largest office-supply

retailers in Canada, Staples Business Depot. In April 2008, Future Shop and Best Buy

began carrying a subset of Dell products, such as certain desktops, laptops, printers, and

monitors.

Since some shoppers in certain markets show reluctance to purchase technological

products through the phone or the Internet, Dell has looked into opening retail operations

in some countries in Central Europe and Russia. In April 2007, Dell opened a retail store

in Budapest. In October of the same year, Dell opened a retail store in Moscow.

In the UK, HMV's flagship Trocadero store has sold Dell XPS PCs since December

2007. From January 2008 the UK stores of DSGi have sold Dell products (in particular,

through Currys and PC World stores). As of 2008, the large supermarket-chain Tesco has

sold Dell laptops and desktops in outlets throughout the UK.

In May 2008, Dell reached an agreement with office supply chain, Officeworks (part of

Coles Group), to stock a few modified models in the Inspiron desktop and notebook

range. These models have slightly different model numbers, but almost replicate the ones

available from the Dell Store. Dell continued its retail push in the Australian market with

its partnership with Harris Technology (another part of Coles Group) in November of the

same year. In addition, Dell expanded its retail distributions in Australia through an

agreement with discount electrical retailer, The Good Guys, known for "Slashing Prices".

Dell agreed to distribute a variety of makes of both desktops and notebooks, including

Studio and XPS systems in late 2008. Dell and Dick Smith Electronics (owned by

Woolworths Limited) reached an agreement to expand within Dick Smith's 400 stores

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throughout Australia and New Zealand in May 2009 (1 year since Officeworks — owned

by Coles Group — reached a deal). The retailer has agreed to distribute a variety of

Inspiron and Studio notebooks, with minimal Studio desktops from the Dell range. As of

2009, Dell continues to run and operate its various kiosks in 18 shopping centres

throughout Australia.

IV.3. Competition

Dell's major competitors include Apple, Hewlett-Packard (HP), IBM, Samsung, Sun

Microsystems, Gateway, Lenovo, Sony, Acer, Toshiba and Asus. Dell and its subsidiary,

Alienware, compete in the enthusiast market against AVADirect, Falcon Northwest,

VoodooPC (a subsidiary of HP), and other manufacturers. In the second quarter of 2006

Dell had between 18% and 19% share of the worldwide personal computer market,

compared to HP with roughly 15%.

In late 2006, Dell lost its lead in the PC-business to Hewlett-Packard. Both Gartner and

IDC estimated that in the third quarter of 2006, HP shipped more units worldwide than

did Dell. Dell's 3.6% growth paled in comparison to HP's 15% growth during the same

period. The problem got worse in the fourth quarter, when Gartner estimated that Dell PC

shipments declined 8.9% (versus HP's 23.9% growth). As a result, at the end of 2006

Dell's overall PC market-share stood at 13.9% (versus HP's 17.4%).

IDC reported that Dell lost more server market share than any of the top four competitors

in that arena. IDC's Q4 2006 estimates show Dell's share of the server market at 8.1%,

down from 9.5% in the previous year. This represents a 8.8% loss year-over-year,

primarily to competitors EMC and IBM.

IV.4. Partnership with EMC

The Dell/EMC brand applies solely to products that result from Dell's partnership with

EMC Corporation. In some cases Dell and EMC jointly design such products; other cases

involve EMC products for which Dell will provide support — generally midrange storage

systems, such as fibre channel and iSCSI storage area networks. The relationship also

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promotes and sells OEM versions of backup, recovery, replication and archiving

software.

Dell and EMC have announcedthe multi-year extension, through 2013, of their strategic

partnership that began in 2001. In addition, Dell plans to expand its product line-up by

adding the EMC Celerra NX4 storage system to the portfolio of Dell/EMC family of

networked storage systems, as well as partnering on a new line of de-duplication products

as part of its TierDisk family of data-storage devices.

V. Environmental record

Dell became the first company in the information technology industry to establish a

product-recycling goal (in 2004) and completed the implementation of its global

consumer recycling-program in 2006. On February 6, 2007, the National Recycling

Coalition awarded Dell its "Recycling Works" award for efforts to promote producer

responsibility. On July 19, 2007, Dell announced that it had exceeded targets in working

to achieve a multi-year goal of recovering 275 million pounds of computer equipment by

2009.[66] The company reported the recovery of 78 million pounds (nearly 40,000 tons) of

IT equipment from customers in 2006, a 93-percent increase over 2005; and 12.4% of the

equipment Dell sold seven years earlier.

On June 5, 2007 Dell set a goal of becoming the greenest technology company on Earth

for the long term. The company launched a zero-carbon initiative that includes:

1. reducing Dell's carbon intensity by 15 percent by 2012

2. requiring primary suppliers to report carbon emissions data during quarterly

business reviews

3. partnering with customers to build the "greenest PC on the planet"

4. expanding the company's carbon-offsetting program, "Plant a Tree for Me".

The company introduced the term "The Re-Generation" during a round table in London

commemorating 2007 World Environment Day. "The Re-Generation" refers to people of

all ages throughout the world who want to "make a difference" in improving the world's

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environment. Dell also talked about plans to take the lead in setting an environmental

standard for the "technology industry" and maintaining that leadership in the future.

