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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.
Is that HP now has a MUCH larger enterprise offering, a larger services staff, and a line of decent x86 servers. This means that they can get into a lot more large enterprise support contracts where only IBM really played before. Dell is great at slinging boxes for a cheap price but they can't compete where the real money is, services. I don't know how much it's showing on HP's balance sheet yet but I can guarentee you that the only way HP was going to survive was to transform itself the same way IBM did in the 90's, thanks to Dell and all the Dell wanna-be's there's zero cash to be had in building boxes, so you either have to beat Dell at their own game or find another area where there's money to be made, and services are about the only area I see.
There are 4 boxes to use in the defense of liberty: soap, ballot, jury, ammo. Use in that order. Starting now.
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
I live near a large HP facility (Boise, Idaho) and I've seen first hand the changes at HP. Brilliant engineers are being fired, and what used to be an emphasis on innovation and creativity has been replaced by a lust for short term profit to please the investors. I used to think HP was the most admirable company in tech, and maybe it was, but now... What goes around comes around though, I'm not expecting HP to succeed in the long run.
Vandemar.org
Executranslator output:
"HP had a great printer business, and especially when we saw Queen Fiorina doing the merger dance, we thought, 'Hey. We're Dell, we rule, dude! We can make printers, kill cHomPaq's profit center, and then TAKE OVER THE WORLD!' But even after their sucky merger, they still make awesome printers, everyone still buys 'em, and we can't sell our printers. I hate her. Damn you, Carly! Oh, and our pothead spokesteen who got arrested for dealing pot, I hate him too."
It's even more fun if you picture him half-drunk at a bar, 10 o'clock shadow, disheveled suit- telling all this to another drunk guy at the bar.
Please help metamoderate.
Did you know that corporations pay less than 5% of tax revenue?
Used to be about 50%. In the last half-decade, it's shifted almost entirely onto the shoulders of the individual, because corporations have become experts at paying the least amount of taxes possible. Yay corporations!
Please help metamoderate.
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.
1. Carly Got Paid. She wanted to make a few million and shore up her shaky position with the board. She got both wishes.
2. COMPAQ PAY CURVES
Compaq paid their people less, gave them fewer benefits, and shorter vacation. By applying Compaq Pay Curves, most of the people at HP suddenly found themselves at the top of their pay curve. They won't get a raise for decades. On top of that, if you were getting 5 weeks vacation because you had slaved for HP for 15 years, you now only get 4, thanks to the adoption ofthe Compaq HR regs. There was a whole raft of HR changes in HP that saved the company hundreds of millions of dollars on an ongoing basis. So not only did it chop X jillion bucks off their expenses this year, they wouldn't see it coming back the next.
Those left stateside who are not in management and not outsourced, are doing the work of three or four people.
This is NOT a sustainable situation and it is going to come crashing down in fairly short order.
Carly's HP is a disaster. She led Lucent gliding into a death spiral, and she's going to sink HP. And weep all the way to the bank. Plutocratic leeches like her must be stopped.
RS
Shoes for Industry. Shoes for the Dead.
He said "The bulk of our employees are still in the U.S. "
That is a LIE.
ROUND ROCK, Texas (AP) - Computer maker Dell Inc. has more workers overseas than it does in the United States, reversing the makeup of its work force of just a year ago. Round Rock-based Dell said it was allocating resources where growth has been fastest, including China and Japan.
"We have great opportunities outside the U.S., and as such we have built our employee base in areas that best reflect our strong growth areas," Dell spokesman Bob Kaufman said Tuesday. "Our jobs have grown all over the world, including here in the U.S."
Dell had 46,000 employees as of Jan. 30. About 22,200 of those, or 48.3 percent, were in the United States, while 23,800 people, or 51.7 percent, worked in other countries, according to a filing with the Securities and Exchange Commission on Monday.
A year ago, 54.2 percent of Dell's workers were in the United States, according to company filings. Dell's work force grew 17.6 percent during 2003.
Dell said overseas job growth in the past year ran the gamut, from sales and manufacturing to call center support.
Last year, Dell stopped routing corporate customers to a technical support call center in Bangalore, India after a flood of complaints. Tech support for Optiplex desktop and Latitude notebook computers are being handled from call centers in Texas, Idaho and Tennessee instead.
Shares of Dell were down 23 cents to $35.56 in afternoon trading on the Nasdaq Stock Market.
FROM: Associated Press ^ | Apr 13, 2004
You're right, you should choose your battles carefully!
There's a bit of a difference between 1.8 Ghz Celeron notebooks and 1.8 Ghz Pentium M processors.
Dell doesn't offer a 1.8 Ghz laptop with a Celeron processor. What you were looking at is this:
Dell
Go look on Pricewatch:
1.8 Ghz Celeron Notebooks starting at $800.
1.8 Ghz Pentium M Notebooks starting at $1700.
Where are my mod points when I'm forced to defend a company I don't particularly care for against trolls...?
Ibanez
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)
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.
IMHO, it's not tax breaks that piss me off. It's that these corporations are shirking their responsibility as a US entity.
Both people and organizations pay taxes to support a government to protect them, provide service programs, and allow us to pursue happiness.
People and organizations are taxed differently in the US. An American Corporation makes X dollars in a year, but, they spent Y dollars doing it. Thus, their tax basis is X - Y. If an American Worker, on the other hand, makes X, then he/she generally pays taxes on the whole amount.
In a company with most or all American employees, this makes sense. Employees are paid and then need to pay taxes. Since salary is usually one of the largest portions of "Y", the corporation is "taxed" via its employees.
However, if the employee is not an American citizen, no tax revenue is generated. For every corporate dollar of salary that gets sent overseas, we the people of the United States need to kick in another $.33 to cover the lost tax base.
Why should I have to pay more taxes because Dell or IBM or Microsoft sends jobs to China, India, etc?
I am not sure what the answer is, perhaps it is a tax plan that says you can offshore, but, the corporation will be assessed a tax for each job offshored equal to the amount of the taxes that would have been generated if the job stayed in the US. That, or maybe if Z% of jobs are offshored, Z% of X (revenue from above) cannot be "balanced" by expenses - ie - you must pay taxes on it.
Who knows.... it's Monday morning and I am not 100% with it yet.
- Tony