The year – 1997
The Date – October 6
The place – Orlando, FL
The event – Gartner Symposium and ITxpo97
The context – Apple was down in the dumps, its stock was trading at $22 and there were grave concerns over the company’s future. Dell was soaring, its build-to-order PC model was a big hit and the company’s founder and CEO Michael Dell was King of the PC business.
What happened
Someone at the Gartner Symposium asked Michael Dell what should be done with Apple?
Dell responded famously:
What would I do? I’d shut it down and give the money back to the shareholders.
I’m certain that not a day passes when Michael Dell wishes he’d not opened his big mouth and made the above remark!
Tables Turned
Fast forward to the present.
Michael Dell bristles when his personal-computer company is compared with Apple Inc.
As Apple gobbled market share with the iPhone and iPad, Dell Inc.’s chief executive instead faced crumbling PC market share and stagnant revenue growth at the company he founded in his University of Texas dorm room almost 30 years ago.
When conversations shifted to Apple, Mr. Dell’s body would tighten up and he would become withdrawn, said former Dell executives – Source: Wall Street Journal, February 4, 2013
Yes, today the business tables have turned.
Apple is soaring (the iPhone, iPad, iPod, iMac etc have captured the hearts, minds and, more importantly, wallets of hundreds of millions worldwide).
Dell is sinking (flat revenues over the last four years, stock price is in the gutter and its consumer products like phone and music player were disasters )
Now a desperate Michael Dell is taking his company private amid reports of falling profitability.
Moral of the Lesson
In business, as with everything in life, nothing is permanent.
Today’s success is no guarantee of tomorrow’s profits.
Nor today’s failure a predictor of tomorrow’s losses.
Steve Jobs returned to the leadership role at Apple and the rest is an extraordinary chapter in history.
Michael Dell stayed as CEO of Dell (except for a brief period from 2004-2007 when he was only Chairman) and the rest is depressing history.
Above all, inspiring leadership and the ability to read the market correctly is crucial to success in business.
Steve Jobs possessed both qualities in abundance in the 21st century.
Michael Dell has shown little evidence of both qualities in the last decade!
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Nice analysis.
I must add Dell products were never interesting at all.
They were very dull and uninspiring and it seemed like all they did was assemble the components and never really bothered to make them look nice or improve on the firmware to make it easier for admins.
I was unhappy when Sun lost out though, they made good products but too pricey.
SearchIndia.com Responds:
1. Dell has just gone private.
Source: NYT – http://dealbook.nytimes.com/2013/02/05/dell-sets-23-8-billion-deal-to-go-private
2. Solaris was a robust OS with a strong performance in the financial sector.
But Sun as a company lost its way long back. Ineffective leadership (Scott McNealy, Jonathan Schwartz etc), server commoditization and a strong challenge from Linux ultimately killed the company.
And Microsoft is trying to flush USD 2 Bn away.
SearchIndia.com Responds:
With $68 billion in the bank, Microsoft has lots of money to flush down the Dell toilet, Bing toilet, Surface tablet toilet, Windows phone toilet and the Steve Ballmer toilet. 😉
Windows Phone is good but it has come too late to make even a scratch on iPhone or Android phones. Lack of apps and Microsoft’s history will make sure that it stays insignificant. The phone itself is good…
Please wait for another 5 more years, my dear SI. It’s too early to be writing off any company. Every company goes through a rough phase and Dell is no stranger to it. In fact, I think they can easily revive the company, provided they understand that almost 80-90% of the world needs only a product, which is cheap, efficient, and can be used for daily computing….
As for Apple, I would like to wait 3 more years to see if they can really grow as they are doing now or whether they will start faltering like Microsoft did when Bill Gates stepped down…….
As much as I respect Apple, I think it is so overrated and too synonymous with its owner, Steve Jobs…. If they don’t strategize well in the future, they might easily lose the battle in the next 3 years.
After all, every new product has its honeymoon period. iPad and Ipod has been apple’s hottest products over the years, but I wouldn’t bet on them in the next few years as the general public gets too bored with products after a certain period. Let’s wait and watch..
SearchIndia.com Responds:
1. The problem with Dell was that their non-PC consumer initiatives were disasters or missing at a time when the world started moving toward non-PC style of computing like tablets, mobile phones and iPod touch like devices.
2. Michael Dell has never been a Steve Job kind of innovator or inspiring figure. It’s hard to metamorphize into a change agent when you’re nearing 50.
