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Dell Inc
November 16, 2009
Goldman analyst rates Dell shares a buy
Shares of Dell Inc. were up 3.5 percent midday after Goldman Sachs raised its rating on the company’s shares to “buy.”
Dave Bailey, a Goldman analyst, said the company is likely to report higher quarterly revenue Thursday than Wall Street analysts expected. Bailey said he’s looking for fiscal third-quarter revenue of $13.3 billion, about $250 million higher than street forecasts.
And Bailey expects Dell’s shipments next year will rise 12 percent, driven by customers who are replacing older computers, he said in a research note to clients.
Dell shares were trading at about $15.94 in midday.
The company reports its quarterly financial results on Thursday.
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November 13, 2009
Dell confirms smartphone for China, Brazil
Dell Inc. confirmed this morning that it will sell a smartphone in China and Brazil, its first entry into the smartphone market.
The Mini 3 will be powered by Google’s Android operating system.
Dell has signed distribution deals with China Mobile, the biggest telecom company in China, and Claro, which is part of the America Movil network in Brazil.
“Our entry into the smartphone category is a logical extension opf Dell’s consumer product evolution over the past two years,” said Ron Garriques, president of Dell’s consumer division.
Dell is widely expected to introduce a smartphone for the U.S. market soon.
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November 3, 2009
Dell completes Perot share purchase
Dell Inc. said this morning it had completed its tender offer for shares of Perot Systems Inc. and would quickly move to close its biggest acquisition ever.
Dell’s offer to pay $30 a share for Perot, or about $3.9 billion, expired at midnight Monday. Based on the shares offered by the deadline, Dell said it would own more than 90 percent of Perot’s shares.
The new Dell Services unit will be based in Plano and headed by Peter Altabef, a Perot executive. Perot Systems strengthens Dell’s offering in tech services, helping customers with complex technology integration and other problems.
That is a higher profit area than computer hardware, which now provides more than 70 percent of Dell’s annual revenue.
Dell said the new unit would have 41,000 employees and annual revenue of about $8 billion.
Perot Systems gets a quarter of its revenue from health care, a growth area, and also has a strong government practice.
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October 26, 2009
IBM loses another round in suit against exec who jumped to Dell
IBM Corp. lost another round in its effort to stop a former top executive from jumping to Dell Inc.
Last week, a federal appeals court in New York rejected IBM’s request to block David Johnson from working for Dell. IBM sued Johnson earlier this year over the move, saying it violated a non-compete agreement. Johnson has been working for Dell since May.
Johnson has said he deliberately signed the agreement on the wrong line, making it invalid.
He was IBM’s top mergers and acquisitions executive, and Dell has said it is building a team to pursue more acquisitions to grow its business.
However, Dell has said Johnson was not involved in its pending $3.9 billion acquisition of Perot Systems Inc.
In June, a federal district court rejected IBM’s arguments and its request for an injunction against Johnson, which precipitated the appeal.
IBM said it will continue to pursue its lawsuit.
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October 14, 2009
Dell slides to third in global PC shipments
Dell Inc. slid to third place in worldwide PC shipments in the third quarter as Taiwan’s Acer Inc. captured second place, according to the IDC market research firm.
IDC’s Tracker Program showed that global PC sales totaled 78.1 million units in the quarter an increase of 2.3 percent from the same quarter a year ago. The increase followed year-to-year declines of 6.8 percent in the first quarter and 2.4 percent in the second quarter.
Hewlett-Packard ranked first among PC vendors in the quarter, with 15.8 million units shipped, up 9.3 percent from a year ago. Acer had nearly 11 million units shipped, up 25.6 percent.
Dell had just under 10 million units shipped, a drop of 8.4 percent.
Acer was bolstered by its strong sales of low-cost netbook computers.
Dell ranked second in U.S. shipments behind HP.
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Michael Dell expects PC sales rebound
Michael Dell said he expects a “powerful” refresh of hardware sales to business customers starting in 2010, according to a report from Reuters.
Dell, speaking at a business forum in California’s Silicon Valley, said a strengthening world economy and an aging population of business computers, augers well for a rebound in sales to business customers starting next year.
“It’s getting a bit getter incrementally …., but I think there are still challenges out there,” Dell said, according to a report from Reuters. “The U.S. is doing better than Europe. Europe’s probably six to nine months behind the U.S.”
The founder and CEO of Dell Inc. also revealed some of his thinking on his company’s pending acquisition of Plano’s Perot Systems Corp. for $3.9 billion.
“Perot Systems is of a sufficient size that gives us a certain scale, but it’s also not too big,” Dell said.
Dell also acknowledged that is company is looking carefully at the smart phone market, where some industry insiders say it will introduce new phones early next year.
“There is definitely a phenomenon going on with the Internet in your pocket and there are new platforms that are emerging,” he said. “I think you’ll see us begin to show up gradually.”
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October 13, 2009
Dell builds its merger team
In the wake of its announced purchase of Perot Systems Corp., Dell Inc. will pursue more business acquisitions as the company moves to diversify away from its heavy concentration on selling computer hardware, CEO Michael Dell told Bloomberg News.
Dell said his company is “rapidly developing” the know-how to do multiple acquisitions and building a team to identify and execute those deals.
“You will see us be reasonably active,” Dell said, adding that the company will look at acquisitions that add to its business ties to major corporations. It also will look at deals tied to the health care industry.
“We have a talented team of people that includes people who have been at Dell a long time and understand the Dell culture in the transactions that we’ve done and know why those have succeeded or not,” Dell told Bloomberg.
Dell hired former IBM Corp. acquisitions executive David Johnson in May and Johnson heads a team working on “plenty of other things” beyond the Perot deal, Dell said. Johnson was not involved in the $3.9 billion Perot acquisition, which is expected to be completed before the end of the year.
Dell also said his company is pushing into the smart phone business. Earlier this year, China Mobile Ltd., showed off a Dell smart phone at a trade event in China. Industry sources have told the Wall Street Journal that Dell has struck a deal with wireless carrier AT&T Inc. to introduce a Dell smart phone based on Google Inc.’s Android software for mobile devices.
“You could see us in the next year in the U.S. with some of the major carriers,” Dell said.
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October 7, 2009
Journal: Dell to launch smart phone in U.S.
Dell Inc. intends to launch a smart phone in the United States next year that will be offered to customers of AT&T’s cell phone network, according to a story in the Wall Street Journal’s online edition. The Journal cited anonymous sources who had been briefed on the project.
The phone, which would be Dell’s first in the U.S., would be based on Google Inc.’s Android software developed for mobile devices.
Dell has said it intended to develop smart phones, but hadn’t offered specifics. One cell phone company in China displayed a Dell phone in August, but the company said the phone was merely a demonstration, not necessarily a version headed for the market.
AT&T had no comment on the report.
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Dell announces closing of N.C. factory
Dell Inc. said today it will close its four-year-old computer manufacturing plant in Winston-Salem, N.C., by January as part of its continuing effort to cut $4 billion from its annual operating costs.
The closing will eliminate 905 jobs in what had been Dell’s largest remaining manufacturing operation in North America.
Dell, the world’s second-largest personal computer maker, began making desktop computers in the North Carolina plant just four years ago after negotiating a $240 million incentives agreement with state and local governments.
Company spokesman David Frink said the computer maker will meet with government officials in North Carolina to comply with the terms of those agreements. That could include giving back some money already received or forgoing future payments.
“This was a difficult, but necessary decision to improve the company’s competitive position,” Frink said. “It is not a commentary on workers in North Carolina or workers in the United States.”
The company is expected to shift some of the work done in the North Carolina plant to other Dell factories elsewhere in the world and to contract manufacturers.
Dell continues to make computers in Poland, Malaysia, India, China and Brazil. The company continues to make its server computers in a North Austin factory that is believed to employ a few hundred people. It also makes gaming-oriented computers that are a part of its Alienware subsidiary in Miami, Fla.
Since the start of 2008, Dell has announced the closings of factories in North Austin and Limerick, Ireland. It also announced the sale of a plant in Lebanon, Tenn., to a contract manufacturer.
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September 29, 2009
Adobe CEO joins Dell's board
Sallie Krawcheck, a top executive at Bank of America, is resigning from Dell Inc.’s board, effective Wednesday.
Krawcheck wants to focus on her job as president of the bank’s global wealth and investment management operations, Dell said today. She has been on the board since 2006.
The company said that Shantanu Narayen, president and chief executive officer of software maker Adobe Systems Inc., will become a board member immediately.
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Dell introduces skinny laptop with wireless docking
Dell Inc. introduced a new Latitude laptop this morning that’s less than an inch thick and has wireless docking and inductive battery charging.
The Latitude Z goes on sale in the United States and other countries starting at $1,999.
The 16-inch laptop is designed for workers on the go, such as salespeople.
The laptop weighs 4.5 pounds, has a touch screen, camera, and a security feature that locks out other users when the owner steps away from the PC.
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September 21, 2009
Dell buying Perot Systems for $3.9 billon
UPDATE: I just got off the phone with Michael Dell, and here is what he said about the Perot Systems deal.
The combination of the companies “creates a much stronger foundation to grow in services,” Michael Dell said. “We felt it was important to make a foundational addition to the services capability at Dell and we believe this is the best asset out there. We are thrilled to be at this stage.”
Dell said the fact that both companies are based in Texas and that top executives know each other well on a personal level played a role in the deal.
