Michael Dell Returns to CEO Role at Dell 165
head_dunce writes "It looks like Michael Dell is jumping back into the big chair at Dell because his company is slipping under the direction of Kevin Rollins. I wonder if they should be looking outside the company for new ideas, or if going back to basics is what needs to be done?"
Re:Quid Pro Quo? (Score:5, Insightful)
Want to be fair? Let's take another look at the Dell business model, shall we?
The industry works according to many 'rules', one of which is the 80/20 citation, saying between two parties, for every dollar transacted at the end, one party will get 80% and the other 20%.
As an example, let's say HP sells a monitor, that is actually manufactured by Samsung. HP knows it will garner approx. 80% of every dollar transacted on the final sale. One monitor sold, at a retail price of USD100.00, which Samsung charged HP $50 for, means a profit of USD$50.00. HP knows that after all expenses are paid, they will net 80%, or USD $40.00 out of that USD$50.00. Samsung knows that after all expenses are paid on their end, they will net USD$10.00 (20% out of that USD$50.00 profit on the back).
As an investor, you typically assume that if you buy HP stock, they will work to maintain that 80% - same with Samsung being expected to negotiate their 20%.
If you learned that HP was settling for 70% and letting Samsung get away with 30%, you might be less inclined to invest in HP and start throwing money into Samsung instead, right? And if that kept up, it would just be a matter of time before HP went out of business, as it rightly should, under such circumstances.
Dell, on the other hand, ignores the gentleman's agreed 80/20 and pushes for as much more as they can get...90/10, anyone? 95/5? 100/0...? Been there, seen that.
Substitute Dell for HP in the above, and then consider...what happens? Dell is a GREAT company and investors love the ROI. Samsung, on the other hand, needs to tread lightly - perhaps it can afford to participate at 90/10 for a short time, hoping that Dell will eventually back off and both sides can move towards a profit balance, but if Samsung continues and doesn't pay attention, it soon starts to collapse. Can't pay bills or negotiate decent contracts with suppliers...investors start walking away. Samsung dies because Dell hollowed them out.
This is the Dell model. Hollow out your suppliers and when one dies, move to another. Scorched earth 21st century style. Nice for Dell, right? Not in the long run, because the day will come when there are either no more suppliers to kill, or no supplier will do business with them. Both of those have happened, and that is where we are today.
Dell is dead, period, as we know it. Maybe Micheal should consider selling sugared water
Improve Customer Support (Score:5, Insightful)
If you are selling PC's by mail-orders (sort of), you better have more than good customer service that customers can depend on.
Even a premium corporate customer care at Dell su8ks big time.
Apple's phenomenal customer support is the main reason iPod and iMac's still rock.
If i call Apple and am under warranty, the dude am talking to knows the business and take me step-by-step to solve the problem. (am not even comparing store-based support, since Dell doesn't have many stores to sell from).
If Michael Dell can bring customer support back to what it was long back, then am sure Dell will rock.
Corporates love Dell because of its uniform ugly black boxen.
My bank switched to HP after Dell's customer support was unresponsive for the last time....
And also ditch the Dell DJ Music Player. Seriously.
To plagarise Jobs: "Move on from MP3 players. The battle was won long back by Apple.".
Get back to core business of assembling high-quality PCs and phenomenal customer service.
Is that difficult Mr.Dell?
less proprietization, please... (Score:4, Insightful)
While yes, proprietary hardware is a shrewd business tactic, and it brings in more revenue stream, it is quite contrary to the hardware industry standard. It is one of the sole reasons I stay clear from dell hardware, and I am probably not the only techie to do so because of proprietization of the hardware.
One change in direction that wouldn't go amiss (Score:3, Insightful)
For the love of god, stop loading up PCs with useless bloatware.
I've actually been buying Dells for a couple of yeaes now. My laptop and my last two desktops have both come from them. Since my student days ended and I got a job, I've found myself relatively cash rich but time poor. As a result of this, I've lost the patience I used to have for building my own PCs and ironing out the kinks and have come to appreciate the option of paying a little more to have somebody do it for me, while still being able to pick which components I want. I take it for granted that when I buy a new PC from Dell, it will, out of box, be slow, unstable and full of 30 day trials for software that only a gibbering moron could ever want to use. I therefore backup the drivers folder, format the hard disk and reinstall XP (I find that the amount of crap Dell are bundling is growing so fast that even the decrappifier doesn't cut it any more).
However, this is not the experience that a lot of people are looking for when they buy a new PC and many people don't have a clue how to go about reinstalling an operating system. All they know is that their new Dell PC, which they've probably paid slightly over the going rate for, is slow as hell, to the point of being painful to use. The further from the cutting edge the system you buy, the worse the problem seems to be, as Dell give no thought to performance in deciding which particular crap to inflict - they just pile it all on.
Case in point - my parents bought a new laptop last year, to keep in a villa they own. It's only going to be used for 6-10 weeks each year, for web-browsing and a few basic office-type apps. Therefore, they picked up one of the bargain-basement Inspirons. A few days later, I get a call asking for help with it. This laptop (a Centrino 1.4, if I remember, with 512 RAM) was taking *6 minutes* to start up completely from the moment you hit the power switch. Fortunately, I was able to talk them through reinstalling XP over the phone, at which point the startup time came down to about 90 seconds.
Not everybody is going to have access to somebody who can talk them through this. In most cases, people are just going to make a note never to buy another Dell again. I fail to see how the small premium that Dell gets paid for crippling its systems like this can even vaguely resemble a valid long-term strategy.