3. I fear that Dell can at best turn into a company like IBM that focuses primarily on software and services.
It’s going to be very hard, if not impossible, for Dell to regain its footing in the consumer space!
4. As for Apple, the flavor of the month is the watch cum computer cum TV.
Rumor has it that when the wearer feels horny they can even use the Apple watch for you-know-what. 😉
Here’s the New York Times piece on the Apple watch – http://bits.blogs.nytimes.com/2013/02/10/disruptions-apple-is-said-to-be-developing-a-curved-glass-smart-watch/?ref=business
5. Bottom line, don’t hold your breath for remarkable changes in Dell’s consumer space. I think the consumer train has already left the Dell station.
@SI – “Bottom line, don’t hold your breath for remarkable changes in Dell’s consumer space. I think the consumer train has already left the Dell station.”
As they always say, “It ain’t over till the fat lady sings”.
Right now, I can see the fat lady has arrived at Dell’s opera, let’s hope, at least for the sake of the Dell’s shareholders, that the fat lady never sings……. In this bleak economy, the last thing the US and rest of the world want is another company closing down…… As bad as a company maybe, it always provides jobs to a certain number of people. In this volatile market situation, I don’t want another 10,000 people fighting for jobs in an already cruel market. 🙁
SearchIndia.com Responds:
1. You write: let’s hope, at least for the sake of the Dell’s shareholders,
Sweetie, there won’t be Dell shareholders soon. The company is going private in the near future! http://news.cnet.com/8301-1001_3-57568663-92/dell-going-private-is-the-best-move-for-the-company/
2. In any case, who gives a rat’s ass if Dell goes bust….the overwhelming majority of the company’s workers are low-wage coolies in India and China!
They can eat grass for all I care! I’m more concerned about the impact on the U.S.
That said, the big, interesting question is can Dell be a mini-IBM, i.e. a software and services company.
The jury is still out on that pressing question.
And even if Dell succeeds in turning itself into a mini-IBM, I’m not going to be too pleased because the U.S. will not benefit much because Dell will embrace the IBM model of hiring the majority of new employees in low-wage nations like India and China!
Bottom line, whether Dell survives or goes bust it’s not going to a big deal for America!
“Bottom line, whether Dell survives or goes bust it’s not going to a big deal for America!”
Nope, it will make a difference. We call it the DOMINO effect. When one big name organization crashes, it sends ripples of fear and frustration in the market and ends up setting a negative trend, sometimes ending in companies indulging in unnecessary cost-cutting, downsizing, etc. Mostly, it effects the small companies in the industry.
SearchIndia.com Responds:
If Dell crashes, mostly Chinese and Indian suppliers and workers will be affected. Not worth shedding tears for!
No other ripples.
SI said:”If Dell crashes, mostly Chinese and Indian suppliers and workers will be affected. Not worth shedding tears for!
No other ripples.”
My my my, your love (hatred) for Indians goes to a new level every time. I can’t help but smile every time I read one such comment 🙂
Don’t take it personally… But I assume you were an Indian once upon a time and moved to the US for getting better opportunities and standard of living…. If what you did was justified, why do you hate people who do the same? If you say Indian IT folks shouldn’t migrate to their US, then shouldn’t you be first blaming yourself. After all, you have yourself said that you migrated to America with a Manja Pai ;)…. I am sure you didn’t go to the US with patriotic intentions like saving the country from Russia, becoming an activist like Martin Luther King, or a boxer like Joe Louis and Muhammed Ali…. You went there to make your life better… The same way many Indians are migrating to the US now.
So, how exactly are you different from the IT coolies? Is it their fault that your cheap MNCs decide to outsource stuff to earn billions of dollars>….. Especially all your darling iPads and iPods are manufactured in Asian countries, especially China…..
Shouldn’t you be more angry with your MNCs than blame people who work for a living….? Just my 2 cents…..
Searchindia.com Responds:
Obviously no one ever told you the Indian crab story – http://www.theindependentindia.com/2012/08/story-about-indian-crabs.html
I prefer the Indian crabs remain in their Indian boxes! 😉
SI said: “Obviously no one ever told you the Indian crab story – http://www.theindependentindia.com/2012/08/story-about-indian-crabs.html
I prefer the Indian crabs remain in their Indian boxes!”.
Yup, i prefer the same too.. Unfortunately, some Indian crabs do manage to move out of the box and start closing it the lid to ensure the other crabs remain locked inside, especially the crab that went to the US 😉