Michael Saul Dell is an American businessman, investor, philanthropist, and author also known as the founder and CEO of Dell Technologies, one of the world’s largest technology infrastructure companies that develops, sells, repairs, and supports computers and related products and services.
Early life and education
Michael Dell was born on the 23rd of February 1965, in Houston, Texas. Michael’s father is Alexander Dell, an orthodontist, and mother, Lorraine Charlotte (née Langfan), a stockbroker.
At the age of eight, Michael applied to take a high school equivalency exam, in a bid to enter business early. In his early teens, Michael spent his earnings from part-time jobs in stocks and precious metals. Michael attended Memorial High School in Houston, selling subscriptions to the Houston Post in the summer.
Dell’s history
While attending at the University of Texas, Michael established Dell Computer Corporation in 1984, which at the time did business as PC’s Limited. The dorm-room headquartered company marketed IBM PC-compatible computers assembled from stock components. Michael dropped out of school after getting $1,000 in expansion-capital from his family to concentrate full-time on his fledgling business. In 1985, the company created the first computer of its design, the Turbo PC, which marketed for $795. PC’s Limited promoted its systems in national computer magazines for sale straight to consumers and custom assembled each ordered unit according to a variety of choices. The company earned more than $73 million in its first year of operation.
In 1986, Michael took in Lee Walker, a 51-year-old venture capitalist, as president and COO, to serve as Dell’s mentor and execute Dell’s ideas for developing the company. Walker was also effective in selecting members to the board of directors when the company went public in 1988. Due to health issues, Walker retired in 1990; and Michael picked Morton Meyerson, a former president and CEO of Electronic Data Systems to transform the company from a fast-growing medium-sized firm into a billion-dollar enterprise.
Dell released the PC’s Limited name in 1987 to become Dell Computer Corporation and started increasing globally. In June 1988, Dell’s market capitalization flourished from $30 million to $80 million from its initial public offering on June 22 of 3.5 million shares at $8.50 a share. In 1992, Fortune magazine included the company in its list of the world’s 500 largest companies, making Michael, at the age of 27, the youngest CEO of a Fortune 500 company ever.
In 1993, the company considered selling PCs at big-box retail outlets to match its own direct sales channel, such as Wal-Mart, which would have caused in an additional $125 million in annual revenue. Bain consultant Kevin Rollins convinced Michael to pull out of these deals, trusting they would be money losers in the long run. Margins at retail were slim at best, and in 1994, Dell left the reseller channel. Rollins would soon follow Dell full-time and finally become the company President and CEO.
Basically, the company did not highlight the customer market, due to the soaring costs and unacceptably low-profit margins in marketing to households and individuals; this improved when the company’s Internet site took off in 1996 and 1997. While the industry’s regular selling amount to individuals was going down, Dell’s was going up, as second- and third-time computer buyers who desired dominant computers with numerous features and did not require much technical support were selecting Dell. Dell saw an opening among PC-savvy individuals who liked customizing their PC to their means, the comfort of buying direct and having it delivered in days. In early 1997, Dell designed an internal sales and marketing group devoted to assisting the home market and launched a product line intended especially for individual users.
From 1997 to 2004, Dell held constant growth and grew market share from competitors even during industry slumps. During the same period, competing PC vendors such as Packard Bell, Compaq, IBM, Gateway, and AST Research struggled and finally left the market or were bought out. Dell exceeded Compaq to grow to be the largest PC manufacturer in 1999. Operating expenses made up only 10 percent of Dell’s $35 billion in profits in 2002, compared with 25 percent at Gateway, 21 percent of revenue at Hewlett-Packard, and 46 percent at Cisco. In 2002, when Compaq fused with the fourth-place PC maker Hewlett Packard, the newly combined Hewlett Packard acquired the top spot but struggled; and Dell soon reclaimed its lead. Dell developed the fastest in the early 2000s.
According to Consumer Reports, Dell reached and sustained the top rating in customer service/technical support and PC reliability, year after year, during the mid-to-late ’90s through 2001 right before Windows XP was announced. In 1996, through its website, Dell started selling computers.
In the mid-1990s, Dell developed further than laptops and desktop computers by selling servers, starting with low-end servers. At the time, the main three providers of servers were IBM, Compaq, and Hewlett Packard, many of which were established on proprietary technology, such as IBM’s various exclusive versions of the Unix operating system or Power4 microprocessors. Dell’s PowerEdge servers did not engage a foremost investment in proprietary technologies, as they ran Microsoft Windows NT on Intel chips, and could be made economical than its competitors. Consequently, Dell’s enterprise profits, almost nonexistent in 1994, accounted for 13 percent of the company’s whole consumption by 1998. Three years later, Dell succeeded Compaq as the top provider of Intel-based servers, with 31 percent of the market. Dell’s first acquisition happened in 1999 with the purchase of ConvergeNet Technologies for $332 million, after Dell had unsuccessfully developed an enterprise storage system in-house; ConvergeNet’s elegant but complicated technology did not equip it with Dell’s commodity-producer business model, making Dell write down the total value of the acquisition.
In 2002, the company expanded its product line to include televisions, digital audio players, handhelds, and printers. Michael had frequently blocked Kevin Rollins’ effort to lessen the company’s heavy dependence on PCs, which Rollins wanted to resolve by getting EMC Corporation. In 2003, the company was rebranded as Dell Inc. to credit the company’s development beyond computers.
Michael resigned as CEO while keeping the position as Chairman in 2004, passing to Kevin Rollins the CEO title, who had been President and COO since 2001. Despite no longer holding the CEO title, Michael fundamentally acted as a de facto co-CEO with Rollins. On January 31, 2007, Dell resumed as CEO at the appeal of the board, succeeding Rollins.
In 2013, with the help of Silver Lake Partners, Microsoft, and a consortium of lenders, Michael, took Dell Inc. private. The deal was reportedly worth $25 billion and met adversities during its execution. Outstanding resistance came from Carl Icahn, but after several months he stepped aside. Michael Dell obtained a 75% stake in the private company.
On October 12, 2015, Dell Inc. publicized its objective to obtain the enterprise software and storage company EMC Corporation. At $67 billion, it has been branded the highest-valued tech acquisition in history. The acquisition was finalized on September 7, 2016.
Net Worth
Michael Dell has a net worth approximately $41.3 billion as of May 2019, and ranked 39th as the World’s richest person by Forbes.