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Dell CEO Tells All
zapatero writes "The San Francisco Chronicle has an enjoyable read with new Dell CEO Kevin Rollins. He has quite a critique of the HP acquisition of Compaq: 'They had a great, profitable printer business before. They still have a great, profitable printer business. ... Their profits are 70 to 80 percent from the printer business. So that's the area where the profit pool still lives. It's where it lived before. It's where it still is now. So I just ask, what's changed?'"
Conversely, you cannot say "I want all of the tax breaks and government s ubsidies of a company that is giving Americans jobs" while at the same time cherry-picking your labor pool from the cheapest of third-world labor.
If you want to be a "global company"? Fine. Then relinquish your cushy benefits you get for supporting American interests.
I'll tell you EXACTLY what HP got.
.... It's a shame too, I really liked Sun equipment, and *especially* Solaris. But 33mhz PCI buses on your high-end SF25k servers? Give me a break!
3 things:
1) The "legendary" DEC service & support models. Nothing -- and I mean NOTHING, not even IBM -- can compare. Nobody's support is like DEC's. Their support is SO good, it's absurd. I can really consider the dedicated support team I've got as an extension of my admin staff.
2) Two profitable businesses: Alpha/OpenVMS and NonStop (a/k/a Himalaya). As fashionable as it is to bash VMS, guess what, it's still around, and it's still VERY profitable.
VMS shops will continue to use VMS for a long, long time. In fact, as I recall, DEC/Compaq/HP is obligated to continue support through at least 2017. Cool stuff. (Isn't that when the lights go out on Broadway? Ba-dum-bum.)
NonStop is what runs, well, everything. Most SS7 networks are *highly* dependant on Nonstop. Yeah, sure, it's ridiculously expensive -- but it works. If you need 99.999%+ uptime, nothing else provides it --- not even the mainframe.
If you look at this merger through PC eyeglasses, yeah, it probably doesn't make much sense. But then if you look at it with the enterprise market in mind, it makes LOTS of sense.
Now, I'm not wild about the prospect of using the Itanium chips, but I have to say, the idea of running OpenVMS on the same systems with HP-UX, along with Linux, is definitely cool. Even nicer is that HP-UX (which is arcane in a lot of ways) will get some "real" features like TruClustering. Can't wait to see that!
Interesting times are ahead with HP.... I think they're a real powerhouse, and especially now that the integration of both companies is really rolling along, they're going to be a Big Force in the enterprise space.
I think it's going to come down to IBM and HP. Sun's just dropping the ball on SO many fronts lately (Bring back the Blueprints Engineers!!) that it's hard for me to count them as real players in the market right now
Nothing. You still can't make a profit selling PCs if you don't sell as much as DELL. Unless you are Apple.
Lars T.
To the guy who modded me down from perfect to terrible Karma - Apple haters still suck
...is that HP has completely lost sight of its sound roots in the engineering/geek world. HP used to be known as the producer of such geek icons as the HP48 series of calculators, the fantastic old LaserJets (not to be confused with the modern versions) and, of course, the venerable DeskJets. Today, their calculator business is a ghost of its former self, the new calculators are almost uniformly agreed to suck, and their once-vaunted printer business has devolved into the "drug dealer" model of doing business-- hook 'em with cheap printers, then sell them ink at obscene prices. (I remember reading a quote on SlashDot in the recent past saying that ink, ounce for ounce, is worth more than rare old wines now? Or something to that effect...)
Anyhow, HP used to be an engineer's company-- a geek's company. Didn't the Woz used to work there? And he was a geek's geek. Even as recently as my high school education (I'm 25), HP was a touchstone of geek culture.
And now that it's merged with Comcrap, its devolution into yet another mindless "cheap plastic crap computers" business has been completed.
There seem to be only two companies nowadays with solid geek-friendly engineering-- Apple (excepting many of their first-generation products) and IBM (think: ThinkPads... solid engineering and a simple, robust design virtually unchanged in 10 years). HP is now just Compaq wearing a tie. DEC is long gone ("Compaq Tru64 Unix", anyone?), swallowed by the Compaq beast. SGI is going out with a whimper instead of a bang. Sun sold their soul to Redmond and is now producing x86 and x86-64 hardware that are Windows-certified.