Re:Quid Pro Quo? (Score:1, Insightful)
Re:Quid Pro Quo? (Score:3, Insightful)
You can buy a Dell for $359. $52.50 for Windows and $200 for parts leaves around $100 a computer for warranty work and employees. Compare this to ten years ago, where you'd have a lot more money after Windows and parts.
Wish Dell or someone would go where HP used to be (Score:5, Insightful)
Just once I wish some large manufacturer somewhere would adopt the stance that HP used to have, back when Hewlett and Packard were running the show. Back before Queen Bitch of the Universe took over:
Uncompromising quality.
Damn near everything they did was done right, and when it wasn't, they went to great lengths to fix it.
Quality costs money, but you know what? I buy for the long term. I'd rather pay 2-3x up front for something that'll last a lifetime. I'll do that even for equipment that might be obsolete in 5 years because at least I'll know that it simply won't fail in those 5 years because it's built right.
Computers are harder to do that way, of course, because of the rapid pace of technological advancement, but a good design could make replacement of those bits easy while allowing you to retain the rest. Things like keyboards, mice, cases, power supplies, etc. can be built solid and built to last a very long time because the technology behind them doesn't really change much. As an example, I'm sure many of us here still make use of old IBM buckling-spring keyboards, the kind that are 15+ years old and work as well now as they did when they were new. That's the kind of quality I'm talking about.
And yet, you basically can't find anyone who builds things that well anymore. It's not "profitable" or some such crap. But I say that's bullshit. HP managed to get away with it until its founders let go of the reins. They had their up times and down times during the reign of their founders, but their customers were loyal because HP could be relied upon to do it right.
Maybe I'm just looking at things through rose colored glasses, but I still have my HP 41CX and 11C calculators as proof that the equipment they built really was built to last. But who builds things that way these days? Nobody I know of. Not even HP.
That's something that I think needs to change. I just wish someone would step up to the plate...
Re:Quid Pro Quo? (Score:4, Insightful)
Oh if it were only that simple of a game
Here is how it actually goes... The supplier's people start yammering to themselves about cutting bad customers loose, and it's up to the sales guys to run point and try to force the buyer to put up or walk. The buyer, however, eats sales staff for snack - a quick smile and "Look, do it our way all this year, and next year, if you pull all tens on the appraisals, you can name your price for a change. We will even put it in writing." So, the sales guys cave and spend the next year biting their nails and drinking themselves into a pain-free state. They move on...time moves on. New sales guys come into the fray and when supplier appraisals come out, just prior to refreshing contracts, the numbers don't quite make it & the process repeats and so does the gutting by Dell. Note that this does not go unnoticed by the higher-ups on the supplier side, however. Someone mentions they should cut Dell loose and let them cut down a competitor for a while, but...an SVP comments "...there is perhaps some value in sales being chewed on as long as the competition can't claim Dell as a customer - try your best to keep the blood-letting to a minimum and do what needs to be done to secure a contract renewal". The sales devision takes another beating while R & D gets to enjoy...oh look! Money! Dell investment on the side!
Point is, business does not have to be so brutal. Both sides can come out ahead on all counts without cocking the pistols and clubbing each other as a routine.
"By the way, Samsung is doing great."
Duh - what I gave was a simple enough scenario to serve point-making...hardly detailed reality. Anyone dumb enough to not see that _should_ be anonymous
And again, it's not that simple. Samsung has many divisions, from Finance to SDI, etc. Samsung Electronics covers monitors and TVs, while the memory guys get all the attention. Samsung as a whole IS doing great and will continue for years, but there will always be one division trailing another. That's why the TV division, after being on it's own for 15 years and stagnant, was folded into Monitors a few years back. Funny thing that, since Monitors were split off from the TV division back in the '80s, when Samsung first made those little monochrome displays for something called a Macintosh, that wasn't a TV at all, and no one was sure it was even worth a look
Things DELL should change (Score:5, Insightful)
2.Hire technical support people that know something about computers. And let them have the power to do real technical support instead of insisting that they follow the checklists.
3.Don't use proprietary hardware. More specifically, all components inside the machines should be standard as much as possible (for example, use standard PSUs with standard pinouts and not proprietary ones with custom DELL pinouts). Would make it easier for DELL to just switch suppliers if they e.g. decided that brand x power supplies sucked and brand y were better. This gives DELL negotiation power over suppliers (whereas if they had a custom PSU, the company that makes them has more leverage since the costs to have another company continue to make the custom PSU are expensive relatively speaking)
4.This also extends to software. Do not use any proprietary drivers. All hardware should use the same drivers as you would use if you bought the hardware in a box from a retail store. All drivers should have separate installers included directly with the machine and/or be available to download from the web site such that it is possible to install a normal non DELL non OEM copy of Windows on the DELL machine and not have hardware that wont work right because the only way to get the drivers is to install the special DELL version of windows.
5.Tone down the crap that is pre-installed. All spyware should be removed completely. All demos and time limited software should have uninstall options and also any limitations in the software (such as anti-virus programs with shorter subscription lengths than retail boxed copies have) should be clearly documented.
Re:Quid Pro Quo? (Score:3, Insightful)
Running each supplier down to the lowest cost they will sell at is business. If you're not doing it, you're hurting yourself. If a supplier can't beat costs, either he is inefficient compared to his competitor, or his competitor is taking a loss. Either way, what would I care, as a purchaser, what the story is? How do I even know?
Re:It's replaceability (Score:3, Insightful)
Without the volume, you have zero leverage on your supplier. Think about it. If Supplier A sells 70% of their product to Dell, Dell will have 100% of the leverage and the others will have nothing. No company would ever say no to a customer responsible for 70% of their income. Dell can basically dictate prices and schedules. The same model is used by Wal-mart. Focusing on supply chain issues is myopic at best.