Business Blog: Hoover’s Business Insight Zone

Today’s Company of the Day is Dell Inc.

~~~

By now Michael Dell’s meteoric rise in business is the stuff of legend: the early displays of entrepreneurial savvy, the PC-building operation set up in his dorm room, dropping out of the University of Texas to build his company, … and the eventual ascent of Dell Inc. as the world’s #1 maker of computers. Living here in Austin, we see the hallmarks of Dell’s success all over the place. The philanthropy of “Dellionaires” has transformed the city’s arts scene, you take in the games of the AAA Round Rock Express at the Dell Diamond, and everyone knows someone who works for Dell.

This kind of exposure also means that Austinites have heard plenty about Dell’s downside: intense pressure to perform, constant emphasis on hitting numbers, and the other human downsides of the company’s relentless focus on performance. The story of the company’s (relative) decline over the past couple of years has been similarly pervasive. We know all about Dell’s bad customer service reputation, its flaming laptop batteries, the accounting irregularities and financial restatements, and the return of Michael Dell to the CEO role after the departure of Kevin Rollins. Worst of all for the company was that this string of bad news came while the company’s prime rival, Hewlett-Packard, got its act together to reverse the tide of its previous market share losses.

Still, some perspective is in order: after all of its troubles, Dell still pulls in more than $50 billion in annual revenues, and it makes billions of dollars in profit every year. As bad as things have gone for the company in the past couple of years, it remains profitable across many lines of business, and the organization still has lots of talented people in it. As for the talent at the head of the org chart, Mr. Dell himself is still just 42 years old — so there’s still plenty of time for a second act, for both the man and his company.

~~~