Michael Sainsbury | August 19, 2008
MICHAEL Dell is a picture of relaxation. Wearing shorts, he is sitting in Delhi's plush Oberoi Hotel having lunch with his kids. It's a pitstop en route to the Beijing Olympics.
Michael Dell launches a new line of laptops in New Delhi last week Picture: AP
Dell's decision to front the press in India, rather than elsewhere, underscores the wholesale changes he has wrought since returning, in January 2007, to once again run the company he founded, after acting only as its chairman for three years.
The effect was almost immediate, at least in the changes he made in the company's management. "When we re-evaluated our position, we said OK, we need to reboot the Dell operating system, so to speak, with an upgrade, Mr Dell said.
"There were things we needed to do around that, so we launched several initiatives: consumer enterprise, notebooks, small to medium business and, perhaps one of the most important, a new strategy for emerging countries. We assigned leadership teams and made investments."
In the first quarter of this year Dell's revenues increased 9 per cent to $US16 billion and its net income increased 12 per cent to $US784 million or US38c per share.
The company has long been criticised for its lack of innovation. For decades the old Henry Ford adage - you can have any colour car as long as its black - applied to Dell.
The group sold functional but determinedly unglamorous computers. Plain and workmanlike, their selling point was price and efficiency.
The Dell business model was direct selling, cutting out the expensive middle man, allowing end users to customise their machines. It was anathema to much of an industry obsessed with "the channel".
To businesses that knew what they wanted, it was a dream, bypassing smooth-talking computer sales people to order directly from the company itself, specifying what they wanted inside their boxes. It worked not just in the personal computer market, but in the lucrative server sector - the large computers that serve up email, business applications and internet access to thousands of networked employees. That was then.
"We have a history of being a growth company," Dell says.
"We are doing things very, very different, and have increased our commitment to product innovation and thought leadership, and we have enhanced that with some acquisitions. You are seeing a new Dell emerging here."
It's a Dell that makes coloured laptops, sells its product in retail stores and has launched a Linux-based challenge to Microsoft via a new system on its latest computers that allows users to get email and surf the web without booting up the increasingly cumbersome Windows operating system.
There has been a sea change in the world of computers in the past five years. Two things happened simultaneously: the global laptop market has exploded as machines have become cheaper and lighter. Suddenly many people are eschewing bulky desktops and swapping them for laptop or mobile computing.
The marketers have all the buzzwords, but once again computers are sexy. Maybe it was one of the best things to happen to the company, that Dell did step away for a few years to get a fresh perspective on its operations, company insiders say.
Dell now has its products in 13,000 outlets around the world and will add more channels to its network, but Michael Dell says the direct model still gives the company vital feedback from customers about what they want.
"If you look at our competitive advantage, one thing that has not changed over this entire period is that Dell learns a tremendous amount from the direct relationships with our customers and the conversations we have," Mr Dell said.
"Now we have turbocharged that with the internet and blogs and wikis. We have 2 billion conversations a year and that inspires us, and we are using all that new information to verify our position and using that information to expand."
So is Mr Dell about to hand his baby to someone else?
"I was the chief executive for the first 20 years. I am still a relatively young guy, so I will keep doing this for a while. I am 43 years old," he said.
"We make more revenue from our computer product than our nearest competitor. So we are selling more valuable computers.
"During the past 10 years our company has grown its shipping volumes by about 10 times. There is really no other company in the industry that has done that. It is also true that there was period when our growth slowed down at the end of that."
While Dell is sweeping all before it in the business market - it leads in PCs and supplies 40 per cent of the business server market around the world, it still has some work to do in the consumer market.
Michael Dell refused to be drawn on the company's plans in the sector.
"Today is all about the business market," he said.
Dell insiders say, however, that the launch of the new enterprise laptops is just the first in a flurry of new product launches expected in coming months.
Now Dell has dipped its toe in the water with coloured laptops, next up will be a netbook mini-computer, which will have a price tag of about $700.
Michael Sainsbury travelled to India as a guest of Dell