“The families have known each other for quite some time and the companies have worked together fairly closely the last few years,” he said. ”That lowers the risk in the transition. If the principals know each other and have close working relationships it makes it easier. And (Perot Systems chairman) Ross Perot Jr. will be joining the board [of Dell] once it is completed.”
Dell Inc. made its biggest acquisition deal ever Monday, agreeing to buy computer services provider Perot Systems Corp. for $3.9 billion.
The acquisition gives Dell a way to expand its tech services revenue, something analysts say the company needed to do to buffer it against downturns in hardware sales. During the current recession, Dell has been hit hard by the slowdown on corporate technology spending, as companies have held off on buying new equipment.
Dell has its own services operation, but analysts say the company offers primarily basic services tied to configuring, installing and fixing computer hardware.
Perot Systems is involved with high-end services, which can involve the planning, integration and development of new computer-based operations for corporate and government clients.
“This is really about growth,” Dell CEO Michael Dell said in a conference call with analysts Monday. “We think there are great opportunities here. Our challenge is to focus on the best opportunities first.”
While Dell said there are cost efficiencies to be gained by joining the two companies, he expects most of the savings will be plowed back into growing services further in such areas as health care, government and corporate management.
Dell said he and Ross Perot Jr., Perot’s chairman, have been talking about a merger for the past two years, but negotiations heated up this summer.
The companies have worked together extensively, are familiar with each other and have similar business customers, Dell said.
The deal is expected to be completed before the end of 2009. When that happens, Perot Systems CEO Peter Altabef will head the companies’ combined services operations, which will be based in Plano.
The deal bolsters Dell’s ability to compete on services against IBM Corp. and Hewlett-Packard Co., which last year bought EDS Corp., another Texas-based tech services company, for $13.9 billion.
Together, Dell and Perot Systems have $8 billion in annual services revenue.
“This is the hole in Dell’s portfolio that they are now attempting to fill,” said analyst Roger Kay with Endpoint Technologies Associates. “It is a very big bet, but I would say a necessary bet. Perot Systems is one of the few viable freestanding services companies that has a reasonable size and girth. This bolsters [Dell’s] their story in the enterprise [corporate sales area] which is the core of their computer business. They have to make good here.”
While Perot Systems is considerably smaller than EDS, analyst Rob Enderle of the Enderle Group, said the Plano company “has adequate scale” to raise Dell’s standing as a serious provider of higher-end services.
“This deal puts Dell back on the table,” competing for major customers, Enderle said. “For much of Dell’s existence, they were the smaller player and made up for it with agility. Dell remains the most agile of the three major companies. IBM and HP have the larger scale in services, but Dell remains the most agile and they may be faster-moving. That is how I think the battle is going to be fought going forward.”
Dell’s offer is to buy Perot’s stock for $30 a share, 68 percent higher than its closing price Friday.
Dell said the transaction is expected to add to Dell’s earnings in fiscal 2012, which starts in early 2011.
Perot’s stock was up almost 66 percent Monday morning. Dell’s stock was trading at $16.04 a share, down 65 cents, or 3.9 percent, in early trading.
Dell, founded in 1984, is Austin’s largest public company and largest employer with more than 16,000 workers in the Austin area.
Perot Systems was founded by billionaire H. Ross Perot in 1988 after he sold EDS Corp. to General Motors.
Dell’s previous biggest acquisition was the $1.4 billion purchase of EqualLogic, storage systems provider, in 2008.
This spring, Dell hired David Johnson, IBM Corp.’s top mergers and acquisition executive, as it laid the groundwork for more purchases. But Johnson’s role has been complicated by an ongoing lawsuit filed against him by IBM. Michael Dell said Johnson was not involved in any part of the Perot deal.
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September 11, 2009
Dell closing Idaho call center
Dell Inc. is closing its customer support call center in Twin Falls, Idaho, by January, eliminating 500 jobs.
According to the Twin Falls Times-News, Dell officials told employees Thursday about the plan.
Dell spokeswoman Harjit Kaur told the newspaper that about 125 employees will be offered jobs at call centers in Texas and Oklahoma or with the company’s work-from-home program.
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September 10, 2009
Dell debuts new electronic medical records program
Dell Inc. unveiled an ambitious plan Thursday to help hospitals and related physician groups work together better with electronic medical records systems.
Dell, the world’s second-largest PC maker, said the plan should help improve medical care while enabling doctors to tap into the $1.2 billion in federal funds recently made available for the adoption and “meaningful use” of such systems by 2011.
Health care is a valuable new target sector for Dell. The company has relied increasingly on sales to government in recent quarters to make up for big drops in computer spending by large corporations.
Dell said its early partners in the electronic records program include Tufts Medical Center in Boston and the Memorial Hermann Healthcare System in Houston.
Tufts, along with the New England Quality Care Alliance industry group, worked with Dell to design the program.
Dr. Jamie Coffin, Dell’s vice president for health care and life sciences, said Dell’s program helps attack the digital divide in the medical system where hospitals and affiliated doctors do a poor job of sharing patient records.
“Patient information that is locked away in paper records, electronic medical records solutions that are beyond the reach of most physician practices,” Coffin said. “Hospitals and physicians share patients, but not patient information. With our hospital partners, we are knocking down (electronic medical records) barriers.”
Analyst Judy Hanover with IDC said Dell has introduced one of the first comprehensive solutions for hospitals and affiliated doctors.
Elecronic medical records technology “has existed for nearly 20 years, but cost, complexity and other barriers have kept it beyond the reach of physician practices and many hospitals, the front line of our health care system,” Hanover said.
Dell spokeswoman Cathie Hargett said her company believes it is important for hospitals to be the lead partner in such systems so that affiliated doctors can invest in compatible records systems.
The computer maker is plans to work with a variety of software vendors including eClinicalWorks to deliver the applications that hospitals and doctors want to use. Dell will provide a variety of services to help hospitals and doctors practices to set up such systems - including financing, needs assessment, work flow consulting, system configuration, software installation, training and support.
Dell officials said its program is designed to reduce upfront expenses, speed the cash flow to physicians, eliminate complexity and connect the health care community.
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August 27, 2009
Dell's quarterly results win analyst praise
Dell won analyst kudos Thursday with a modest 3 percent boost in revenue for the second quarter compared with the first.
The computer maker reported a profit of $472 million, or 24 cents a share, on revenue of $12.7 billion for the quarter ended July.
Revenue was down 22 percent from a year ago, but higher that what analysts were expecting. Adjusted profits per share were 28 cents, 5 cents higher than analysts had forecast.
“You’ve got to have a baby-steps recovery,” said analyst Ashok Kumar with Collins Stewart. “The fundamental recovery is going to be more u-shaped. Wall Street views these results positively, with no qualifications.”
CEO Michael Dell said the company has been “reducing the complexity of our organization and significantly reducing operating costs in anticipation of improvement in the global economy and (information technology) spending. If ;current demand trends continue, we expect revenue for the second half of the year to be stronger than the first half.”
But CFO Brian Gladden cautioned that the real recovery in Dell’s bread-and-butter business — corporate computers, who account for most of its revenue — still isn’t expected until next year.
Dell shares rose almost 7 percent in regular trading, closing at $15.65.
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Analysts expecting few surprises in Dell report this afternoon
Dell Inc. reports its fiscal second-quarter financial performance this afternoon. Analysts said they’ll be looking for any comments from the company on whether corporate technology spending is starting to recover.
Dell is expected to report per-share profits of 22 cents, down from 31 cents in the year-ago quarter, but still in line with what analysts have been expecting.
The company is expected to report revenue of $12.6 billion, down 23 percent from last year but also in line with analyst expectations.
On Monday, Broadpoint AmTech analyst Dinesh Moorjani upgraded his outlook for Dell shares, to buy from neutral. Moorjani said he expects corporate customers, who account for about 85 percent of Dell’s revenue, will start upgrading their systems early next year.
Dell shares were trading at $14.64, up 3 cents, early this afternoon.
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July 23, 2009
Dell pays $9 million to settle discrimination lawsuits
Dell Inc. said it agreed to pay $9.1 million to settle a lawsuit that alleged that the company had discriminated against women in some employment practices.
Last year, two former employees sued Dell in Austin, alleging that the company had engaged in a “practice of gender discrimination with respect to compensating and promoting female employees.”
The lawsuit sought class-action status.
Under the settlement, Dell will provide $5.6 million to pay the members of the class and cover their legal costs, according to a joint statement by the company and the plaintiffs.
The remaining $3.5 million will be used to create a pay-equity fund. The company will conduct a review of pay levels for female employees in certain grade levels.
Dell also has agreed to examine its policies on certain employment practices and to hire outside experts who may make recommendations on how to improve its practices.
In the settlement, Dell did not admit wrongdoing.
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July 17, 2009
Dell shareholders eliminate supermajority votes
Dell Inc. shareholders voted Friday to enable a simple majority of shareholders to decide key issues such as mergers or the sale or disposition of corporate assets, the calling of special shareholder meetings and nomination or removal of directors.
Dell previously required that 67 percent of shareholders approve certain key measures in order for them to pass.
The proposal to eliminate that threshold was made by two shareholders, James McRitchie and Myra Young of Elk Grove, Calif. McRitchie stated that the supermajority requirement could frustrate the will of the majority of shareholders in some cases.
Dell’s board of directors had recommended against the proposal. It said in proxy materials that simple majority votes decide most questions at the company.
