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Dell—Back in form

Zafar Anjum | April 7, 2014
Speaking in Singapore recently, the founder and chairman of Dell Inc. Michael Dell discussed his journey as an inventor and businessmen, why he took Dell private and what he foresees as the emerging opportunities in technology.

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On Entrepreneurship: 10 things Michael Dell said in Singapore

When asked if it was still possible to give birth to a big company with a seed fund of US$1,000, Dell said, yes, it was still possible.

Television personality Timothy Go, who was leading the conversation with Dell on stage, asked him why he took the company private last year.

"Financial markets are incredibly short-term focused," Dell said, justifying his move to take the company private. "Why bother with short-term minded shareholders?"

"We're the largest company in terms of revenue to go from public to private," Dell had announced to his 350 employees in his Silicon Valley office at the time he privatized his company. "In another week or two we'll be the world's largest startup."

After going private, the company is now turbo-charged like a start-up: "We can now go faster, bigger, and stronger," he said. "It's much simpler." But Dell is a startup with huge advantages. The company has plenty of capital and the balance sheet is strong, and people know us, he said.

Growth in PCs

When Go asked him where he saw growth in PCs (personal computers), Dell replied, "In Dell." The hall reverted with guffaws.

While it's true that Dell was once at the top of the PC business (the world's third-largest PC maker) and was getting most of its revenue from the PC business, the future did not look rosy for the PC industry. The price of PCs was falling, the shipments were dwindling and customers were turning to tablets and smartphones.

Before the company went private, it got more than 60% of revenue from PCs and its market share in services and software stood at less than 1%.

In Dell's opinion, the PC business is still going strong. "PC is different today than what it was 20 years ago," he said. "There are different form factors today including tablets, virtual PCs, high-end workstations, and convertibles, but these do not replace the need for PCs. One million PCs are still being sold everyday and some 1.5 billion people use the PC everyday."

Dell gave the analogy of shoes and bicycles. 'If we have bicycles, it does not mean that we don't need shoes to walk anymore.' Likewise, buses will not replace cars and cars will not replace buses. Every form factor has its own use-that's what he tried to say, justifying the need for PCs in a world of burgeoning tablets and smartphones.

Cyber security and BYOD

As the business is changing, Dell said that his company is focused on new business areas such as cloud computing, BYOD (bring your own device), big data services and security.

 

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