Environmental Performance Reporting

Dell reports its environmental performance in an annual Corporate Social Responsibility

(CSR) Report that follows the Global Reporting Initiative (GRI) protocol. Dell's 2008

CSR report ranked as "Application Level B" as "checked by GRI".

Energy Efficiency

The company aims to reduce its external environmental impact through energy-efficient

design of products, and also reduce its direct operational impact through energy-

efficiency programmes. Internal energy-efficiency programmes reportedly save the

company more than $3 million annually in energy-cost savings. The largest component of

the company's internal energy-efficiency savings comes through PC power management:

the company expects to save $1.8 million in energy costs through using specialised

energy-management software on a network of 50,000 PCs

Criticism

See also: Lawsuits involving Dell Inc.

In the 1990s Dell switched from using primarily ATX motherboards and PSU to using

boards and power-supplies with mechanically identical but differently wired connectors.

This meant customers wishing to upgrade their hardware would have to replace parts

with scarce Dell-compatible parts instead of commonly available parts. However,

company practice in this respect changed in 2003.

In 2005, complaints about Dell more than doubled to 1,533, after earnings grew 52% that

year.

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In 2006, Dell acknowledged that it had problems with customer service. Issues included

call-transfers of more than 45% of calls and long wait-times. Dell's blog detailed the

response: "We're spending more than a $100 million — and a lot of blood, sweat and

tears of talented people — to fix this." Later in the year, the company increased its

spending on customer service to $150 million.

On August 17, 2007, Dell Inc. announced that after an internal investigation into its

accounting practices it would restate and reduce earnings from 2003 through to the first

quarter of 2007 by a total amount of between $50 million and $150 million, or 2 cents to

7 cents per share. The investigation, begun in November 2006, resulted from concerns

raised by the U.S. Securities and Exchange Commission over some documents and

information that Dell Inc. had submitted.

In May, 2008 the New York Supreme Court ruled that Dell and Dell Financial Services

"engaged in fraud, false advertising, deceptive business practices, and abusive debt

collection practices". The relevant lawsuit aimed primarily to highlight and seek

restitution for a lack of technical support given to customers by Dell. The court plans to

hold further proceedings to determine how much money Dell has to pay out to customers

and how much profit Dell made unlawfully, in New York.

VI. Mergers and acquisitions

As of 2009 Dell Inc. has acquired ten companies (eight of them based in the United

States), purchased stakes in four companies, and divested two companies. Dell has not

released the financial details for most of these mergers and acquisitions.

Dell's first acquisition involved ConvergeNet Technologies: on September 8, 1999. The

company acquired Alienware, a specialty computer-desktop manufacturer, on May 8,

2006 for an undisclosed sum and integrated its technology into the company's high-end

product lines. The acquisition of Alienware introduced several new items to Dell

products, including Advanced Micro Devices (AMD) microprocessors; all of Dell's

previous CPUs had come from Intel. To prevent cross-market products, Dell continues to

run Alienware as a separate entity but still a wholly-owned subsidiary. The company

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acquired EqualLogic on January 28, 2008 to gain a foothold in the iSCSI storage market.

Because Dell already had an efficient manufacturing process, integrating EqualLogic's

products into the company drove manufacturing prices down.

From 1999 to 2000, Dell purchased stakes in four companies. It also divested two

companies, in 2000 and 2008, selling parts of the company to other companies. Dell's

largest acquisition was New Hampshire-based EqualLogic in January 2008 for

$1.4 billion. The company made the most acquisitions in any one year in 2008 with three:

EqualLogic, The Networked Storage Company, and MessageOne. On September 21,

2009 Dell announced its intent to acquire Perot Systems (based in Plano, Texas) in a

reported $3.9 billion deal. Perot Systems offers applications development, systems

integration, and strategic consulting services through its operations in the U.S. and 10

other countries. In addition, it provides a variety of business process outsourcing services,

including claims processing and call center operations.

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References

^ a b c d e f "Form 10-K". Dell Inc., United States Securities and Exchange

Commission. 2008-03-31. http://finance.yahoo.com/q/is?s=Dell&annual.

Retrieved 2008-07-01. "For the fiscal year ended: Jan 1, 2009"

"Worldwide PC shipments jump 15.8% in Q4: IDC" (cmd). Economic Times.

http://economictimes.indiatimes.com/infotech/hardware/Worldwide-PC-

shipments-jump-158-in-Q4-IDC/articleshow/5442476.cms. Retrieved 14 Jan

2010.

Mark L. Frigo, Belvard E. Needles and Marian Powers: "Strategy and Integrated

Financial Ratio Performance Measures: Further Evidence of the Financial

Performance Scorecard and High Performance Companies". Studies in

Managerial and Financial Accounting Volume 16, (2006).

Dell, Michael; Catherine Fredman (1999). Direct from Dell. HarperCollins.

pp. 13. ISBN 0-88730-914-3.

Dell.com

Michael Dell". The World's Billionaires 2009. Forbes.com.

http://www.forbes.com/lists/2009/10/billionaires-2009-richest-people_Michael-

Dell_WJOB.html. Retrieved 2009-10-21. "[Michael Dell] caused ire in Ireland

after relocating factory to cheaper Poland."

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