Keeping the supermajority, the board had said, would protect the interests of “all shareholders against short-term, self-interested actions by one or a few large stockholders who have no responsibilities to other stockholders.”
The board said that proponents of the proposal suggest that the threshold required to call a special shareholders meetings be reduced to 10 percent of all shareholders. Special shareholder meetings, the board said, would be costly and “require significant time and energy and are disruptive to the management of the business.”
A Dell spokesman had no comment on the significance of the shareholder approval to the company.
Dell shareholders also elected the company’s proposed slate of 10 directors at the annual shareholders meeting at the Austin Convention Center.
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July 14, 2009
Dell sees computer rebound in 2010
Executives from Dell Inc. said today they’re expecting a rebound in corporate PC purchases next year, as companies replace aging systems.
At a meeting with Wall Street analysts in Austin, Chief executive Michael Dell said one driver will be Microsoft’s upcoming Windows 7 operating system, due this fall. Many corporate customers didn’t accept Microsoft’s Vista OS, but Dell said Windows 7 is a “great product” with features that will persuade business customers to upgrade their computers.
“We think a refresh (of hardware sales) is possible in 2010; personal computers will be later than servers and storage,” Michael Dell said. “I think a lot is going to depend on the overall economy and the economic condition for any given company.”
But he added, “We are engaged right now with a lot of companies” that are planning to start replacing their older computers “around the end of the year and going into 2010.”
Ron Garriques, who oversees Dell’s consumer business, indicated that Dell is likely to come out with its own smart phone, but gave no details.
Analysts had a lot of questions about acquisitions as part of Dell’s strategy to feed growth.
Dell has indicated that it’s considering buying other companies in certain areas. But Michael Dell said, “If you’re asking me who the targets are and when we’re going to buy them, no thanks, I’d rather not do that.”
Dell shares were down more than 7 percent in early afternoon trading, to $12.04.
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July 2, 2009
Ex-IBM exec cleared for full work at Dell
A second federal court judge has ruled in favor of former IBM Corp. executive David Johnson in a ruling that his lawyer says will allow him to become “fully engaged” at Dell Inc., which hired him last month.
IBM sued Johnson, a former senior merger and acquisitions executive, when he left to join Dell. IBM claimed that he was violating a non-compete agreement he had signed.
Johnson joined Dell on June 2, but stayed away from acquisitions work, pending the outcome of the lawsuit.
Although the lawsuit between IBM and Johnson goes on, Johnson’s lawyer, Michael Banks, said today thattwo court decisions in the past week means Johnson can now “begin to work fully for Dell.”
A federal district court judge removed an injunction against Johnson last week and a federal appeals court judge removed a temporary ban against him on Wednesday.
Johnson is expected to be a key player in what some analysts expect is a move by Dell to acquire software and computer services companies that can help it expand its business ties with corporate customers.
Dell had no comment on the ruling.
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June 30, 2009
WSJ: Dell may be developing mobile device
Dell Inc. appears to be developing a small Internet-access device that would compete with Apple’s iPod Touch, according to the Wall Street Journal.
The Journal, citing anonymous sources, said early prototypes of the pocket-size computing device look like Apple’s iPod Touch, but are slightly larger. And Dell devices will use Google’s low-cost Android operating system.
The device could go on sale before the end of 2009 and Dell might sell it with the help of major wireless operators, who control most cell phone sales in the U.S., the Journal said.
Such proposed devices are being called MIDs, or mobile Internet devices.
Collins Stewart analyst Ashok Kumar says that Dell may be trying to create a device that combines portable gaming with Internet access. Sony and Apple are believed to be working on similar products, Kumar said.
Android is a much-talked about Google software system that Dell could use as a cheaper alternative to Microsoft.
“If you use Android, you don’t have to pay the baksheesh to Microsoft and you probably save $20 or more per unit,” Kumar said.
Kumar said he believes that Dell made an unsuccessful attempt to introduce its own smart phone. That project stalled, he said, when no major carrier agreed to become a reseller for the device.
The rumored new product “will have to be a pretty compelling device to succeed,” Kumar said. “Given Dell’s track record with smart phones, their changes of success are probably not better than 50-50. But there is no harm in trying. It is fairly low-risk. If it doesn’t succeed, they pull the plug on it and go on. It is not going to move the needle (on revenue) one way or the other.
Dell had no comment on plans for a new mobile device.
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June 10, 2009
Dell to raise $1 billion in note sale
Dell Inc. is preparing to sell $1 billion worth of notes, the second time in two months it has gone to the market to raise a large amount of money.
Dell filed a registration statement Wednesday for the notes, but didn’t give an amount. IFR, a Thomson Reuters service, said the company would sell the bonds in two issues, one for $400 million and one for $600 million.
In April, Dell raised $500 million in another note sale.
Analysts have said Dell might be building a cash pile to use for acquisitions.
The company has $10.3 billion in cash on hand, according to its most recent quarterly report, up from about $9 billion a few months ago.
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May 28, 2009
Dell posts Q1 profit despite sales slump
Dell Inc. reported a modest profit despite a deep plunge in its fiscal first quarter revenue on Thursday.
The computer maker reported net income of $290 million, or 15 cents a share, on revenue of $12.3 billion for the quarter ended May 1.
Dell spent $185 million in the quarter on what it called “organizational effectiveness actions.” The company has cut jobs and taken other steps to bring down costs.
In the year ago quarter, the company had a profit of $784 million, or 38 cents a share, on revenue of $16.1 billion for the same quarter a year ago.
Despite slumping demand, Dell reported positive cash flow of $761 million as it ended the quarter with $10.7 billion in cash and short-term investments.
While the demand picture is mixed, CEO Michael Dell said that the company is “preparing for what we believe will be a powerful replacement cycle” once the economy recovers.
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April 15, 2009
H-P ends Dell's 10-year dominance of the U.S. PC market
Dell’s worldwide personal computer shipments plummeted in the first quarter, cutting into the company’s market share while its top competitors posted moderate growth.
In the U.S., Hewlett-Packard supplanted it as the PC market leader for the first time in 10 years, according to IDC, a technology research firm.
Worldwide, Dell’s PC shipments dropped 16.7 percent, compared with a 7.1 percent drop industry wide, IDC said. At No. 1 H-P, shipments increased 2.9 percent.
Worldwide shipments at third-place Acer increased 6.8 percent. Dell now is ahead of Acer by 2 percentage points, down from 5.1 percentage points at the same time last year.
H-P held 20.5 percent of the worldwide market in the first quarter, IDC said. Dell had 13.6 percent and Acer had 11.6 percent.
In the U.S., H-P and Acer each posted double-digit growth rates, but Dell’s domestic shipments dropped 16.2 percent. Industry-wide, U.S. shipments fell 3.1 percent, a smaller decline than IDC had expected.
H-P finished the quarter with 27.6 percent of the U.S. market, and Dell had 26.3 percent. During the same period last year, Dell held a 6.6 percentage point advantage over H-P.
Amid an ongoing effort to streamline the company and reshape it for the future, CEO Michael Dell has said the company will focus on profitable sales instead of market share. In the past, Dell typically had both higher profits and market share than rivals, but in recent years its competitors took better advantage of the market’s shift to notebook PCs and eliminated most of the cost advantages Dell long enjoyed.
IDC said continued resilience in notebook shipments helped keep the industry’s worldwide declines from falling as far as it expected. The U.S. market was better than expected in the quarter, the firm said.
Virtually everyone expected a tough first quarter, but several technology companies recently have said the worst of the downturn might be in the past. Intel CEO Paul Otellini said Tuesday that the giant chipmaker believed the computer market had bottomed out in the first quarter. Michael Dell recently said his company has seen more stable patterns of demand from its customers.
The bolder claim has come from Acer. According to an online report from Europe Tuesday, CEO Gianfranco Lanci said his company will surpass both Dell and H-P in PC shipments within a year.
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April 14, 2009
Dell takes new small business services nationwide
Dell rolled out a new set of technology services today for small and medium businesses nationwide, expanding a pilot project it had run in Dallas and New York.
The offering allows smaller firms to select from three tiered services packages, then add extra products as needed. The company said the program, called ProManage-Managed Services, starts as low as $9 per month.
Customers who purchase the service can have Dell remotely monitor their technology networks and applications, regardless of brand. At a basic level, Dell will send alerts when a problem arises or might arise.
Other levels of service include resolution of problems through a remote service desk and a higher tier that offers more consultation and dedicates a local, on-the-ground service team.
Customers can add other services, including software support, network assessments and data storage and backup.
In recent years, Dell has pushed further into technology services for commercial customers, many of whom have sought to shop out the management of some or all of their networks.
While the business has grown, Dell’s services offerings lag the scope and size of its rivals’, particularly IBM and Hewlett-Packard, which acquired tech-services giant EDS last year.
Dell has said it aims to automate many of those services to reduce the manpower needed for technology management, and it has developed packages of services that customers can mix and match to fit their needs.
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April 13, 2009
Dell adds board member
Dell said today it has added Jim Breyer, a well-known Silicon Valley venture capitalist and a director at several large companies, to its board.
Breyer’s appointment, which brings the company’s board to 12 members, will help offset the upcoming departure of two directors. He will serve until Dell’s annual stockholders meeting July 17, when he will stand for reelection by shareholders.
Breyer, 47, also serves as a director at Wal-Mart and Facebook. He is a partner at Accel Partners, a large venture capital firm based in Palo Alto, Calif. He previously worked as a management consultant at McKinsey & Co. and at Apple and Hewlett-Packard.
