History Behind Dell Technologies The Computer Company – Michael Dell Founder

Dell Logo

Dell is another popular computer company that has been around for a while now. Let’s do some digging and see what history tells us.

 

History Behind Dell Technologies The Computer Company – Michael Dell Founder

 

When Was Dell Founded

 

When Was Dell Founded
When Was Dell Founded

Dell was founded on Feb 1, 1984. By a man who goes by the name of Michael Dell at the young age of 19.

With $1,000 in capital from his family. He founded PC’s Limited (Dell’s Name Before You Knew It As Dell) a seller of IBM PC compatible computers while attending as a student at the University Of Texas in Austin and operated the company from his dorm room.

In July 1985, the company produced the first computer of its own design, the 10-megabyte Turbo PC, which sold for $795, undercutting IBM.

After a successful article in PC Week, the company was soon selling 1,000 machines per month.

Michael_Dell_2010
Michael Dell

Michael Dell appeared in PC’s Limited advertisements in national magazines, asking readers to “give us a chance to show you what its products can do”. Dell’s family went on to lend him $500,000 to fund the growth of the company, but the loans were repaid by 1986. Late 1986, the company began operations from an 82,000 square foot factory in North Austin. Michael

Making Deals
Making Deals

In 1986, Michael Dell hired Lee Walker, a 44-year old retired investment banker, and venture capitalist, as president and chief operating officer, to serve as a mentor and to implement Dell’s ideas for growing the company. Walker would soon reorganize the management staff, this was key to the company securing its very first line of credit from a bank the amount was $10 million, this was also instrumental in recruiting members to the board of directors when the company went public in 1988 such as George Kozmetsky and Bobby Ray Inman.

Walker retired in 1990 due to ill health, and Michael Dell hired Morton Meyerson, former CEO and president of Electronic Data Systems to transform the company from a fast growing medium sized firm into a billion-dollar enterprise.

Dell Computer
Dell Computer

By early 1987, Dell’s factory was producing 7,000 computers per month. Each built to fit the buyer for the best user experience. The 1987 year was a good one indeed for the company bringing in over $70 million in annual sales and $2.1 million in net income. Dell offered major journalist computer magazines the opportunity to test its products, which in return gave the brand more good publicity when articles were written in these publications.

Dell was also known for its excellent customer service, with 90% of complaints resolved in a single phone call. In early 1987, Dell began offering a computer service/repair plan by Honeywell for $35 per year. Dell raised capital in a private placement in 1987.

Stock Numbers
Stock Numbers

In 1988 the company changed its name from PC’s Limited to Dell Computer Corporation. In June 1988, Dell raised $30 million of new capital, issuing 3.5 million shares at $8.50 each, becoming a public company via initial public offering.

In 1989 the company introduced its first laptop computer, the 316LT. In 1990, the company opened a manufacturing facility in Limerick, Ireland to serve clients in Africa, Europe, and the Middle East.

Fortune_magazine,_December_15,_2016_issue
Fortune_magazine,_December_15,_2016_issue

In 1992 Fortune magazine included Dell Computer Corporation in its list of the world’s 500 largest companies, making Michael Dell, at 27 years of age the youngest CEO of a fortune 500 company ever.

By 1993 the company had around 5,000 employees.

Dell originally had its headquarters at 9505 Arboretum Blvd. In the Arboretum complex in northern Austin Texas. In 1996 the company moved its headquarters to Round Rock, Texas.

Dell Logo
Dell Logo

From around 1997 to 2004, Dell enjoyed steady growth and it gained market share from competitors even during industry slumps. During the same period, rival PC vendors such as Compaq, Gateway, Inc, IBM, Aptiva, Packard Bell and AST Research struggled and eventually left the market or was bought out.

The company attained and maintained the #1 rating in PC reliability and customer service/technical support, according to Consumer Reports, year after year during the mid to late 90s through 2001.

Dell surpassed Compaq to become the largest PC manufacturer in 1999, with 16% market share. Operating costs made up only 10% of Dell’s $35 billion in revenue in 2002, compared with 21% of revenue at Hewlett-Packard, 25% at Gateway, and 46% at Cisco. In 2002, when Compaq merged with Hewlett Packard. The newly combined Hewlett Packard took the top spot but struggled to maintain it. Dell would soon retake the top spot the company grew the fastest in the early 2000s.

Dell Servers
Dell Servers

In the mid-1990s, Dell expanded beyond the desktop computers and laptops by selling servers, starting with low-end servers. The major three providers of these servers at the time was IBM, HP, and Compaq, many of which were based on proprietary technology, such as IBM’s Power4 microprocessors or various proprietary versions of the Unix operating system.

Dell’s new PowerEdge servers did not require a major investment in proprietary technologies, as they ran Microsoft Windows NT on Intel chips and could be built a lot cheaper than their competitor’s products.

10 Millionth Computer Sold By Dell
10 Millionth Computer Sold By Dell

Dell opened plants in Penang, Malaysia in 1995 and 2002, and in Xiamen, China in 1999. These facilities serve as the Asian market and assemble 95% of Dell notebooks. In 1997, the company opened its second manufacturing facility in Texas and shipped its 10 millionth computer.

In May 1999, Dell opened a 260,000 square foot manufacturing facility in Lebanon, Tennessee.

Limerick, Ireland
Limerick, Ireland

Dell’s first European manufacturing facility opened in 1990 in the Raheen Industrial Estate near Limerick, Ireland. The plant was expanded in 1996 and again in 1999 with a $90 million expansion that brought the total workforce there to 5,800 people.

By 2000, Dell.com the website was generating $40 million in sales per day and Dell’s sales reached $25 billion per year. Rollins became President and COO in 2001.

