DELL

Penn State UniversitySchool of Information Sciences and TechnologyState College/University Park, PASeptember 3, 2004

we only have 3.5
percent of the population and 40 percent of the largest companies in the world and over half the wealth
of the world. That means that we're doing a lot of things really right and our people are very productive and are very capable.

We've transformed our economy in the last hundred years. A hundred years ago, 40 percent of thepopulation in the United States was involved in agriculture in some way. And people started comingout with machinery and tools and technology to make that culture more efficient and a lot of peoplesaid, "Hey, this is really bad, people are going to lose their jobs and that's a bad thing."Well, it turns out it wasn't such a bad thing because those same people went off to make airplanes andpharmaceuticals and do other things that are much more valuable. Now, one percent of the populationis involved in agriculture.We as a nation have to continue to move up the value stream in terms of what we're doing, and wecan't restrict other companies from coming into our market. We can't restrict our companies from goinginto other markets; 97 percent of the people that we want to sell our products to don't live in America.Now, what would happen if we went to China – which is the fourth largest market in the world for Dell –and said, “we want to sell you our computers but you can't sell us any of your products." It doesn'twork that way.America has high labor costs, but it's also got the highest productivity in the world. And the Americanworker has a great, promising future if he or she is educated and skilled. If they're a non-skilled workerand they're in a high cost economy, that's really challenging and so this is why education is soimportant, it's why institutions like yours are so critical. But we can't ignore the productive capacity thatexists in the other 97 percent of the world, and those are important markets for us.

One of our competitors recently announced some challenging financial issues and they didn't evenknow what their results were until well after the quarter was over. That's not likely to happen with us.We knew this morning how we were doing as of midnight last night.

DELL

Rotman Integrative Thinking SeminarUniversity of Toronto - Toronto, OntarioSeptember 21, 2004

Our product teams knew that the servers weren’t that complicated or expensive to produce,and customers were being charged unfair prices.

MICHAEL DELL: We've also found that our customer value helps us make better supply chain,logistics and inventory management decisions – we’ve created a pull system instead of a push system.The classical way to build products and deliver them to the customer was an anticipatory structurewhere you'd say, “There are 10,000 points of distribution. We have 100 different products and we thinkthese products are going to be purchased at each of these 10,000 points over the next number ofweeks.” Then the companies build them, send them out there, and hope they sell. And if they don’t sell,they’ll change the price and get them to sell anyway.Well, if you take the permutations and combinations with processors, memory, displays, disk drives,communications, operating systems, etc., you end up with just a tremendous number of differentvarieties. I pity the guy who has to guess what people are actually going to buy at these stores. If youcombine this with the enormously rapid decline in pricing, our typical competitor would have seven,eight, nine, ten weeks of inventory. Dell would only have three or four days. Component costs aredeclining about half-a-percent a week – that’s an enormous structural cost advantage which wetranslate into savings for our customers.

They were not thinking aboutsupply chain logistics and the integration of design, manufacturing, and the sales and service channels.
I haven't heard any good alternatives to globalization. Think about countries likeCanada or the United States that have a very small percentage of the worldwide population but controla disproportionate percentage of the wealth in the world. The reason for that is because we createthings that are valuable around the world, such as networking, yet it’s pretty complicated to understandand use. It takes brainpower, energy and work to go and create this value.

this industry will still produce 180 million microprocessorsthis year. There are new semiconductor fabrication facilities going up around the world. I believe you’llsee a lot of innovation now coming out of the semiconductor industry. For example, there are bigimprovements coming in power management and heat dissipation.

Figuring out what we really do well and thenpartnering with the best in the industry has made a huge impact on our success.There are some new challenges that have been created as a result of our size. For example, we’reconsuming more than 20 percent of the world's supply of LCD screens, which means that we need tothink carefully about how we get the capacity over the next three to five years. We need new plants,with the production of those new plants coming to us. With some of these suppliers, we haverelationships where we share risk and invest jointly in terms of capital to make sure we get the capacitywe need.

Our business has so manyvariables that are changing so quickly. If you wait for all the right information and data, you're too late.Some of these decisions you just have to go with limited information, decide what you think is right, andthen make adjustments along the way.

It’s not that their products aren't cool or interesting or fun. They’reinventing a lot of things that people aren't really willing to pay for. Apple does create some wonderfuland exciting products, yet they have 1.7 percent market share in the computer industry. One couldargue obviously that Apple could have more market share if they marketed their operating system tothe world, as opposed to trying to sell this tightly bound system of products and operating systemtogether. It might be a little too late for that.They’ve also been very innovative. The iPod has been a great hit for them in an economic sense, butonly because the rest of their business hasn’t been such a great success.

DELL

American Chamber of CommercePorto Alegre, BrazilNovember 3, 2004

As the television signal is moving from analog todigital, more people are integrating computing and media into the same device.

Brazil was the first placein the world that we picked for an international software development site for our own IT organization.We have several hundred programmers in Brazil that are writing software responsible for running Dell'sinternal operations around the world.