His appointment replaces one of two directors who said they’d leave Dell’s board as of the shareholders meeting. In February, Michael Miles said he planned to retire, and Alan (A.G.) Lafley said he would leave to focus more on his job as CEO of Procter & Gamble.
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April 6, 2009
Dell teams with Perot Systems on health care technology
Dell will partner with Perot Systems on a set of products and services designed to spur broader use of electronic medical records and other technologies among health-care providers.
The computer maker announced the partnership this morning at the annual Healthcare Information and Management Systems Society (HIMMS) conference in Chicago.
Dell and Perot Systems said they will offer packages to help health care providers more easily and efficiently adopt technologies for mobile computing, virtualization and Web-based health records.
Also today, Dell and Sam’s Club said they would roll out a previously announced package of technologies aimed at smaller doctors’ offices. That partnership, which includes Web-based health records and billing systems produced by eClinicalWorks, was announced last month.
High-tech companies throughout the country have targeted health care as a key market for growth, especially as the recession has curbs technology spending. They also hope to take advantage of a range of federal stimulus mones, including billions designated for electronic medical records and other health care technologies.
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March 30, 2009
Dell offers colors for the desktop
It seems all the talk of computer personalization has focused on notebooks. Computer makers now offer laptops with all kinds of sleek designs and funky exteriors.
Unless you wanted a high-end gaming machine, the desktop PC has missed out on most of the style upgrades. There have been new designs — for example Dell’s Studio Hybrid (pictured right) and a rash of all-in-one machines like Apple’s iMac (pictured left) — but for the lower end there’s not much beyond the same dull old box.
Dell will try to spruce that up a little bit. It’s launching a new set of lower-end Inspiron desktops today that give customers eight color options for the front face of the machine.
The new desktops start at $299. They’re available immediately in China and will be available worldwide later this spring, the company said.
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March 24, 2009
Dell signs on with two major distributors
Dell Inc. said today it would begin offering its products through two major technology distributors, taking one of the final steps in its transition away from purely direct-to-customer sales.
The company, long known for its reliance on direct sales, now will distribute its small business line of PCs through Ingram Micro Inc. and Tech Data Corp. The partnership begins immediately in the U.S. and will begin in Canada later this year.
Dell expects to expand the deal globally in the future, said Elizabeth Shine, a company spokeswoman.
The announcement will supplement the company’s PartnerDirect program, introduced in December 2007 as a formal channel through which Dell could reach customers who relied on third parties for advice, service and technology products. PartnerDirect now has more than 35,000 registered re-sellers in 148 countries, Dell said.
Ingram Micro and Tech Data bring a new scope and scale to the program. Both companies provide worldwide distribution networks, as well as logistics, consultation and tech-support services for smaller re-sellers.
As such, the agreement gives Dell’s smaller partners an opportunity to work through an established distributor, which can act like a wholesaler and often deliver products and services more quickly.
“Our partners value Dell’s ability to custom configure (products), but they’re telling us there are times when customers’ needs are more urgent, and this agreement shows our commitment to act on feedback from partners,” said Greg Davis, vice president and general manager of Dell’s global commercial channels group.
Dell initially will offer its Vostro notebooks and desktops through the two distributors. It said it plans to expand the range of products over the coming weeks.
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March 11, 2009
UPDATE: Dell layoffs will be in the hundreds
Dell Inc. is laying off hundreds of workers this week, including cuts in Central Texas, as it continues to reorganize its businesses and adapt to the recession.
David Frink, a Dell spokesman, confirmed the computer maker is eliminating jobs, including layoffs happening today in Central Texas and at its factory in North Carolina.
Frink declined to provide figures for specific locations, but sources within the company said this week’s cuts would number in the hundreds.
“We’ve been streamlining the company where it makes sense for more than a year,” Frink said. “Any actions this week are part of that effort.”
He added: “The layoffs are not about individual performance but about properly sizing Dell’s business for the economy and business environment.”
Dell has been working to streamline its business and make its cost structure more flexible, moves it hopes will help it adapt more quickly to business conditions and become more cost-competitive against its rivals.
On Feb. 26, the company said it plans to eliminate $4 billion from its annual cost base by February 2011, increasing its initial cost-cutting target by $1 billion. Executives said Dell already saved $1.4 billion of that target.
Much of those savings have come from previous layoffs, including the closure last year of the company’s desktop PC factory and related operations in North Austin, where Dell had employed about 900 workers.
Globally, the company eliminated 11 percent of its workforce during its last fiscal year, and late last month executives said they would cut more jobs as they continue to reshape the company and as the global economic slowdown forces customers to curb technology spending.
Dell is in the midst of realigning its businesses, molding units by customer type instead of geographic regions. When completed, the company will have four major business units selling to consumers, large enterprises, public customers and small and medium businesses.
The company has said it expects to complete that effort during the first half of this year.
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March 2, 2009
PC shipments headed for sharp declines this year
Personal computer makers will suffer the sharpest-ever decline in shipments in 2009, according to Gartner Inc.
The research firm today said it expects this year’s PC shipments to drop 11.9 percent compared with last year. Desktop computers will drop 31.9 percent, the firm said, as companies put off purchases and stretch the life of their current PCs.
The previous worst decline came in 2001, when shipments decreased 3.2 percent, Gartner said.
Rising shipments of notebooks and mini-notebooks should keep the fall from getting even worse, Gartner said. It expects notebook shipments to increase 9 percent. And while mini-notebook shipments will nearly double, they remain too few to offset the sharper drop, the firm said.
Strong sales in emerging markets — which helped fuel the industry’s growth in recent years — also will fade this year, Gartner said. It now expects sales in emerging markets to fall off 10.4 percent.
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February 19, 2009
Two board members to leave Dell
(Update: Adds ages, notes Miles is retiring from the board.)
Two of Dell’s board members will not run for reelection when their terms expire later this year, the company said today.
Michael Miles (left) and Alan (A.G) Lafley (right) will continue to serve as directors until the company’s annual shareholders meeting July 17, Dell said. They informed Dell of their decision on Feb. 16, the company said.
Miles, 69, a special limited partner at Forstmann Little & Co., a private investment firm, will retire after 14 years on the board, Dell said. He is chairman of the board’s governance and nominating committee.
Lafley, 61, has served on the board since July 2006. He will leave to “dedicate more time” to his role as chairman and chief executive at The Proctor & Gamble Co. At Dell, he is chairman of the board’s leadership-development and compensation committee.
Dell said it has begun a search for directors to replace Miles and Lafley.
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February 11, 2009
Dell offers gift cards for unwanted electronics
Dell has launched a free, online trade-in system that allows customers to exchange their unwanted electronics for gift cards.
The company had been testing the Dell Exchange program since November, and made it available throughout the U.S. mainland today.
The value of the gift card, valid for Dell catalog purchases or at Dell.com, will vary depending on the quality and state of the equipment. Customers can fill out an online form at www.dell.com/tradein to see how much they can get for their old computer, iPod, camera, GPS device, etc.
The program, run in conjunction with Dealtree Services Inc., accepts a wide range of different consumer electronics and brands.
Dell also said it has expanded its Reconnect recycling partnership with Goodwill Industries to include six new states. The free drop-off program now includes more than 1,000 Goodwill stores nationwide, including locations throughout Central Texas.
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February 9, 2009
Dell makes trims to its Central Texas work force
Dell continues to pare small numbers of jobs at its Central Texas facilities — the latest cuts coming in the past week — as the company adjusts to the recession and works to cut costs.
The company declined to specify how many jobs it eliminated recently, but they appear to be a small fraction of its Central Texas workforce of about 16,000 to 17,000 employees.
Dell has launched several company-wide initiatives to reduce costs, improve efficiency and work itself back into a more competitive cost position. Executives have said they expect to cut $3 billion from the company’s annual cost base by February 2011.
“Those reductions take many forms,” said Jess Blackburn, a company spokesman, “and we’re not going to comment on the specifics of each and every action we take.”
In November, CEO Michael Dell sent employees a memo asking them to consider taking unpaid vacation time and offering voluntary severance packages. At the time, the company said it wanted to provide employees voluntary options to help cut labor costs and reduce the likelihood of significant layoffs later.
Dell already had completed a plan to lay off 10 percent of its work force, about 8,800 jobs. About 900 of those job cuts came from the closing of Dell’s desktop-computer factory and related operations in North Austin.
The company since has said it will shutter its factory in Limerick, Ireland, as well. That closure, scheduled over the next year, will eliminate about 1,900 jobs, the company said.
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January 29, 2009
Dell ends desktop production in Tennessee
Dell Inc. will close a Lebanon, Tenn., computer plant Friday, ending 10 years of manufacturing there, the Nashville Tennessean reported.
The company said about 300 employees who had made computers will now work in Dell’s Nashville facility, boxing and shipping materials.
About 250 to 300 employees will remain in Lebanon, also handling boxing and shipping, Dell spokesman Ken Bissell told the newspaper.
Declining overall demand and a consumer shift to laptops caused the decision, Bissell said.
“We had more capacity than we have volume,” he said.
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January 12, 2009
Update: Dell agrees to settle consumer complaints in 47 states
(Update 4: Notes 47th state, Wyoming, will join the settlement.)
Dell Inc. said today it reached a settlement agreement with attorneys general from 47 states, including Texas, and will pay roughly $3.85 million to settle consumer complaints.