Dell moved its corporate headquarters and executive offices to the Las Cimas office complex in Travis County, Texas, between Austin and West Lake Hills. The company leased 80,000 square feet there, but in early 2002, the company announced that it would move its headquarters back to Round Rock and would sublease its offices in Las Cimas. The subleases were completed in May 2003.

In 2002, Dell expanded their product line to include the following

  • Televisions
  • Handhelds
  • Digital Audio Players
  • Printers

Chairman and CEO Michael Dell had repeatedly blocked President and COO Kevin Rollins‘s attempt to lessen the company’s heavy dependence on PCs, which Rollins wanted to fix by acquiring EMC Corporation. In 2002, Dell started the Dell Direct Store model, opening kiosks in malls and airports in the United States to allow customers to examine products before buying them directly from the company, eventually opening around 140 kiosks.

 

In 2003, the company changed its name from Dell Computer Corporation to Dell Inc. to recognize the company’s expansion beyond computers.

Kevin B. Rollins
Kevin B. Rollins

In 2004, Michael Dell resigned as CEO while retaining the position of Chairman, handing the CEO title to Kevin Rollins, who had been President and COO since 2001. Despite no longer holding the CEO title, Dell essentially acted as a facto co-CEO with Rollins.

In December 2004, Dell announced that it would build a 750,000 square foot assembly-plant near Winston-Salem, North Carolina the city and county provided Dell with $37.2 million in incentive packages; the state provided approximately $250 million in incentives and tax breaks. The facility opened in October 2005 after much-needed controversy due to the government subsidies.

Alienware Headquarters
Alienware Headquarters

Under Rollins, Dell began to loosen its ties to Microsoft and Intel. In March 2006, Dell acquired Alienware, which introduced several new items to Dell products, including processors by Advanced Micro Devices. To prevent cross-market products, Dell continues to run Alienware as a separate entity, but still a wholly owned subsidiary.

In 2005, Dell came under investigation by the U.S. Securities and Exchange Commission for its revenue recognition practices. Jim Schneider retired as CFO and was replaced by Donald Carty in January 2007.

2005 Dell’s sales growth slowed. At its low point in 2006, the stock price had declined 40% in a year. This led to management changes.

 

Rollins Resigns From Dell As President And CEO

Rollins Resigns From Dell As President And CEO
Rollins Resigns From Dell As President And CEO

On January 31, 2007, After 4 of 5 quarterly earnings reports were below expectations, Rollins resigned as President and CEO, receiving a $5 million severance package, and founder Michael Dell assumed the role of CEO again.

Dell EMC
Dell EMC

On Septemeber 7, 2016, Dell completed its acquisition of EMC; post-acquisition, Dell was re-organized with a new parent company, Dell Technologies; Dell’s consumer and workstation businesses are internally referred to as the Dell Client Solutions Group, and is one of the company’s three main business divisions alongside Dell EMC and VMWare.

 

Where Is Dell’s Headquarters Located

Dell Headquarters Round Rock, Texas
Dell Headquarters Round Rock, Texas

It is located in Round Rock, Texas, United States

 

How Many Employees Does Dell Have

This number may be different now. But in 2016 they had around 101,800.

Yea I’m sure this number has changed now for the good or worse has yet to be seen.

 

Who Are Dell’s Direct Competitors

  • HP (Hewlett-Packard)
  • Acer
  • Fujitsu
  • Toshiba
  • Sony
  • Asus
  • Lenovo
  • IBM
  • MSI
  • Panasonic
  • Samsung
  • Apple

Conclusion

Well, here you go some good eating so to speak for your hungry historical computer craving spirit. I wrote a good bit of information. I could’ve added more but I added what I felt was necessary. Feel free to leave a comment and share this article with a friend. Thanks for reading.

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16 comments

  1. mercy Reply

    This is one article that I have read line by line because its so captivating and you have written it in a way I felt I wanted to keep reading, Thank you for giving us a great history of Dell, Keep doing it!

  2. Curtis Henderson Reply

    Really informative and interesting article. Being a Systems Integration Engineer for the last 35+ years, I have dealt with many computer manufacturers. I appreciated the in-depth review.
    Great job!

    • Tyler Post authorReply

      Thank you for your comment and wow 35+ years is some serious labor. I bet you can shapeshift a laptop with your mind.

  3. Hammer11B Reply

    Wow, information overload. That’s a good thing though. I had no idea Dell had been through so much on its rise to power. Thank you for your very informative post. I look forward to reading more.

    • Tyler Post authorReply

      Thanks for the comment. The post could’ve been a lot longer. But I think I got the message across pretty well with this length.

  4. Jeff Reply

    Wow, what an in-depth and complete history. I had no idea Dell has been around that long. Great post! Keep it coming, I’m thirsty for more

  5. John Reply

    What a brilliant post. I am always interested in the journey of successful entrepreneurs and Michael Dell is certainly one. One of the statistics I found so interesting was ” their website was generating $40 million in sales per day “

    • Tyler Post authorReply

      Yea talking about bringing home the bacon. I bet that must have been one of the most undescribable feelings ever.

  6. Jeremy Reply

    Awesome informative article about Dell, it is always cool to hear the success stories of successful entrepreneurs. Keep on writing articles as awesome as this!

  7. William Newsome Reply

    Another inspiring story of how a person was able to create a successful company from the ground up. What’s more interesting is how profits were down when Dell resigned as CEO and started to pick back up when he returned. Great article

    • Tyler Post authorReply

      It is very remarkable indeed. I can only imagine what it felt like making that kind of money that young on basically auto-pilot.

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