Michael Dell
Encyclopedia
Michael Saul Dell is an American business magnate
and the founder, chairman and chief executive officer
of Dell Inc
. He is the 44th richest person in the world, with a net worth of US$14.6 billion in 2011, based primarily on the 243.35 million shares of Dell stock worth $3.5 billion that he owns, giving him 12% ownership of the company. His remaining wealth of roughly $10 billion is invested in other companies, and managed by a firm called MSD Capital (named after Dell's initials).
. In a bid to enter business early, he applied to take a high school equivalency exam at age eight. In his early teens, he invested his earnings
from part-time jobs in stocks
and precious metals.
Dell purchased his first calculator
at age seven and encountered his first teletype machine in junior high, which he programmed after school. At age 15, after playing with computers at Radio Shack
, he got his first computer, an Apple II
, which he promptly disassembled to see how it worked. Dell attended Memorial High School
in Houston, selling subscriptions to the Houston Post
in the summer. While making cold calls, Dell observed that newlyweds and people moving into new homes were most likely to buy a subscription. He targeted this demographic group by collecting names from marriage and mortgage applications. Dell earned $18,000 that year, exceeding the annual income of his history and economics teacher.
, Dell started an informal business putting together and selling upgrade kits for personal computers in room 2713 of the Dobie Center
residential building. He then applied for a vendor license to bid on contracts for the State of Texas, winning bids by not having the overhead of a computer store.
In January 1984, Dell banked on his conviction that the potential cost savings of a manufacturer selling
PCs directly had enormous advantages over the conventional indirect retail channel. In January 1984, Dell registered his company as "PC's Limited". Operating out of a condominium
, the business sold between $50,000 and $80,000 in upgraded PCs, kits, and add-on components. In May, Dell incorporated the company as "Dell Computer Corporation" and relocated it to a business center in North Austin. The company employed a few order takers, a few more people to fulfill them, and, as Dell recalled, a manufacturing staff "consisting of three guys with screwdrivers sitting at six-foot tables." The venture's capitalization cost was $1,000.
In 1992 at the age of 27, Dell became the youngest CEO to have his company ranked in Fortune
magazine's list of the top 500 corporations. In 1996, Dell started selling computers over the Web, the same year his company launched its first servers. Dell Inc. soon reported about $1 million in sales per day from dell.com. In the first quarter of 2001, Dell Inc. reached a world market share of 12.8 percent, passing Compaq
to become the world's largest PC maker. The metric marked the first time the rankings had shifted over the previous seven years. The company's combined shipments of desktops, notebooks and servers grew 34.3 percent worldwide and 30.7 percent in the United States at a time when competitors' sales were shrinking.
In 1998, Dell founded MSD Capital L.P. to exclusively manage his and his family's investments. Investment activities include publicly-traded securities, private equity activities, and real estate.
The firm employs 80 people and has offices in New York, Santa Monica and London. Dell is not involved in day-to-day operations.
At a speech before the Detroit Economic Club
in November, 1999, Dell defined the "3 C's" of e-commerce (content, commerce, and community) while articulating his strategy for offering a superior customer experience online.
On March 4, 2004, Dell stepped down as CEO of Dell Inc. but stayed as chairman of the board, while Kevin B. Rollins
, then president and COO
, became president and CEO. On January 31, 2007, Dell returned as CEO at the request of the board, succeeding Rollins.
Accolades for Dell include: "Entrepreneur of the Year" (at age 24) from Inc. magazine; "Top CEO in American Business" from Worth magazine; "CEO of the Year" from Financial World
, Industry Week and Chief Executive
magazines.
Dell serves on the Foundation Board of the World Economic Forum, the executive committee of the International Business Council, the U.S. Business Council, and the governing board of the Indian School of Business
in Hyderabad, India. He previously served as a member of the U.S. President’s Council of Advisors on Science and Technology.
In July 2010 Dell agreed to pay a $4 million penalty to settle SEC charges of disclosure and accounting fraud in relation to undisclosed payments from Intel Corporation. Dell Corporation and two other company executives also paid to settle all the charges.
estimates Dell's net worth at $14.6 billion.
Dell resides in Austin, Texas
with his wife, Susan, and their four children.
, which focuses on children’s causes. By 2010, the foundation had committed more than $530 million to assist nonprofit organizations serving urban communities in the United States and India. The foundation has also provided $65 million in grants to three health-related organizations associated with the University of Texas: the Michael & Susan Dell Center for Advancement of Healthy Living, the Dell Pediatric Research Institute, and the Dell Children’s Medical Center, as well as funding for a new computer science building on the University of Texas campus.