The agreement, reported by Dell on its corporate blog, will provide refunds to customers and cover the costs of investigations into past financing, warranty and tech-support offerings.
The settlement covers certain complaints on purchases since April 1, 2005. Under the agreement, Dell will provide restitution for customers who had problems with its no-interest financing plan, next business-day service contracts, warranty services and rebates.
A Dell spokesman said the company worked with attorneys general to resolve the complaints and noted that the agreement did not stem from any lawsuit.
Texas Attorney General Greg Abbott and Dell reached an agreement separate of other states, but the terms of their deal all but mirrored those in the broader settlement. Dell included the Texas figures — $162,500 in a retribution fund for consumers and $62,500 for state attorneys’ fees and costs — in its total of the broader agreement.
Texas consumers who bought a computer from Dell on or after April 1, 2005, and have an eligible complaint can complete an online claim form. Deadline for restitution claims is April 13. (The claim form and further information can be found here.)
According to the release, Dell also agreed to clarify its advertising and better disclose details of its financing, warranty and tech-support offerings.
A separate press release from the North Carolina attorney general’s office said Dell agreed to pay at least $1.5 million to affected customers nationwide. It also will pay state costs and fees.
“The amount of money individual consumers get will depend on the number of eligible recipients and the total amount claimed,” the release said.
The total Dell pays could increase, albeit slightly, if any of the three remaining states join the agreement. Several states signed on as late as Monday morning, according to the company.
One state that has not joined the agreement is New York, where a state judge in May ruled that Dell had “engaged in misleading, deceptive and unlawful business conduct.” He ordered a proceeding to determine how much the company must reimburse affected customers.
A Dell spokesman said litigation continues that case, which was filed in 2007 by New York Attorney General Andrew Cuomo. (More information on the New York case can be found here.)
The other two states that have not joined the settlement yet are Georgia and New Hampshire. A top official at the Wyoming attorney general’s office said today that the state would sign on to the agreement.
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January 9, 2009
Dell acquires part of consulting and tech-services firm
Dell Inc. said this morning it has purchased $12 million of Allin Corp. stock in exchange for the company’s Microsoft-related services and consulting unit.
The small acquisition will bring 100 employees to Dell Global Services and beef up its services and consulting expertise for Microsoft systems and business-management software.
Dell will take over Allin’s business units in Philadelphia and Pittsburgh, as well as San Jose and Walnut Creek, Calif.
The acquisition continues a string of companies Dell has purchased to help build out its technology services and consulting businesses.
The company has focused on those areas to boost growth as commercial customers increasingly look for technology providers that can offer a full suite of hardware, software and services expertise.
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January 8, 2009
Dell outlines severance, consulting pay for outgoing executives
Michael Cannon and Mark Jarvis worked at Dell Inc. for less than two years, but each will get a sizable compensation package when they depart later this month.
Cannon, who came to Dell in February 2007 to lead the reorganization of its global supply chain and manufacturing operations, will receive a $10 million cash severance, according to a filing today with the Securities and Exchange Commission. The payment was part of the initial agreement hammered out to entice him from his job as chief executive of Solectron Corp.
Cannon (pictured at right) also signed a two-year consulting agreement with the company, for which he’ll be paid $1.5 million.
Jarvis (at left) was Dell’s chief marketing officer since April 2007. He will receive two payments of $625,000 each. The first represents a year of additional salary. The second is roughly equivalent to his bonus for the current fiscal year.
He did not sign a personal consulting agreement. However, as stated in Dell’s Dec. 31 announcement about the executives’ departures, Jarvis will continue to work with the computer maker through his consulting business.
Cannon will leave Dell on Jan. 31, the filing said, and Jarvis will depart on Jan. 23. Both men signed non-disclosure and non-compete agreements as part of the severance deals.
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Update: Dell to close factory in Ireland
(Updated: Adds information about expansion in Poland and corrects the span of Ireland’s economic rise.)
Dell Inc. announced this morning it will shut its computer factory in Ireland and move European production to its newer facility in Poland.
The move, part of the company’s continuing overhaul of its supply chain and manufacturing network, marks the second factory Dell has closed in the past year. The company phased out its desktop manufacturing operations in North Austin last year, although it continues to build servers in Central Texas.
“This is a difficult decision, but the right one for Dell to become even more competitive, and deliver greater value to customers,” Sean Corkery, vice president of operations at Dell’s factory in Limerick, southwest Ireland, said in a release.
A Dell spokesman said the company will install additional manufacturing lines in its Lodz, Poland, factory to accommodate the additional volume.
The closure of the Ireland plant over the next year will leave 1,900 employees out of work in a country suffering from sharply rising unemployment rates. Throughout the 1990s, Ireland became a beacon for developing countries as it attracted dozens of high-tech companies and its economy soared. The country now is being pummeled by high-tech cutbacks, a housing collapse and the global economic turmoil.
Dell had been Ireland’s second-largest employer. According to an Associated Press report, the company’s remaining 1,100 Irish workers in Limerick will continue to coordinate manufacturing operations throughout Europe, and research and develop new products. Another 1,300 employees at Dell’s marketing and sales center for Europe, located in suburban Dublin, were not directly affected by Thursday’s cuts, the report said.
Dell’s move to close the Ireland factory had been anticipated by Irish media as far back as September 2006, when Dell confirmed plans to build the new factory in Lodz, Poland. The foreboding heightened in recent weeks. In December, at least two high-ranking government officials flew to Austin to meet directly with Dell executives, including CEO Michael Dell, in hopes of devising a plan to save the factory and its jobs, according to Irish news reports.
The company’s decision to go ahead with the closure comes amid a broad rethinking of its entire manufacturing network. Dell already has transferred much of its computer design and manufacturing operations to outside companies that specialize in such work. Most computer brands, including Hewlett-Packard Co. and Apple Inc., rely heavily on those contract manufacturers, most of which are based in Asia.
By using contract manufacturers, computer companies have more flexibility to control costs to match the market’s fluctuations. That flexibility comes at the expense of the deep customization and quick delivery that long stood as one of Dell’s primary advantages — but has become less important to customers in recent years.
According to previously published reports, Dell is considering the sale of all or part of its manufacturing network worldwide, which before the Ireland announcement included 10 factories in seven countries. It operates three factories in the U.S., including the server-manufacturing plant in North Austin. The other two domestic facilities are in Nashville, Tenn., and Winston-Salem, N.C.
Dell also operates factories in Brazil, Malaysia and India, as well as two plants in China.
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December 31, 2008
Update: Dell outlines plans to restructure; two top execs will leave
Dell said this morning two of its top executives will leave in January and said it will realign its operations worldwide to match how customers use technology rather than where they employ it.
In a release issued this morning, the company said chief marketing officer Mark Jarvis and Michael Cannon, the president of Dell’s global operations, will depart by the end of January. Both will consult with Dell moving forward, the company said.
According to a 2007 regulatory filing, Cannon appears to qualify for a $10 million cash severance payment when he leaves Jan. 31.
Dell’s realignment will mold its business around its three main commercial-customer segments: Large enterprise; public customers, including government, education and health care; and small and medium businesses. Dell already organized its consumer business under one global operation, led by Ron Garriques.
“Customer requirements are increasingly being defined by how they use technology rather than where they use it,” Michael Dell said in the release.
The moves extend two years of radical restructuring for Dell, which has fallen behind Hewlett-Packard Co. as the world’s largest computer maker. Since returning as chief executive early in 2007, Michael Dell has made sweeping changes to both his company and the executive team that runs it.
Dell brought new blood into his inner circle, most of it lured away from high-ranking positions at other technology companies with large compensation packages. Cannon came to Dell from Solectron Inc., a leading contract manufacturer and supply chain company, where he was CEO. Jarvis had spent 14 years at Oracle Corp., at one point leading its marketing efforts.
Jeff Clarke, currently head of Dell’s commercial desktop and notebook products, will replace Cannon as head of global operations, the company said. Erin Nelson, who led marketing in Europe, will succeed Jarvis as its global marketing chief.
Under the new corporate structure, Steve Schuckenbrock will lead the large enterprise business. In his current chief information officer role, Schuckenbrock already has put in motion plans to better align Dell’s technology infrastructurue with the global nature of the company’s operations.
Paul Bell, currently head of the Americas business, will lead the public group. Steve Felice, who oversees Dell’s operations in Asia, will take over the small and medium business group. Felice will continue to work from his office in Singapore.
The company said it plans to complete the realignment and start reporting its earnings to match the new structure during the first half of 2009 (its fiscal 2010).
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December 30, 2008
Report: Dell to shake up management team
Dell plans to make several changes to its executive team, a shake up that is expected to include the departure of its marketing chief and a different position for the man initially hired to reshape the company’s global operations, according to a report published late Tuesday on the Wall Street Journal’s online site.
The report coincides with at least two sources in Austin who said a number of high-level Dell employees recently have made inquiries about possible positions at other companies.
The Wall Street Journal, citing “people briefed on the matter,” said chief marketing officer Mark Jarvis (pictured at left) is expected to leave Dell. Michael Cannon (at right), currently the company’s president of global operations, “will likely stay on in a different capacity,” the report said.
Both Jarvis and Cannon joined Dell during the company’s sweeping management turnover in 2007. Upon his return as chief executive, Michael Dell replaced most of his inner circle with new executives, most of whom were recruited with large compensation packages from top positions at other technology companies.