And, as usual... no one gives a damn. We're all too damned addicted to ShinyPlasticCrap(TM) to care about the lack of sound engineering.
As far as I'm concerned, Carly Fiorina's head should be on a stake somewhere, the damned sellout. She robbed us all of a good, solid, geeky company in favour of more anticompetitive, mindless, corporate, plastic crap.
Honey, I shrunk the Cygwin
Conversely, you cannot say "I want all of the tax breaks and government s ubsidies of a company that is giving Americans jobs" while at the same time cherry-picking your labor pool from the cheapest of third-world labor. If you want to be a "global company"? Fine. Then relinquish your cushy benefits you get for supporting American interests.
Why don't you put some meat on your argument, demonstrating with actual figures that the tax breaks and "subsidies" (what subsidies?) Dell gets in the US are better than what they can achieve elsewhere.
I suspect the primary reason companies like Dell stay in the US is that they want to be on a US stock exchange. For various historical reasons, the US stock market has been the most attractive for companies since WWII. However, that may be changing now, and companies like Dell may take you at your word.
Dell CEO: So what? Did customers benefit? Did employees benefit? Did shareholders benefit?
Funny he should ask that question of HP/Compaq. I could ask the same question of him and Dell's activities over the last two years. Quality has plunged across the line. The Inspiron series is now a joke. I've yet to meet a single customer of those laptops who did not have a problem within the first year (failed hard drive, fried motherboard, you name it). Outsourcing of support has made it impossible to get problems resolved in an efficient/competent manner. Who's benefitting? Not the customers, not the employees, and if they keep this up, people will stop buying Dells and the shareholders don't benefit either.
Obsolescence and just wearing out. You have to upgrade your PCs. You have to do that at some point in time because they just fall apart. They don't last forever.
Glad that he's so honest. Sorry, the ThinkPads I own do NOT just "wear out" within a year -- six years now and my ThinkPad still works great. I wish I can just shake all the companies that are buying Dells and tell them to wake up. This is a company that is deliberately building crappy products that fall apart in six months because their business model is to automatically "wear out" their machines so you can buy again. God, Dell makes my blood boil.
Yeah. They're selling very well. Absolutely. Because you all want them.
Please don't use "you all" as if you really are born around here. You are no more entitled to say this than Kerry's wife is entitled to say she's an "African American."
(Chief information officers) were holding some of these things with duct tape because they have been around for so long.
No. It's because you built them so poorly. Again, my company's Compaqs and IBMs are NOT wearing out. Only Dells. Guess who we are NOT buying from again?
o, I can't comment on that. But I can tell you, categorically, we're not going to buy Sun. There's just no strategic reason to be doing that.
Thank God. I never want Dell anywhere near a company with some real integrity and solid products.
From IRS
So why, exactly, do you think that a fictitious pass-thru entity such as a corporation should pay taxes which reduce the amount that it can pay in wages and dividends which, at the end of the day, are taxed anyway? Unless you approve of double-taxation and prefer the government gets your company's money instead of you, as an employee or investor, your complaint makes little sense.
Dell makes more money selling PCs, etc at a low cost than HP does doing everything it does. In fact, Dell probably sells its PCs at a price lower than HP's acquisition cost...and still makes money.
What you're saying is that HP couldn't compete on hardware, so it bought compaq to get into the higher-margin services business. If that was the case, then...why didn't HP just spin off the printer business (which is what Hewlett wanted) and keep going into services & hardware?
Because, like the Dell guy says, printing is subsidizing everything else.
Oh, and IBM didn't transform itself by buying also-ran competitors. It transformed itself by listening to its customers and providing what they needed & wanted.
Now you are starting to see the light. Government is not really on the take financially, however it wishes that corporations appear to contribute heavilly to justify their vast priviledges.
