The History of Dell
Long before focus groups determined that the best way to sell a computer was with a 28 year old man playing a teenager who spouted, "Dude, you're gettin' a Dell!" there was a young man who actually was a teenager, just 19 years old, named Michael Dell who, in 1984, with just $1,000, started one of the largest computer manufacturing companies in the business.
At the time, a student at the University of Texas at Austin, Michael Dell founded his company from his dormitory room in the off campus housing of Dobie Center. His company was initially called PCs Limited, though this would eventually change to reflect his own last name as we know it now.
Even at their conception, Dell was customer oriented. Michael's belief that by selling directly to consumers, he could offer a better service model than that of his competitors is still somewhat in effect to this day. Michael did not continue his venture on his own, however, and he received roughly $300,000 in expansion capitol from his own family to subsidize his venture. With a strong focus on getting his company going, Michael dropped out of school and focused solely on his business.
By 1985, Dell produced its first computer. Selling for only $795, Dell's, "Turbo PC," was fueled by the Intel 8088-compatible processor that operated at the speed of 8 MHz. Dell advertised the model in a series of national computer magazines and, in a predecessor to Dell's current business model, allowed customers to choose a variety of options which then allowed Dell to custom build PCs for their customers. Needless to say, the idea was a hit. Dell grossed more than 73 million dollars within its first year.
By 1988, PCs Limited had changed its name to, "Dell Computer Corporation," and had expanded overseas to Ireland. Within four years, eleven more international setups were operational. With the help of international sales, Dell's market capitol grew from $30 million to $80 million.
At the break into the 1990's, Dell fiddled with its business model and tried its hand at selling through warehouse clubs and computer stores, but was met with little success, and they quickly reverted focus to their original company design. It was in 1992 that Dell, after just eight years in business, appeared on the Fortune 500 list. This event made Michael Dell the youngest CEO to ever make it on the list at the time.
With the internet boom, Dell was quick to follow and started selling online in 1996. They expanded their product scope in 2002 with televisions, handheld devices, and digital audio players called the Dell DJ, though, like all other audio players, the DJ was shadowed and destroyed by Apple's iPod.
A small tweak to the name came in 2003 with, "Dell Inc.," as a head nod to the company's expansion to electronics other than computers. Dell's first major purchase was of Alienware in 2006, a company that used AMD chips in some of its systems. This fueled a shift in many of Dell's systems away from their usual Intel chips to the less expensive AMD ones.
Controversy came in 2005 when Dell was subpoenaed for failing to submit financial documents dating back to 2002. It was later uncovered that Dell employees had fudged corporate account balances to meet financial goals during their rough patch under short lived CEO Kevin Rollins. In 2007, Dell released a report showing yearly earnings down 5% and a net income down 33%. It was tough times for Dell.
Dell has since recovered somewhat and has gone through various acquisitions, factory shutdowns, new product introductions, and, of course, semi-alternative marketing campaigns. Standing on shaky ground in an unsure economy and, as always, rapidly changing electronics marketplace, the future is uncertain for Dell, but the one thing that is for sure is that Dell and its subsidiaries will remain a major player in the computing industry for at least a few years to come.