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September 24, 2008

We can’t manage economy: Michael Dell

Michael Dell, founder and CEO of Dell, said that he is quietly confident about the company’s chances despite the current unstable state of the world’s economy.

By Steve Evans

“We know that in many parts of our business the outlook is quickly reflected in capital spending and we’ve provided that input to the financial community,” Dell said. “Our job is not to manage those things, because we can’t manage them.”

Speaking at a press event in London, Michael Dell said that the firm should remain in a strong position — despite the economy — if it can stick to the business model that has served it well since his return to the company.

The company’s approach to the current economic climate seems to suggest it is business as usual: “We are very focused on the things we can manage, such as great products, great service, let’s take good care of our customers and let’s manage our own business in a very effective way,” he said.

Michael Dell said that the company came through a slow-down in 2001, and he is confident that the company will remain in a strong position this time. “In the first half of this year, we grew 50% faster than the industry,” he said. “A big question is what will the industry growth be in the second half? We don’t know. If things are a little slower, then we adjust our business appropriately and manage through it.”

Dell and EMEA president Dave Marmonti said that feedback from customers is one of the key ingredients to Dell’s success. Marmonti said: “Listening to customers is fundamentally what the company is built on. We have five million conversations a day through various channels.”

Feedback from users has been shaping Dell’s designs over the last few years, Marmonti said. The company hopes this will help it compete with companies producing their own innovative technology, thanks to their ability to integrate operating system, applications and user interface (such as Apple or RIM).

“We’ve embraced social networking with our Idea Storm,” Marmonti said. “With our E-Series launch, we sat down with customers throughout the product development cycle and got a lot of feedback from them in terms of design, the technology we use and the whole approach to it.”

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Dell said that a distinction needs to be made between the corporate and consumer markets. “Gadgets tend to be a consumer term. But if you look at our consumer business, over the last two quarters it’s grown 50%. In the last quarter we gained more share in the US than any company, including Apple,” Michael Dell said.

But he did admit that innovative design is becoming a key buying decision in the corporate space. He said: “Style is becoming much more important. We will launch a refresh of the OptiPlex desktop at the end of October and new Precision desktops. With the launch of the Latitude E-Series, we feel we’ve stepped it up quite a bit and reaction has been positive.”

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