Cannon joined Dell from Solectron Inc., where he was CEO. Jarvis previously spent 14 years at Oracle Corp.
Dell spokesman David Frink declined to confirm the Wall Street Journal report, saying the company does not comment on speculation. He said the company has been in the process of reshaping its operations since Dell returned as CEO in January 2007.
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November 26, 2008
Dell cuts prices, offers interest-free financing for commercial customers
It’s no secret this economy is going to put a hurt on technology sales. Like everyone else, computer makers are looking for ways to lessen the blow.
Today, Dell said it will offer commercial customers a set of new financing and leasing options, including zero-percent financing “for qualified large business and institutional customers.”
The company also said it has dropped prices on some of its key business notebooks, servers and other components.
Last week, Dell reported better-than-expected profit for its fiscal third quarter. But the company’s revenue came up about $1 billion short of Wall Street’s forecast.
With the tumultuous economy curbing technology spending, the company said it would focus on selling more-profitable products, particularly to commercial customers.
Hewlett-Packard reported strong earnings earlier this week, but CEO Mark Hurd said the company was taking a conservative view given the economic conditions. H-P has seen credit loosen up for some of its commercial customers, Hurd told analysts.
In a call with reporters, Hurd said his company also was working to help finance and facilitate technology purchases, in particular with partners who re-seller H-P products. He said the company was “doing what we can” to help those channel partners who are struggling to get working capital.
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November 13, 2008
Dell shares hit single digits (Update 1 - The afternoon rebound)
It’s an arbitrary threshold, but a symbolic one.
Dell’s stock dipped below $10 today, dropping as low as $8.88 in midday trading. Just before the market close, the shares had rallied back above $10.
The last time the company’s shares closed below $10 was Dec. 26, 1997.
Personal computer makers, already seeing commercial technology spending cool in recent years, now have to deal with consumers increasingly worried about the economy. Research firms and analysts are taking a grim view of technology spending across the board this holiday season and throughout next year.
On Wall Street, Dell is taking the worst of the hit, mainly because the company has broader exposure to the slowing U.S. market, is still going through a radical reshaping of its businesses and doesn’t have the momentum rivals H-P, Acer and Apple hold in the consumer market.
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October 30, 2008
Dell faces a second discrimination lawsuit, this one in Austin
Another former Dell employee quietly filed a separate gender-discrimination lawsuit against the company Wednesday, the same day a national law firm announced it had filed a similar complaint in San Francisco.
The second case to come to light, filed in federal court in Austin, was brought by Austin resident Jill Hubley, who worked as a senior strategist in Dell’s human resources department until September 2007. The lead attorneys are Geoffrey Weisbart and Julie Springer, each of whom practices law in Austin.
Similar to the first case filed in San Francisco federal court, the Austin complaint seeks class-action status and claims Dell “engaged in a pattern and practice of gender discrimination with respect to compensating and promoting female employees.”
Unlike the California case, the Austin lawsuit does not involve claims of age discrimination.
Four former managers in Dell’s human resources department, including Austin resident Mildred “Jan” Chapman, are lead plaintiffs in the California case.
Dell spokesman David Frink this afternoon said he was not familiar with the Austin complaint. In reaction to the California case on Wednesday, Frink said Dell does not tolerate discrimination and takes “any claims against our recognized efforts to embrace diversity and equal opportunity seriously.”
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October 1, 2008
Dell hooks up with Motion, Intel to provide wireless networks for health care facilities
Motion Computing designs tablet PCs for people who want a computer while constantly on the move. Of course, it helps if those users can stay connected to the Internet at the same time.
So Motion developed a wireless consultation service, primarily aimed at hospitals, which happen to be some of its biggest customers. The idea was to help health care facilities design a network that would provide wireless access in rooms, halls, elevators — basically anywhere a nurse or doctor might carry a computer.
The service got a big boost today from Dell, which said it will start selling an expanded version of the service. Dell, Intel and Motion will offer a mobile, point-of-care wireless assessment service that’s designed to help health care facilities get 100 percent coverage and maintain constant, secure access to patient information.
It’s no easy task, given the constant movement and myriad devices in a hospital. But it could be a big payoff. In a release, the companies cited a Kalorama Information report that found 80 percent of hospitals expect to have wireless networks by 2010, spending as much as $10 billion over the next five years to build them.
“We’ll be using the same design methodologies has before,” Motion spokeswoman Mary Anne Gunn wrote in an e-mail, “but in partnership with Dell our reach is greatly expanded.”
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H-P buys LeftHand; lines up against Dell's EqualLogic
Hewlett-Packard’s not about to let Dell just have its way in a quickly growing segment of the storage market.
H-P today said it has agreed to buy LeftHand Networks Inc. for $360 million in cash. The Boulder, Colo., startup company develops Ethernet-based storage systems. One analyst estimated LeftHand’s annual revenue around $100 million.
The move gives H-P a product to compete directly with Dell’s EqualLogic storage systems. Dell paid $1.4 billion for EqualLogic early this year, at the time saying the deal would give the computer maker a leg up in a quickly growing storage segment.
It was the largest acquisition in Dell’s history, and it was believed to be the largest cash-only acquisition of a venture-backed startup company.
An iSCSI storage system is Ethernet-based, and it employs Internet protocol for communicating with the rest of the network. Because of that, it can provide a cheaper, easier-to-use, midrange alternative to high-end fibre channel systems.
The iSCSI systems also lend themselves to virtualization, a rapidly growing set of technologies that allow the creation of several virtual machines from each piece of hardware. A virtualized system gives technology managers more flexibility in how they allocate their computing resources, allowing them to run their data centers more efficiently and manage them more easily.
To date, widespread use of virtualization has happened mostly on servers. But dozens of technology companies are developing new products that virtualize nearly every piece of the network.
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July 31, 2008
Dell shares jump on uprgade
Shares of Dell Inc. got a boost this morning when an analyst raised his rating on the stock to ‘outperform.’
Louis Miscioscia, of S.G. Cowen, said he thinks Dell stock will beat the overall stock market by 25 percent in the next year.
He cited the company’s cost-cutting efforts and its intensifying push into the consumer market.
The analyst said Dell will save $65 million a year from the 3,700 jobs it cut worldwide in April. He said he thinks another 1,900 jobs were cut in the May-July period.
On the consumer side, Dell now sells its PCs in 13,000 retail stores worldwide, and has put a new focus on consumer design.
Dell shares rose almost 5 percent on the report, but slipped a little later in the mornng. They were up 4 percent at $24.94 at 11 a.m.
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July 1, 2008
Michael Dell buys huge stake in his own company
Michael Dell purchased more than 4.5 million shares of Dell Inc. in the past week, according to a regulatory document filed today.
Dell acquired the shares in three lots, paying between $21.89 and $22.39 a share. Following the transaction, he directly owned 220,664,682 shares. He holds an indirect stake in 29.5 million shares with his wife, a gift trust and a 401(k) plan.
More information to come.
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June 30, 2008
Carty departs Dell's executive suite $300,000 richer
Dell has paid recently departed CFO Don Carty $300,000 as a bonus for the almost 18 months he spent in that job.
The award was not part of any prior plan or contract, the company said, but was approved by the board’s compensation committee “in recognition of his dedicated service to the company,” according to a regulatory filing Monday.
Carty took over as chief financial officer at the beginning of 2007, a time when Dell’s business was slipping and its accounting was under investigation by the company’s board and by federal authorities. The federal probes remain open.
During his tenure, Carty shored up the internal oversight of Dell’s bookkeeping, helped CEO Michael Dell shape the company’s turnaround strategy and led a push to cut costs. The latter effort includes plans to cut at least 10 percent of the company’s work force, about 8,800 jobs.
Carty, who remains on Dell’s board, officially resigned June 13 to open the top finance post for Brian Gladden, a former General Electric executive hired in May.
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June 10, 2008
Dell agency's new name: Enfatico
The suspense is over. It’s the moment you’ve all been waiting for….Project DaVinci, the all-Dell advertising agency with offices in Austin, has finally settled on a name.
According to spokesman Peter Himler, Enfatico is a “musical notation that means to play each note with emphasis, or emphatically.”
Project DaVinci is a creation of advertising conglomerate WPP, which was hired by Dell to consolidate its advertising and marketing efforts into one agency.
Now called Enfatico, the agency has offices in Austin, Miami, San Francisco and its headquarters will be in New York City.
Our last blog item on Enfatico discussed the hiring of a top chief executive and the disclosure that Austin would not be the agency’s headquarters.
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May 19, 2008
WPP names CEO of Dell's Project DaVinci
WPP Group has named a chief executive for Project DaVinci, its working name for the Dell-only advertising agency.
Torrence Boone was named the chief executive Monday and will head up the agency’s New York City headquarters. (Boone is pictured to the right.)
Naming a CEO is an important milestone for DaVinci, which previously had set a deadline of early March to have the 1,000-person agency in place.
This is the first formal announcement, too, that DaVinci will not be headquarter in Austin, but rather in New York, where many of the advertising industry’s top shops are located. Austin will retain, however, a satellite office with at least 200 people.
Boone, 38, will report directly to Sir Martin Sorrell, the chief executive of WPP.
According to a press release from WPP, Boone has more than 10 years experience in the marketing and advertising industry.
He was the vice president and general manager at Avenue A, and joined Digitas in 2001, where he was president. He was also a senior manager at Bain & Company, where he specialized in healthcare and consumer products. And he’s got two degrees, a bachelor’s from Stanford and a master’s from Harvard Business School.
