Today, Dell is one of the largest companies in the PC industry and one of the largest providers of cloud services around the world. This distinction from the American company was behind its founder Michael Dell, who decided to leave his studies of medicine in order to create his own company, which was once the best seller of computers, surpassing all competitors.
Today in our new article from the series The Most Powerful Technologists, we will review with you Michael Dell’s journey and his rise from a mere worker in a Chinese restaurant to one of the 30 richest people of all time.
Michael Dell was born on February 1965 in Houston, Texas, USA. Dell made his educational career like any kid in the American city, but decided to start his career early, specifically at the age of twelve, where he decided to work as a dishwasher in a Chinese restaurant in order to save money for his identity at the time, which was collecting stamps before being promoted to a waiter in the same restaurant.
His previous job was not his gateway to the world of technology, but his first steps when he worked as a salesman for Houston Post newspaper subscriptions, and in one year he managed to make $ 18,000. In parallel, Dell got in the same period the first computer, which was the Apple II. Michael’s passion was not to use the device but more money to see how it works as he completely disassembled and reassembled it to reach his former purpose.
Michael’s parents wanted their son to be a doctor. The boy did not want to deviate from their desires and enrolled in pre-medical studies at the University of Texas in 1983, at the age of eighteen. During his first year at the University of Texas, Michael noticed that companies selling desktop computers do not communicate directly with the general users, but rather a number of offices or intermediary companies are often involved.
Dell decided to break this cycle and to assemble the desktop computers himself and sell them to his colleagues at the university. Dell started this project with a capital of only $1,000, relying on selling devices, and as we mentioned to his colleagues, but he quickly got customers from outside his circle of acquaintances, achieving in its first-year profits estimated at about 200 thousand dollars.
This resounding success prompted Dell to abandon his medical studies and turn to his new investment activity at the age of 19 to found his company PC’s Limited.
PC’s Limited started its activity with its Turbo PC, which was sold directly to users at a price of $795. Buyers of the company’s devices were also allowed to customize the device according to their desire based on a set of available options. At this point, the company relied on promoting its hardware by advertising in computer magazines in the United States.
PC’s Limited made more than $73 million in its first year, but this large number for a startup at this time was not limited to its sales to individuals, but the company sought to obtain the rights to supply its devices to some institutions in Texas, which succeeded in a way that surprised everyone.
PC’s Limited has relied on its founder’s policy for many years to offer powerful hardware at cheap prices based on direct communication with the buyer, which has enabled it to capture a large share of the American market.
In 1987, the founder of the company decided to change its name and transform it into Dell Computer Corporation, to begin the company’s journey towards the world, transforming it after less than a year from a private company to a company listed on the American Stock Exchange, offering 3.5 million shares at an initial price of $8.5 per share. Four years later, Fortune magazine ranked Dell as one of the world’s 500 largest companies, with Michael Dell the youngest CEO of a company on this list.
Dell’s journey was not in the right direction during the first twenty years of its founding. After only 10 years, the company made one of the mistakes that affected it for many years. In 1993 Dell decided to sell its devices through supermarkets such as Wal-Mart to make more profits as expected, but after only one year the company decided to exit this market and focus on its old policy because of the slight profit margin that it was earning from this process. The company didn’t pay for the move once it was taken but it affected it a few years later.
Dell launched its hardware website in 1996, ushering in one of the best periods ever in the company’s history. The American company offered its desktop and laptop devices at competitive prices that enabled it to rise to the top of computer vendors, overtaking companies such as Compaq, IBM and HP in 1999. Three years after reaching the top, the cost of a single computer was only 10% of its price, while this percentage was in HP is up to 21%.
Dell Computer Corporation was not satisfied with the market of computers, but it headed in the same period in which it launched its website to sell servers, in which its success was no less than its success in the computing hardware market.
Michael Dell’s departure as CEO of the company ended in 2004 after changing the company’s name two years to Dell Inc so that the company’s reputation was not limited to computers, especially as it decided to move to other devices such as monitors. Michael Dell retained the position of company president and the CEO position passed to Kevin Rollins.
We can consider Michael Dell’s tenure as CEO of the company as the golden period in its history. The American company went through a difficult period after leaving this position. The major crisis facing the company was the decline in its sales and then its market value due to the saturation of the computer market of all kinds and the rise of HP and Acer, which caused the deterioration of Dell’s condition due to the control of its sales of laptops and desktops on more than 66% of its total sales.
Dell’s return to the position of CEO of his company in 2007 did not change much of the situation. The company was facing a difficult period that prompted it to lay off a large number of employees, close some headquarters and restructure the administrative system. These measures contributed to reducing the company’s deviation from its path, but in the end, it did not withstand the rising Chinese companies at the time, such as Lenovo, Asus and Acer, which provided cheaper devices due to the low-cost manufacturing process in China and its reliance on achieving a small profit margin. At the time, specifically at the beginning of the last decade, Dell ranked third among the world’s largest computer manufacturers.
After this period, Dell turned to new investments in the field of services and interested in the corporate sector more after it relied for years on its sales to individuals, especially since its attempts to enter the tablet market, which depended on the Android or Windows Mobile system, were not successful to adhere to its policy that it has always relied on in the first place. the first.
In 2013, Dell witnessed the most comprehensive change in its history, as its founder Michael Dell decided to transform the company from a publicly listed company to a private company after more than 20 years. The decision took several months for the board of directors to approve, and it also needed from 23 billion to 25 dollars. It is said that Michael needed Microsoft’s help to provide it to buy the company’s shares and turn it into a private company.
Two years after turning Dell Inc. into a company, Dell acquired EMC Inc., a company specializing in software, in a deal valued at about $69 billion, making it the most expensive technology deal in history. In 2016, the American company split into three major companies under the Dell Technologies umbrella: Dell EMC, VMware and Dell Users Inc.
After this long journey, Michael Dell is ranked twenty-seventh in the world among the world’s richest people, with a fortune estimated at about $27 billion.