In 2002, Dell received an honorary doctorate in Economic Science from the University of Limerick
in honor of his investment in Ireland
and the local community and for his support for educational initiatives.
.
, a timeline of Michael Dell's life is included in the article American Magnate: Michael Dell: How a homegrown geek outsourced, downsized, and tax-breaked his way to the top. The article juxtaposes the CEO's spending on luxurious homes and private jet travel with his pursuit of tax breaks and tax holidays and Dell Computer's outsourcing of jobs overseas.
Business magnate
A business magnate, sometimes referred to as a capitalist, czar, mogul, tycoon, baron, oligarch, or industrialist, is an informal term used to refer to an entrepreneur who has reached prominence and derived a notable amount of wealth from a particular industry .-Etymology:The word magnate itself...
and the founder, chairman and chief executive officer
Chief executive officer
A chief executive officer , managing director , Executive Director for non-profit organizations, or chief executive is the highest-ranking corporate officer or administrator in charge of total management of an organization...
of Dell Inc
Dell
Dell, Inc. is an American multinational information technology corporation based in 1 Dell Way, Round Rock, Texas, United States, that develops, sells and supports computers and related products and services. Bearing the name of its founder, Michael Dell, the company is one of the largest...
. He is the 44th richest person in the world, with a net worth of US$14.6 billion in 2011, based primarily on the 243.35 million shares of Dell stock worth $3.5 billion that he owns, giving him 12% ownership of the company. His remaining wealth of roughly $10 billion is invested in other companies, and managed by a firm called MSD Capital (named after Dell's initials).
Early life and education
Michael Dell was born to a well-off, Texan Jewish family, on February 23, 1965. The son of an orthodontist and a stockbroker, Dell attended Herod Elementary School in Houston, TexasHouston, Texas
Houston is the fourth-largest city in the United States, and the largest city in the state of Texas. According to the 2010 U.S. Census, the city had a population of 2.1 million people within an area of . Houston is the seat of Harris County and the economic center of , which is the ...
. In a bid to enter business early, he applied to take a high school equivalency exam at age eight. In his early teens, he invested his earnings
Earnings
Earnings are the net benefits of a Corporation's operation. Earnings is also the amount on which corporate tax is due. For an analysis of specific aspects of corporate operations several more specific terms are used as EBIT -- earnings before interest and taxes, EBITDA - earnings before...
from part-time jobs in stocks
Stock
The capital stock of a business entity represents the original capital paid into or invested in the business by its founders. It serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors...
and precious metals.
Dell purchased his first calculator
Calculator
An electronic calculator is a small, portable, usually inexpensive electronic device used to perform the basic operations of arithmetic. Modern calculators are more portable than most computers, though most PDAs are comparable in size to handheld calculators.The first solid-state electronic...
at age seven and encountered his first teletype machine in junior high, which he programmed after school. At age 15, after playing with computers at Radio Shack
Radio shack
Radio shack is a slang term for a room or structure for housing radio equipment.-History:In the early days of radio, equipment was experimental and home-built. The first radio transmitters used a noisy spark to generate radio waves and were often housed in a garage or shed. When radio was first...
, he got his first computer, an Apple II
Apple II
The Apple II is an 8-bit home computer, one of the first highly successful mass-produced microcomputer products, designed primarily by Steve Wozniak, manufactured by Apple Computer and introduced in 1977...
, which he promptly disassembled to see how it worked. Dell attended Memorial High School
Memorial High School (Hedwig Village, Texas)
Memorial High School is a secondary school located at 935 Echo Lane in Hedwig Village, Texas, United States.Memorial serves students in portions of the Memorial and Spring Branch regions of Houston and several enclaves within the portions...
in Houston, selling subscriptions to the Houston Post
Houston Post
The Houston Post was a newspaper that had its headquarters in Houston, Texas, United States. In 1995, the newspaper was absorbed into the Houston Chronicle.-History:The newspaper was established on February 19, 1880, by Gail Borden Johnson...
in the summer. While making cold calls, Dell observed that newlyweds and people moving into new homes were most likely to buy a subscription. He targeted this demographic group by collecting names from marriage and mortgage applications. Dell earned $18,000 that year, exceeding the annual income of his history and economics teacher.
