Dell Back At The Top At Dell

from the return-of-the-founder dept

Wed, Jan 31st 2007 2:44pm — Joseph Weisenthal

After the close of the stock market today, computer maker Dell announced that it was giving the boot to CEO Kevin Rollins and replacing him with founder and current chairman Michael Dell. The move really comes as no surprise to anyone who's been following the company in recent years, as it's obviously been heading in the wrong direction. During Rollins' time at the top, the company let its reputation for quality deteriorate, a problem that was exacerbated by poor customer service. This translated into lost sales at the company, allowing HP to claim the lead as the world's biggest computer maker, something that would have been unthinkable just a few years ago. The company also suffered because it failed to respond to changes in its industry. As laptop sales started to eclipse desktop sales, the computer started moving away from the commoditized boxes that Dell was so adept at selling. This is something that its rival HP seemed to understand a little better, as it focused more on the fashion element. Furthermore, because consumers pay more attention to the look and feel of laptops than they do desktops, the company's once-vaunted direct sales strategy started to be a problem, since it doesn't offer a chance to see the product before buying it. As for the company's future, it's not clear what Michael Dell is going to do to turn the ship around, but it does seem pretty clear that something needed to change.

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9 Comments

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haywood, 31 Jan 2007 @ 3:33pm

Back in the day.....
When I used to scrounge the computer swap meets for parts, Dell peripherals were about as good as it got. I remember the joy of finding a good used Dell monitor or keyboard. Often I would bring my finds home and have vultures lurking and never even get to use them as someone would give me more than I spent, and money is money.
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dorpus, 31 Jan 2007 @ 4:13pm

What about Gateway?
I remember in Berkeley in 2003, they opened a retail store. Thing was, the store clerks insisted on following you throughout the store at all times, because they were "required". They said there was a "3-item minimum" on purchases. They also said I have to sign my name in a book if I want to buy something. All their merchandise was twice the market rate too. So I dropped my merchandise on their register and left. Six months later, the store went out of business.
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Solo, 31 Jan 2007 @ 4:27pm

"it's not clear what Michael Dell is going to do to turn the ship around"

Probably something like:
- build products that people want to buy. Extend the kiosk initiative to more malls across america.
- improve customer service by employing more of the qualified tech. And less of the "another country, you know which one I mean" script reader that do not understand you and have absolutely no clue what a computer looks like.
- Even more commercials on TV and ads in the paper.
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yomama, 31 Jan 2007 @ 5:02pm

what solo just said in post #3.

I stopped following dell a while ago, i had no idea the founder had stepped down. Its ironic though that when they came out i was a huge supporter, then over the last 5 years i cringe when someone mentions dell. course, i'm not a big fan of any of the big players...i generally put my own rigs together
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Anon, 31 Jan 2007 @ 6:14pm

Gee
Is anybody else reminded of somebody else that found themselves sinking when the founder stepped down? Their once solid reputation for quality products and service forever tarnished? Is anyone else reminded of ... Gateway?

I just hope its not too late for Dell to turn it around. Once you ruin the public's trust, its exceedingly difficult to get it back. I know people who *still* won't buy Gateway because of the service they got back in '96. Most people don't realize that the company has changed, and this could happen to Dell.... not everybody keeps up with the tech news. ;)
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Duhhh, 31 Jan 2007 @ 6:17pm

You have cringed for 5 years? Anyone else notice that coincides with Kevin's tenure as CEO?
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Bill, 31 Jan 2007 @ 7:14pm

Dell deals himself in
For many years Michael Dell has been awarding himself massive options grants and then dumping the stock like he can't get rid of it fast enough. He is still selling millions of shares. Maybe he could show a little faith in the company and himself and start buying it back.
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DF, 31 Jan 2007 @ 9:36pm

Ugly Laptops but Specs & Prices Still On Top
Spot on with your description of laptop trends hitting Dell. I recently bought a new laptop and returned two before I found one I liked. After initially being drawn to stylish designs from HP and Gateway I eventually returned one from each and settled on an ugly Dell latitude. Although the design looks about 4 years old, that aside I'm still quite happy with it. In my case the decision ended up being purely on tech specs, price and that little eraser head mouse :)
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rahrens (profile), 1 Feb 2007 @ 4:55am

dumping founders
Yeah, that scenario sounds familiar. Apple did that, too. Dumped Jobs and didn't get back on the road to recovery till they took him back on board.

Seems like a lot of that going around...
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