In reality, corporations have really no right to exist in a civilised society. They are instruments created by the priviledged to make themselves immune from responsibility and at the same time to avoid any tax burden. The double taxation is a red herring since as others pointed out here, the corporation already has a vast range of ways to avoid any taxes at its disposal (offshore havens are just one of many) and its managers have yet another set of ways to avoid their personal income taxes. This of course applies only to corporations that count, i.e. those who are large enough to have the needed power. Anything small in our current, perverted version of capitalism is by definition powerless.
In short, the corporation is (for those who have a clue how to play the game) the best of both worlds whereby no tax and next to no personal responsibility for one's actions can be achieved at the same time.
And of course one has to admire the results of propaganda by the corporatists in corporate owned media that results in someone being so overhwelmingly naive that he proposes to make the underhanded tax crookery practiced by the corporation and its beneficiaries totally official and above board.
You, Sir, are like a chicken that finds itself staring at its doom in a pot and so it helpfuly offers to pluck its own feathers so that those who are about to eat it need not to be bothered needlessly. Because plucking and cooking would constitute "double effort" and thus would be "unfair" to the cook.
I myself have corporate C, and guess what, it paid no taxes last year! How come? Because its a useless piece of paper with no income.
The interesting number is, what percentage of the aggregate corporate income is taxed, not the number of corporations that are taxed. Most corporations are teeny non-revenue producing shells.
The method and conclusion used here is deceptive.
Because unlike corporations, these are not easilly capable of the same sort of abuses. All forms of partnerships and sole propriatorships are much harder to manouver in order to avoid taxes and personal responsibility.
In general I am against two things: corporations (too much potential for abuse in the name of protection from "frivolous" lawsuits) and pan-national business in general (because no business should rival elected government in power and reach). These are simple things really. I am not anti-capitalist at all, I am simply anti-highway-robberry-in-broad-daylight, which is what those accusing me here of being "brainwashed" seem to find desirable.
boycott them - starting with your computer
I see, so by this logic, if a citizen of Soviet USSR were to revolt against it, he should boycott his food, shoes and the flat he was living in since he was deprived of choices by the system he was living in?
I have nothing against purposeful capitalism. That is whereby, as Adam Smith wisely designed, the animalistic instincts of greed, agression and possessiveness that humans are unable to grow out of are harnessed for the collective good of the society. Not the kind where these instincts are used to create even more greed, aggression and possesivenes. You know the kind of thing various far right-wing nuts propose to make things more "efficient" while they mumble "and I will really fuck everyone in the ass then!" in anticipation to themselves.
sue you for all you're worth
That is a failing of a legal system not of the business model. Institionalized avoidance of responsibility because someone "might" bring "frivolous" suit forward is the same kind of idea as locking people up because they "look like" terrorists or invading countries "pre-emptively" based on ones "reliable hunches". Curiously enough proponents of corporate freedom from responsibility often subscribe to these notions. Funny coincidence, that.
I have news for you. I do not presume to guess your age but odds are that I have been in the "working" world probably longer then you. On top of that I do own a buisness and to make things funnier I used to be a shareholder of a corporation. Like most people with any sort of integrity I learned as I went and my present views are a culmination of my experiences in my rather longish career in IT industry. I say this so that you can cease your rather amusing barking. "Liberal!", "Student!", "Ninny!", "Government", "Arghhh!". Do stop or you are likely to start biting people on their legs soon.
Corporations provide a wealth of jobs and products and services - more so than any other business types
Most businesses are corporations because they would be silly not to take advantage of such a great deal but this deal is far sweeter if you are large enough. Should the corporation be returned to its rightful place as a special social charter, most would happilly be partnersbips and sole propriatorships and provide just as many jobs and products. Besides it would help your cause if you were to provide any proof to your claim, since you do not seem to realize that products of major corporations are mere assemblies of components from bewildering numbers of sources many of which are not corporations but in fact partnerships etc.As for businesses being bigger than governments, so what? You anti-corporate ninnies never realize that governments are the worst type of monopolies
It is patently obvious that discussion with you is pointless. Let me solve your problem for you. No you cannot be Bill Gates. No you will not con everyone out of millions for your one-of-the-kind 20-fold patented software. The super-duper-pan-national-mega-corporation you are dreaming of starting up in your basement will not be larger then CocaCola. Thus you do not need to defend every stupidity and excess large pan-nationals engage in, so that when yours finally makes it grand entrance, you get to play by those generous rules. Give it up. You have "Wage slave" written on your forehead. How do I know? Because only someone destined to be one could be so eager to defend his master.