DELL

Oracle OpenWorldSan Francisco, CaliforniaDecember 7, 2004

We needed infinitely scalable systems; we needed systems that could support our growth. The rack approach has provided that scalability for the core of Dell's I/T infrastructure with high availability, high performance and the low cost that we need, plus we have no single point of failure. For a very large portion of Dell's mission-critical applications, we have come to rely on Oracle solutions ourselves.

one of the world's largest telecommunications providers is running their workload on a 72-CPU UNIX box that costs $2.9 million. They can run the same workload with just 11 Dell Power Edge 1750 servers at about two percent of the cost of this big UNIX box. And we even outperform that proprietary solution.

With all this value, there's been a huge move away from RISC and UNIX toward open industry standard servers.

DELL

Abilene Christian UniversityAbilene, TexasFebruary 8, 2005

not done by replicating something which already exists. To create a real breakthrough, you have to do something which has never been done before or you have to do it in a way which is dramatically better than something that's previously been done.

encourage our employees to learn, both through structured courses and practical, hands-on training. The more we encourage them to learn about new techniques and principles, the greater impact they can have in their roles and on the company as a whole.

I'm having fun doing what I'm doing. It's a great thrill to be a part of a company like this, to watch it and our people grow and evolve. To witness all the opportunities we have to impact communities and society as a whole.

DELL

Gartner Symposium/ITxpo 2005Orlando, FloridaOctober 20, 2005

Dell is really all about productivity

Our direct model allows us to build relationships with customers and use the information they give us to develop and improve our products and services.

you've seen is tremendous growth in productivity and reductions in the cost of technology to where most of the cost is in the service vs. the product.

We understand customer requirements and then synthesize those into solutions.

we've made infrastructure services more repeatable, more execution-oriented, more of a quality focus, and that's made them more accessible.

use those markets in our supply chain strategy.

Data points.

If you look at our supply chain, we are an information-driven business. Let's say on a given day we sell 190,000 computers. Those orders come into Dell through a variety of mechanisms -- it could be an SAP or Oracle link with a customer, online or on the phone. The orders generate signals within nanoseconds that tell our suppliers what to deliver to our factories around the world. We have replaced inventory with information. What you have is a much more finely tuned machine in terms of rapidly delivering against customer expectations with high quality and with great efficiency.

Dell on Dell
We have consistent business processes. We don't work through dealers and distributors. We have a consistent environment for sales, for support, for manufacturing. This means that when we bring up a new factory, there’s already a set of systems which are basically identical to our other factories in the world. We don’t have to reinvent these things, so it gives us much more scale and leverage.

MICHAEL DELL: The history of our industry is one of companies that develop proprietary hardware and often have proprietary services that go along with them. These companies charge incredible sums of money for those products. They often rent software that goes along with those products. They'll charge you $250 an hour to make it all work, and they'll stay there until all your money is gone. (Laughter) That's not our model.

Service our products.

We've really bet the whole company on scale out – our vision of the Scalable Enterprise.

we believe that with the transition to 65 nanometers, Intel is going to take a decisive lead once again in microprocessor performance, in performance per watt.

we have a lower cost structure and because we sell direct to customers.

we have developed our own technologies for doing things that address customer pain points – like understanding when they're low on ink and letting them order new supplies directly from the Internet. It's a pretty simple thing but it actually provides value.

reductions in the hardware acquisition costs.

We’ve dramatically driven down gross margins in the industry. We’ve provided more value, which has accelerated the accessibility of these products and made the market much larger in terms of units.

DELL

Hitotsubashi UniversityTokyo, Japan May 24, 2004
As we do a micro-analysis of the supply chain and the costs of all the molecular ingredients that go into that, what you find is massive inefficiencies in the way these products are delivered today.

We find a lot of markets that haven't been subjected to the same Darwinian economic evolution that's occurred in the PC market, and also the same people who buy computers, well, they also buy printers.You can't use a printer unless you have a computer, so it's a very large adjacent market, very easy to sell those products to the same customers.

we've changed the whole paradigm. The paradigm now is you don'thave to go to the store to get ink, the ink comes to you. It's a direct model. So your printer tells youyou're low on ink, you order ink and you get it the very next day.

And I think this goes back to a lack of understanding. Competitors will look at Dell and believe theyunderstand what we're doing, believe that we're simply selling computers over the phone, and theyrelish in this very simplistic explanation. They failed to go to the U.S. Patent and Trademark Office andnotice that we were filing patents. They failed to see that we were hiring PhDs. They failed to see thatwe were developing products that were winning awards and that we were winning customer satisfaction awards. And what they thought was a niche all of a sudden became the entire market.

they're not teachingthem yet because we're still inventing them. The cases that you're reading are perhaps five to ten years old; not ten minutes old.

we like to anticipate anything that can go wrong and think
about how we could prevent it.

I feel very fortunate to have been born in the country I was born in

MICHAEL DELL: If you tried to start a business in the same area that we're in that's going to be prettyhard because it's already a well-established area. But if you really want to have some success, youshould look for something that nobody else has done before and where there's a breakthrough whereyou can do something significantly better than what exists today.I think that true successes don't come from doing something somebody else has done, but rathersomething neat or different or special and sometimes those can be done without a lot of capital.