Career
While a freshman pre-med student at the University of Texas at AustinUniversity of Texas at Austin
The University of Texas at Austin is a state research university located in Austin, Texas, USA, and is the flagship institution of the The University of Texas System. Founded in 1883, its campus is located approximately from the Texas State Capitol in Austin...
, Dell started an informal business putting together and selling upgrade kits for personal computers in room 2713 of the Dobie Center
Dobie Center
Dobie Center, named after J. Frank Dobie, is a privately owned twenty-seven story residence hall located adjacent to the University of Texas at Austin campus. In addition to being a private residence for students, Dobie also contains a two-story mall, a movie theatre, restaurants, and specialty...
residential building. He then applied for a vendor license to bid on contracts for the State of Texas, winning bids by not having the overhead of a computer store.
In January 1984, Dell banked on his conviction that the potential cost savings of a manufacturer selling
Direct selling
Direct selling is the marketing and selling of products directly to consumers away from a fixed retail location. Peddling is the oldest form of direct selling. Modern direct selling includes sales made through the party plan, one-on-one demonstrations, and other personal contact arrangements as...
PCs directly had enormous advantages over the conventional indirect retail channel. In January 1984, Dell registered his company as "PC's Limited". Operating out of a condominium
Condominium
A condominium, or condo, is the form of housing tenure and other real property where a specified part of a piece of real estate is individually owned while use of and access to common facilities in the piece such as hallways, heating system, elevators, exterior areas is executed under legal rights...
, the business sold between $50,000 and $80,000 in upgraded PCs, kits, and add-on components. In May, Dell incorporated the company as "Dell Computer Corporation" and relocated it to a business center in North Austin. The company employed a few order takers, a few more people to fulfill them, and, as Dell recalled, a manufacturing staff "consisting of three guys with screwdrivers sitting at six-foot tables." The venture's capitalization cost was $1,000.
In 1992 at the age of 27, Dell became the youngest CEO to have his company ranked in Fortune
Fortune (magazine)
Fortune is a global business magazine published by Time Inc. Founded by Henry Luce in 1930, the publishing business, consisting of Time, Life, Fortune, and Sports Illustrated, grew to become Time Warner. In turn, AOL grew as it acquired Time Warner in 2000 when Time Warner was the world's largest...
magazine's list of the top 500 corporations. In 1996, Dell started selling computers over the Web, the same year his company launched its first servers. Dell Inc. soon reported about $1 million in sales per day from dell.com. In the first quarter of 2001, Dell Inc. reached a world market share of 12.8 percent, passing Compaq
Compaq
Compaq Computer Corporation is a personal computer company founded in 1982. Once the largest supplier of personal computing systems in the world, Compaq existed as an independent corporation until 2002, when it was acquired for US$25 billion by Hewlett-Packard....
to become the world's largest PC maker. The metric marked the first time the rankings had shifted over the previous seven years. The company's combined shipments of desktops, notebooks and servers grew 34.3 percent worldwide and 30.7 percent in the United States at a time when competitors' sales were shrinking.
In 1998, Dell founded MSD Capital L.P. to exclusively manage his and his family's investments. Investment activities include publicly-traded securities, private equity activities, and real estate.
The firm employs 80 people and has offices in New York, Santa Monica and London. Dell is not involved in day-to-day operations.
At a speech before the Detroit Economic Club
Detroit Economic Club
The Detroit Economic Club, headquartered at 211 West Fort Street in downtown Detroit, Michigan, was formed in 1934 as a platform for the discussion and debate of important business, government and social issues...
in November, 1999, Dell defined the "3 C's" of e-commerce (content, commerce, and community) while articulating his strategy for offering a superior customer experience online.
On March 4, 2004, Dell stepped down as CEO of Dell Inc. but stayed as chairman of the board, while Kevin B. Rollins
Kevin Rollins
Kevin B. Rollins is an American businessman and philanthropist. The former President and CEO of Dell Computers, in 2006 Rollins was named by London's CBR as the 9th Most Influential person in the Enterprise IT sector....
, then president and COO
Chief operating officer
A Chief Operating Officer or Director of Operations can be one of the highest-ranking executives in an organization and comprises part of the "C-Suite"...
, became president and CEO. On January 31, 2007, Dell returned as CEO at the request of the board, succeeding Rollins.
Accolades for Dell include: "Entrepreneur of the Year" (at age 24) from Inc. magazine; "Top CEO in American Business" from Worth magazine; "CEO of the Year" from Financial World
Financial World
Financial World was the United States' oldest business magazine before going out of business in 1998. In the magazine's later years of publication, its signature issue was the "Sports Franchise Valuation Issue".- History :...
