Can Michael Dell do it again?
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