“I’m thoroughly excited about Project DaVinci’s prospects and look forward to working with an exceptionally talented team to tackle the marketing challenges at Dell,” Boone said in a written statement.
To date, DaVinci has filled all of its top leadership positions and hired more than 500 employees. Besides Austin, DaVinci will have offices in Miami and San Francisco, and a presence in London, São Paulo, Singapore and Beijing. The new agency is a consolidation of ad work that was previously handled by more than 800 firms.
(Earlier we wrote about AdAge’s story that “Synarchy” is a leading candidate for Project DaVinci’s permanent name.)
WPP spokesman Peter Himler said Synarchy is only one of several names being batted about.
Click here to read the AdAge story on Boone.
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Dell names new chief financial officer
Dell has named Brian Gladden its next chief financial officer and said he will replace Don Carty on June 13.
Carty, who will remain on Dell’s board, replaced former CFO Jim Schneider in December 2006 during the early stages of a growing investigation into the company’s accounting. Carty’s position was not expected to be long term.
Carty “has played a key role in reestablishing transparency and integrity in our financial practices,” CEO Michael Dell said in a release announcing Gladden’s appointment.
Gladden will begin working at Dell on Tuesday as the designated financial chief and take over the full position when Carty leaves. Before joining Dell, he was chief executive of SABIC Innovative Plastics Holding BV, which formerly was GE Plastics, according to the release.
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May 13, 2008
Dell will phase out XPS gaming rigs in favor of Alienware
Dell acquired Alienware two years ago to give it more street cred with gamers who buy high-power, high-price PCs. Now it’s dropping its own XPS gaming rigs to give Alienware some more breathing room, according to a report in the Wall Street Journal (subscription required).
Dell will phase out four of its leading-edge XPS systems and focus its gaming efforts on Alienware models, the report said. Arthur Lewis, who heads Dell’s gaming group, told the Journal that the competition between the XPS and Alienware brands was unproductive. Dell will continue to sell several other XPS consumer PC models.
When Dell acquired Miami-based Alienware in May 2006, it said it would let the company operate largely on its own to help keep its edge among gamers. At the time, many gamers and analysts were concerned that the acquisition would mute some of Alienware’s buzz in the market.
Following the Dell-Alienware deal, Hewlett-Packard acquired VoodooPC, another small but popular gaming-PC maker.
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May 1, 2008
Dell enters Australian retail with Officeworks deal
Dell will begin selling some of its consumer products in Officeworks, a leading home-office and small-business retail chain in Australia.
The 104 stores in the chain will carry some of Dell’s top-end XPS models, as well as a selection of its mainstream desktops, notebooks, printers and flat-panel displays, said Bob Kaufman, a spokesman for the PC company.
The agreement marks Dell’s first retail presence in Australia. Over the past year, Dell has gone from virtually no retail presence to sales in more than 12,000 stores worldwide, including Best Buy and Wal-Mart in the U.S.
Officeworks customers will have the option to order a custom-built PC or buy one in stock at the store, Kaufman said. Dell offers both direct and in-store purchasing options through retail chains in some other countries as well, he said, including the recently announced partnership with Croma stores in India.
Dell will continue to operate about a dozen kiosks in Australia, Kaufman said. The company closed its 140 U.S. kiosks in January.
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April 30, 2008
Dell sues small PC maker over product names
Dell filed a lawsuit Monday against 3K Computers, claiming three of the Florida firm’s product names are too similar to Dell’s own.
It wants a federal court in Miami to bar 3K from using the names, and it’s asking for triple damages. A 3K spokesman wasn’t immediately available Wednesday.
The names in question (Dell’s vs. 3K’s):
Notebooks — Latitude vs. Longitude
Desktops — OptiPlex vs. OptiSys
Servers — PowerEdge vs. PowerSharp
Reminds me of the movie “Coming to America.” In it, Eddie Murphy plays Akeem, an African prince who comes to New York City in search of a bride. He takes a job with a local burger joint called McDowell’s.
“See, they’re McDonald’s; I’m McDowell’s,” says owner Cleo McDowell (played by John Amos). “They got the Golden Arches; mine is the Golden Arcs. They got the Big Mac; I got the Big Mick. We both got two all-beef patties, special sauce, lettuce, cheese, pickles and onions, but their buns have sesame seeds. My buns have no seeds.”
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April 29, 2008
Dell will cut up to 875 jobs in EMEA
Contrary to popular belief, Dell is cutting jobs outside North America, too.
The company told employees in Europe, the Middle East and Africa (EMEA) that it plans to cut 4 to 5 percent of the regional work force by the end of the year, spokesman Jess Blackburn said. With 17,500 workers in the region, the cuts could impact as many as 875 people.
According to a report in the Irish Times, about 250 of those layoffs will come from its Ireland offices, where it current employs about 4,500 workers. (Its Dublin office is pictured here.)
By far, most of Dell’s layoffs to date have come from its North American operations. Over the past year, it has announced the closure of four call centers and its desktop PC manufacturing operations in North Austin.
Those moves will eliminate more than 4,100 U.S. and Canadian positions by the end of the year.
Dell has said it will cut at least 8,800 jobs worldwide as it looks to reduce costs and reshape the company.
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April 25, 2008
Lenny Dykstra likes Dell's stock
Around Independence Days past, the Philadelphia Phillies would invite their fans down to the ratty artificial turf of Veterans Stadium for the annual post-game fireworks show.
My friends and I would find a spot just behind second base, the perfect place to watch the patch of center field that Lenny Dykstra patrolled during the game. Dykstra — or Nails, as he was known — was the Phillies lead-off hitter and the soul of their ruffian 1993 National League championship team.
One by one, fans would sit down in Nails’ domain, only to shoot back up a few seconds later, trying in vain to wipe tobacco juice off their backsides. (See the picture for any explanation you might need.)
I couldn’t help but think of this story while reading Dykstra’s commentary on Dell shares this morning. He has written a regular column for TheStreet.com since 2005.
The performance of Dell’s stock has been about as attractive as sitting in tobacco juice lately. And maybe that’s why Dykstra has taken a shine to it. He suggests going long on Dell.
As with any stock advice, take Dykstra’s with a grain of salt. He writes that Dell has no debt, although the PC company recently sold $1.5 billion worth.
But then nuance and Nails never quite went together anyway. As he puts it: “My success has kept me here (on TheStreet.com), but I had to pay my dues to get here. As for Dell, it has taken plenty of lumps as of late, too. But winners find a way to succeed, and Dell is a solid company.”
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April 24, 2008
Dell wraps up its acquisition of MessageOne
Dell Inc. said today it has completed its $155 million cash acquisition of MessageOne Inc., a company founded by Michael Dell’s brother, Adam Dell.
Dell will add MessageOne’s e-mail archiving and disaster-recovery capabilities to a growing list of services it can provide business customers over the Internet. Under CIO Stephen Schuckenbrock, the computer maker is building out a broader, customizable set of Web-based technology services.
Schuckenbrock has also led Dell’s acquisitions of SilverBack Technologies Inc., Everdream Corp. and ASAP Software Express Inc.
MessageOne employs 150 people, most of them in Austin. It was founded in 1998 by Adam Dell. Its clients include many Fortune 500 companies as well as other small and medium businesses.
Because Michael and Adam Dell and their parents stood to reap a windfall from the deal, the PC company’s executives and board excluded Michael from the negotiations. It also got an independent opinion from Morgan Stanley & Co. Inc., concluding that the acquisition was fair for Dell and its shareholders.
Michael and his family earned about $12 million, all of which the company said they would donate to charity. Adam received about $966,000 and the brothers’ parents received about $450,000.
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April 23, 2008
Dell closing its Ottawa call center
Dell said today it will close its Ottawa, Ontario, call center, cutting about 1,000 jobs.
The company laid off about 500 workers today and will close the rest of the facility’s call center operations by the end of July, spokesman Jess Blackburn said. He said the company will keep about 100 workers in the Canadian capital, primarily to handle enterprise and government sales.
It’s the fourth North American call center Dell has closed within a year, including the only other Canadian support center in Edmonton. The other facilities were near Waco and in Roseburg, Ore.
The layoffs are part of the company’s efforts to streamline its operations and reduce its workforce. CEO Michael Dell said earlier this month that the company would exceed the 8,800 job cut targes it announced in May 2007.
Dell continues to operate tech-support centers in Austin, Nashville, Oklahoma City and Twin Falls, Idaho. All told, it operates about 25 such centers worldwide, Blackburn said.
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April 21, 2008
Update: Dell to expand dedicated tech-support teams for home users
Dell today announced it will offer home users a premium tech-support package that matches individual customers with a dedicated service team in the U.S. or Canada.
The program, which Dell started testing last fall in New York City, allows consumers to contact the same small group of agents every time a problem or question arises. The pilot program included more than 20,000 customers, and satisfaction ratings exceeded 90 percent, the company said in a release.
The company also said it will provide new services for customers who buy Dell products in retail stores. The retail offers cover a range of Dell products and include TV, home-theater and wireless-network installations.
Dell will charge a fee for the premium and retail services, which are expected to roll out in the next few weeks, spokesman Bob Kaufman said.
After rebounding in 2006, Dell’s performance on a national customer-satisfaction survey dropped to one of the industry’s lowest scores last year. Before 2005, the company consistently ranked atop the PC industry on the American Customer Satisfaction Index. But it since has struggled to regain its reputation for quality service, particularly among consumers.