, Industry Week and Chief Executive
Chief Executive Magazine
Chief Executive is a business magazine published by Chief Executive Group, LLC.-Description:Chief Executive began publication in 1976 and JP Donlon is its Editor-in-Chief. The magazine is published six times a year and has a circulation of 42,000 copies is audited twice yearly by BPA Worldwide...
magazines.
Dell serves on the Foundation Board of the World Economic Forum, the executive committee of the International Business Council, the U.S. Business Council, and the governing board of the Indian School of Business
Indian School of Business
The Indian School of Business is a business school in Hyderabad, Andhra Pradesh, India and is widely recognized as one of the top business schools in the world. It offers a Post Graduate Programme in Management , a Fellow Program in Management, and a Post Graduate Programme in Management for Senior...
in Hyderabad, India. He previously served as a member of the U.S. President’s Council of Advisors on Science and Technology.
In July 2010 Dell agreed to pay a $4 million penalty to settle SEC charges of disclosure and accounting fraud in relation to undisclosed payments from Intel Corporation. Dell Corporation and two other company executives also paid to settle all the charges.
Writings
Dell's 1999 book, Direct from Dell: Strategies That Revolutionized an Industry, is an account of his early life, his company's founding, growth and missteps, as well as lessons learned. The book was written in collaboration with Catherine Fredman.Wealth and personal life
As of 2011, ForbesForbes
Forbes is an American publishing and media company. Its flagship publication, the Forbes magazine, is published biweekly. Its primary competitors in the national business magazine category are Fortune, which is also published biweekly, and Business Week...
estimates Dell's net worth at $14.6 billion.
Dell resides in Austin, Texas
Austin, Texas
Austin is the capital city of the U.S. state of :Texas and the seat of Travis County. Located in Central Texas on the eastern edge of the American Southwest, it is the fourth-largest city in Texas and the 14th most populous city in the United States. It was the third-fastest-growing large city in...
with his wife, Susan, and their four children.
Philanthropy
In 1999, Michael and Susan Dell established the Michael and Susan Dell FoundationMichael and Susan Dell Foundation
The Michael & Susan Dell Foundation was set up in 1999. Susan and Michael Dell have supported the foundation primarily through investing the proceeds of sales of shares of Dell Inc. More than $650 million has been given to children's charities and other worthy causes in the United States, India,...
, which focuses on children’s causes. By 2010, the foundation had committed more than $530 million to assist nonprofit organizations serving urban communities in the United States and India. The foundation has also provided $65 million in grants to three health-related organizations associated with the University of Texas: the Michael & Susan Dell Center for Advancement of Healthy Living, the Dell Pediatric Research Institute, and the Dell Children’s Medical Center, as well as funding for a new computer science building on the University of Texas campus.
In 2002, Dell received an honorary doctorate in Economic Science from the University of Limerick
University of Limerick
The University of Limerick is a university in Ireland near the city of Limerick on the island's west coast. It was established in 1972 as the National Institute for Higher Education, Limerick and became a university by statute in 1989 in accordance with the University of Limerick Act 1989...
in honor of his investment in Ireland
Republic of Ireland
Ireland , described as the Republic of Ireland , is a sovereign state in Europe occupying approximately five-sixths of the island of the same name. Its capital is Dublin. Ireland, which had a population of 4.58 million in 2011, is a constitutional republic governed as a parliamentary democracy,...
and the local community and for his support for educational initiatives.
Political contributions
In 2004, Susan and Michael Dell were among 53 contributors of $250,000 (the maximum legal donation) to the second inauguration of President George W. BushGeorge W. Bush
George Walker Bush is an American politician who served as the 43rd President of the United States, from 2001 to 2009. Before that, he was the 46th Governor of Texas, having served from 1995 to 2000....
.
Criticism
In the April 2011 issue of Mother JonesMother Jones (magazine)
Mother Jones is an American independent news organization, featuring investigative and breaking news reporting on politics, the environment, human rights, and culture. Mother Jones has been nominated for 23 National Magazine Awards and has won six times, including for General Excellence in 2001,...
, a timeline of Michael Dell's life is included in the article American Magnate: Michael Dell: How a homegrown geek outsourced, downsized, and tax-breaked his way to the top. The article juxtaposes the CEO's spending on luxurious homes and private jet travel with his pursuit of tax breaks and tax holidays and Dell Computer's outsourcing of jobs overseas.