As to government being a monopoly? On what? Lawmaking? Regulation? Law enforcement? You bloody bet! And that is how it should be. Sure, democratic process can have major flaws but most people will take it over hereditary-feudal-lordship, corporate edition, anytime.
If that doesn't make you laugh nothing will. Yet another reason to avoid Dell, F'ing MS mouth-pieces.
That would be a valid argument if corporations had the same sort of income ranges as regular people. Unfortunately some few corporations exceed in income all of the wage earners in the country combined. Some have incomes exceeding that of GDP of many a small country. Clearly comparing corporation count to that of regular income earners is pointless.
Hmm... I wonder how much of Dell's revenue is made through U.S. government contracts in one way or another...
Yes, that is a weird kind of restriction. In the long run, the WTO may kill those US regulations.
Many governments all over the world are buying US equipment. If even only foreign governments decided to "buy domestic" for their IT needs, the US IT industry would collapse.
Either they should have none of the rights of individuals, or they have the responsibility to pay taxes like individuals.
Ideology: A tool used primarily to avoid the bother of thinking.
Despite my tendency to vote Republican, I agree on this issue--EITHER you tax corporations fairly or not at all. Personally, I would rather see a flat tax on all corps: 10% should do nicely. Walmart would save money by not having to hire so many accountants to try to figure out how to avoid taxes, and the gov't would get more money.
The real way to lower taxes? Less gov't.
"We don't know what we are doing, but we are doing it very carefully,..." Wherry, R.J. Personnel Psychology (1995)
Unless you approve of double-taxation and prefer the government gets your company's money instead of you, as an employee or investor, your complaint makes little sense.
I am sick of hearing and reading this nonsense. Governments do not "get" taxes, States do. Governments are citizens appointed by citizens to administer the State's money and the State's laws. I do like the State having money, that way I can get quality social care, medical care and education, everything for free, if I ever need it. (Even better: I can count on everybody getting it, thus reducing dramatically my insecurity when I walk through the city). I would not live in a poor State. I will never be rich enough to hire personal police forces to keep me safe from hordes of my illiterate, hungry, unemployed neighbours. Will you?
My journal. Mainly about freedom.
It is probably a redundant reply but it can't be stressed enough. What changed is the death of one of the better CUP architectures. The death of the Alpha is one of those great mistakes in the history of computers.
--
If I actually could spell I'd have spelled it right in the first place.
And you are forgetting that if prices are raised on Levi's by 10% because of a tax increase, that same increase is going to apply equally to the competitors. Levi's and its competitors will all increase their prices to compensate for the tax increase and, yes, the consumer will end up paying for it. Those few companies with such incredible margins might absorb some of the increase, but most will be passed on to the consumer. And those companies with lower margins that cannot absord the increase will be made less competitive against those that can, and many will probably be driven out of business as a result.
Oh well, just thought I`d post some realistic economics for those who care to not listen to overstatement.
As soon as you explain how the tax increase applies to Levi's and none of its competitors maybe we'll believe your economic credentials. :)
That's not how it works.
Are you suggesting that Dell was the inventor and exclusive practicer of being critical of their competitors? Seriously? No, seriously, is that what you are suggesting? And you mentioned Apple in the same sentence?
What is wrong with the DJ? Sure, trading in a working iPod that costs twice as much doesn't make sense. But how is this a knock on the DJ? I'm very happy with mine. Yes, it is a little bigger than the iPod, but I can live with that at almost half the price (DJ 20GB was recently on sale for $225). Functionally it works great.
I earn approximately $92,000, taxed at a rate 48% or $44160. Using your formula for corporations, I am really paying 86.25% in taxes (taxes paid / gross income - expenses or 44160 / 92000 - 408000).
Unless you live in a very strange country you don't pay 48% of your income in tax. Most income tax systems are progressive, so you pay tax in bands, paying 48% only on the top band of your income. You can also deduct items from your income according to your circumstances.