Pri­vate lives

Can Michael Dell do it again?

The Australian - The Deal - - Front Page - Story by: Glenda Kor­po­raal

Su­san and Michael Dell, right, dur­ing a ‘fire­side chat’ about their work to help chil­dren trapped in ur­ban poverty

THE Austin City Lim­its theatre is filled with an­tic­i­pa­tion. More than 200 at­ten­dees at the an­nual Dell Women’s En­tre­pre­neur Net­work con­fer­ence in the Texas cap­i­tal are await­ing the ar­rival of Dell’s founder Michael Dell and his wife Su­san. The event has been billed as the first “fire­side chat” by the high-pow­ered cou­ple, who live near the city, to talk about the fam­ily foun­da­tion they set up in 1999 to help chil­dren in ur­ban poverty in the United States, In­dia and South Africa.

When the MC thanks them for com­ing, Su­san Dell, tall and fit­look­ing in a smart black dress, lets some­thing slip. At least, she says, it gives her a chance to spend time with her hus­band. As the ques­tion and an­swer ses­sion continues, Su­san does most of the talk­ing about the foun­da­tion. Her worka­holic hus­band is also pas­sion­ate about it but is very much fo­cused on the busi­ness he set up sell­ing com­put­ers from his dorm at the Univer­sity of Texas 30 years ago. It now turns over about $US57 bil­lion a year with a net in­come of $US2.4bn.

One of the world’s rich­est men, at 49, Dell has been given a new lease of cor­po­rate life af­ter a year-long bat­tle to close a $US25bn deal to take his com­pany pri­vate. The au­di­ence is keen to hear from Dell, who has told as­so­ciates he is en­er­gised and ex­cited at be­ing in charge of his own des­tiny again, free from the glare of Wall Street and the in­ces­sant de­mands of an­a­lysts and quar­terly reporting. It’s a bold but risky move that in­volves tak­ing on an ex­tra $US15bn or so in debt, needed to buy out the pub­lic share­hold­ers with the sup­port of pri­vate eq­uity firm Sil­ver Lake.

Dell seems de­ter­mined to let his wife have the stage. But when he does speak, he re­veals some of the de­ter­mi­na­tion and en­tre­pre­neur­ial phi­los­o­phy that drove him to found one of the world’s largest com­puter businesses. “The ac­cep­tance of risk is a very im­por­tant part of the cul­ture of how you make things hap­pen,” he says. “What that ul­ti­mately means is that fail­ure is a way to learn. If all you do is suc­ceed, you don’t ac­tu­ally learn any­thing. You learn when you are mak­ing mis­takes. You don’t want to make the same mis­take over and over again. But, by mak­ing tiny ad­just­ments along the way, hope­fully the mis­takes are small enough that they are cor­rectible. And you are able to find your way to much, much greater suc­cess. “

Hous­ton-born Dell reg­is­tered a com­pany called PC’s Limited in Jan­uary 1984, sell­ing PCs and com­puter kits while study­ing medicine. He later re­named it the Dell Com­puter Cor­po­ra­tion, drop­ping out of univer­sity and set­ting up head­quar­ters in North Austin. In 1988 he listed the com­pany on the NAS­DAQ over-the­counter mar­ket. By 1992, the then 27-year-old be­came the youngest chief ex­ec­u­tive of a For­tune 500 com­pany when the busi­ness mag­a­zine be­gan in­clud­ing his com­pany in its global rank­ings.

In 2001 Dell by­passed Com­paq as the world’s largest PC maker. In March 2004 Dell stepped down as chief ex­ec­u­tive, re­main­ing as chair­man while the chief op­er­at­ing of­fi­cer Kevin Rollins was ap­pointed chief ex­ec­u­tive. But if Su­san Dell had been hop­ing her hus­band would slow down and spend more time with the fam­ily she would have been dis­ap­pointed. Three years later, in early 2007, Dell re­turned as chief ex­ec­u­tive of the com­pany at the re­quest of the board, suc­ceed­ing Rollins.

Dell threw him­self into the task of rein­vent­ing his com­pany which was now in a fiercely com­pet­i­tive mar­ket against IBM, Hewlett-Packard and China’s Len­ovo, which bought IBM’s PC busi­ness in 2005. The idea of tak­ing the com­pany pri­vate was hatched in mid-2012, leading to last year’s bruis­ing bat­tle. US bil­lion­aire in­vestor Carl Ichan pub­licly at­tacked Dell’s lead­er­ship of the com­pany while its 108,000 staff around the world wor­ried about their fu­ture. But that’s now be­hind Dell and the IT world is now watch­ing to see what pri­vate Dell will do.

Dell has been crit­i­cised for fo­cus­ing for too long on the PC at a time when the mar­ket has ex­panded into new prod­ucts such as tablets and smart­phones. Dell ar­gues that it is far too soon to write the obit­u­ary of the PC. While the to­tal PC mar­ket is not grow­ing, its ex­ec­u­tives ar­gue that Dell’s share of the busi­ness is still grow­ing. His strat­egy since 2007 has been to ex­pand the com­pany into other

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