Kaufman said Dell’s internal surveys show the company’s customer satisfaction scores among consumers increasing 15 percent in the past seven quarters.
The company also has reported high satisfaction levels from new services that, with a customer’s permission, allow its tech-support staff to remotely access a PC and fix many of the most common issues that arise.
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April 17, 2008
Dell expands retail partnerships in China
The workers in Dell’s China design center no longer have to walk across the street to see the company’s computers in a retail store.
Dell said today it has added six new retail-store partnerships in China, including a deal with Suning, the country’s second-largest electronics chain behind Gome. Dell also announced it would expand its existing partnership with Gome to almost 900 locations.
Suning (see its Chinese site here) has a store in the same building as Dell’s design center in Shanghai. Gome has a location just across the street. Aside from the layout, the two Chinese chains look much like a Best Buy store in the U.S., carrying a wide range of electronics and appliances.
About 300 of the Suning stores will stock Dell products at the start of the deal. The computer maker also announced partnerships today with five smaller Chinese retail and PC chains: Hontu, Wuxing, Meicheng, Heng Chang and Heyong.
Dell has expanded its retail presence around the world over the past year, and now sells products in more than 12,000 stores worldwide. The expansion has been especially vital in emerging markets such as China, where the company’s traditional direct-sales model has been slow to take off among consumers.
While roughly 90 percent of the consumer PCs sold in China go through small vendors packed into large technology malls, Dell has focused its retail efforts on the growing Chinese retail chains.
“We think that teaming with these established brands provides a higher level of customer service,” said Dell spokesman Bob Kaufman.
The partnerships have helped push Dell’s presence beyond the largest Chinese cities, but the decision to focus on the large chains so far has limited its retail presence in smaller cities.
Lenovo Group Ltd., the Chinese computer maker, dominates its home market with an extensive network of distribution and retail-store deals. H-P also has a much broader retail network than Dell. In September, the vice president for H-P’s personal systems group in China said his company had more than 10,000 partners covering about 435 cities.
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April 4, 2008
Wall Street takes wait-and-see approach on Dell changes, cost-cutting
The fallout from Dell’s meeting this week with Wall Street analysts fell across a wide spectrum of opinions Friday, but the common theme was: We’ll wait and see.
At least two analysts downgraded the stock Friday morning, enough to pull Dell shares down almost 2 percent at midday. But others said the meetings left them with a sense that the company could be doing the right things to complete a successful turnaround.
Dell did not offer any specific guidance, and at one point CEO Michael Dell suggested that giving a clearer view of financial targets would be difficult and perhaps misleading with the company in such flux.
That’s not what Wall Street wants to hear, but it’s something analysts seem to have grudgingly accepted — at least for now.
Analysts at Goldman Sachs and W.R. Hambrecht & Co. cut their ratings on Dell shares sto “hold.” In a research note, Goldman Sachs analyst David Bailey wrote that the computer maker is “beginning to take the right steps,” but that the moves “are likely to take more time than expected to improve Dell’s financial results.”
At Hambrecht, Matthew Kather was more skeptical. In his note, Kather said he wasn’t convinced Dell could work well with firms that re-sell its products, didn’t think its cost-cutting plans go far enough and didn’t feel that the company has a concrete technology-services strategy. He suggested investors hold onto their shares but not buy more until “Dell demonstrates much more concrete progress.”
Bear Stearns analyst Andrew Neff took a more bullish view. In his note, Neff said that a lot of risks remain, but that he and his team have “growing confidence that Dell ‘looks and feels’ like a turnaround with potential for significant leverage.”
He suggested investors compare the Dell of today with the Hewlett-Packard of two years ago, when H-P was in the early stages of what has turned into a strong resurgence. Neff said that view “highlights the potential for improvement over time.”
What was common throughout, from both the analysts and Dell executives, was that this process would take some time and that it wouldn’t be easy.
As Caris & Company analyst Shebly Seyrafi wrote: “The company will be playing a delicate balancing act over the next few years — how to create balanced revenue growth while cutting expenses.”
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April 3, 2008
Dell plans more job cuts
Dell Inc. will cut more than the 8,800 jobs it announced last year, CEO Michael Dell told analysts this morning in Round Rock.
Dell did not provide further details on the additional cuts, but said his company will look to automate more of its operations and move more work to areas with lower-cost labor.If there’s a more competitive location to do things, Dell said, the company will move operations there.
The company said Monday it will close its Austin desktop factory and consolidate those operations into its other U.S. facilities. It also has closed three call centers in North America and cancelled plans to expand a fourth.
The company is zeroing in on a wide range of cost cuts in its efforts to improve its competitiveness. It has said it will cut $3 billion of expenses in each of the next three fiscal years.
Much of those costs will come from changing product designs — better matching the performance of components it uses with the price level of the products they go into.
“We’re not satisfied with the current state of affairs,” Dell said, “and we’re on a mission to address this.”
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April 1, 2008
Dell confirms it will close merge facility, consolidate operations
Dell Inc. confirmed it will shut its Americas Merge Center in Austin and consolidate that and its Austin desktop manufacturing operations into other sites in the U.S.
In a letter sent Monday to the Texas Workforce Commission, Dell senior counsel Lara Cardin de Leon said the company will “permanently” close the merge facility and the Topfer Manufacturing Center “in their entirety.”
“Dell plans to consolidate these operations into its other manufacturing and operations facilities in Central Texas, Middle Tennessee and North Carolina,” de Leon wrote.
The roughly 900 job cuts announced Monday includes the layoffs at the merge center, spokesman Jess Blackburn said. He declined to provide more detail on where or whether Dell will consolidate the merge and manufacturing operations.
Blackburn said the company uses the merge center, located at 401C Parker Drive, to help customize systems for business customers. In a description of a health-care program on its Web site, Dell described the center as the “logistical assembly point where staging and assembly are coordinated before deployment.” Having that facility allows the computer maker to reduce on-site set up time and expense, the online description said.
Employees at both of the closing facilities will have the option to apply for other jobs at Dell that match their skills, Blackburn said. According to de Leon’s letter, employees who don’t find other jobs will be laid off beginning June 2.
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March 31, 2008
Dell to close Austin plant, cutting more than 800 jobs
Dell Inc. said Monday it will close its desktop computer manufacturing plant in North Austin by the end of this year, cutting 900 jobs as part of a global cost-cutting campaign.
The company said the plant closing is part of a $3 billion program to cut its product costs worldwide over the next three years.
That move will affect engineering design, manufacturing, logistics and materials across the company’s global product operations.
The factory that will be closed is the massive Topfer Manufacturing Center on Howard Lane, which has been a leading Dell factory since the late 1990s.
The plant closing is the biggest job hit at Dell in Central Texas since the company cut more than 5,700 jobs during the tech downturn in 2001.
The company also said it is considering “strategic alternatives” for some parts of its Dell Financial Services arm. A sale also could affect those jobs in Austin.
“We believe we have a $3 billion opportunity to drive both productivity and efficiency,” CEO Michael Dell said.
A spokesman said Dell officials will likely provide more details on the cost-cutting campaign at a financial analysts’ meeting in Round Rock which begins Wednesday.
Dell did not say where its desktop manufacturing operations will be shifted, but industry analysts expect most of the work will go to Dell’s newest U.S. factory in Winston-Salem, N.C.
The company employs about 17,500 people in Central Texas and 85,000 worldwide.
Dell said it has cut 3,200 jobs worldwide since it announced plans for a 10-percent workforce cut last May. The company said recently it still planned to hit that goal.
“Any additional cuts to its bloated cost structure would be well received,” wrote analyst Brent Bracelin with Pacific Crest Securities iin a recent report to investors. “Operating expenses are at an eight year high of 13.3 percent, which suggest that tighter cost-containment efforts are needed to restore investor confidence.”
Analyst Roger Kay with Endpoint Technologies Associate Inc. said such a move would repair Dell’s tarnished image for manufacturing and logistical efficiency.
“They let things slip. They took their eye off the ball,” Kay said.
Concentrating desktop assembly in North Carolina could make sense, Kay said, because Dell ’ splant there is close to its East Coast customers. The company also got hefty incentives from the state to build the plant.
“They carved a real sweet deal in North Carolina, and they need to use a lot of the plant capacity there,” Kay said.
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Do you work at the Dell Topfer plant?
If you work at this plant or with Dell at another location, what is the mood within Dell? What are your thoughts?
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March 19, 2008
Dell exec sells shares
The head of Dell’s global consumer division sold more than $2 million of his company shares this week, according to a regulatory filing released today.
Ron Garriques, president of Dell’s consumer business, sold 114,694 shares at a fraction under $19.83 each, the filing showed. The sale, made in two lots, was worth a combined $2.27 million before taxes. Following the transactions he still held 933,522 restricted shares, according to the filing.
Garriques joined the company 13 months ago, leaving his job as head of Motorola’s mobile devices group to help revamp Dell’s consumer business. Since then, Dell has started selling PCs through retail stores, and it has pushed out new and edgier hardware designs. However, the company hasn’t regained the industry-leading growth rates it enjoyed before it started to slump in 2006.
Garriques and other top executives at Dell each were awarded hundreds of thousands of stock options and thousands of restricted shares earlier this month — part of the company’s annual compensation packages for its top managers. Several executives sold small lots of stock over the past two weeks, a common practice to help cover taxes on large equity-compensation grants.
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