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Lindsay Meiners
November 17, 2011
Corbett
AP Literature
Senior Project Research Paper: History of Dell Computers
The technology of the personal computer has been around since the mid 1900’s, evolving
considerably with every decade, and making small advancements by the minute. Starting primarily
with IBM in the 1950s, the computer industry has since exploded into the massive and lucrative
industry that it is today (Polsson). Many brave entrepreneurs have managed to get their foot in the door
of the personal computer industry and make a large profit off of their hard work. One such fortunate
entrepreneur was Michael Dell, creator of the Dell Computers industry. Dell is one of the most
successful entrepreneurs to date whose progress began and skyrocketed at a very young age. In 1992,
Michael Dell became the youngest CEO of a Fortune 500 company when his industry was first made
an addition to the list (Farfan). At this time, Dell was estimated at a net worth of 14 billion dollars, also
earning him his status as one of the richest people on the world.
In 1984, a pre-med student named Michael S. Dell began selling IBM-compatible computers he
built by assembling computer parts bought from wholesale dealers from his University of Texas dorm.
He sold these models he built to potential PC users for highly competitive prices that were much lower
than the standard IBM pricing. Dell soon realized “that the $80,000 per month he brought in could
easily be transformed into a full-fledged business” ("Dell Computer Corp"). With that, Michael Dell
left school in April of that year to found Dell computers. His elimination of a “middleman” retailer in
his manufacturing process allowed to Dell to almost entirely dissipate his competition in the PC
industry, making the company's custom-built machines a tough game to compete with. Dell's success,

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though, was not always such an easy path. “Ironically, the incredible financial success achieved so
early in the time-line of the Dell computer company history actually served as one the biggest
obstacles. The biggest challenges the company faced were keeping up with the increasing demand
for Dell computers, laptops and accessories, while keeping overhead low” (Shea). Dell Computers
initially struggled with keeping up with their finances and meeting demand, but the company's efforts
paid off as the company continued to grow and profit.
Dell Computers also gained its advantage in the industry by several different innovations it
made to the functioning of the PC manufacturers of the time. One such innovation was how highly
customizable the company made their products. Each order was unique to the customer to various
degrees at affordable and relatively low prices compared to competition. While this in and of itself was
remarkable for the PC business, it was not the true highlight of Michael Dell's new ideas introduced to
the world of manufacturing of the personal computer. “One of the most innovative ventures undertaken
early in the Dell computer company history was the creation of a national customer support center that
offered maintenance, trouble shooting, servicing and repair for all Dell products” (Shea). Overall, the
employment of these innovative strategies is a great part of what made Michael Dell's company really
take off. Dell was always held strongly to his high standards for his business. When the industry's
marketing team began to focus too strongly on advertising and pushing the company toward becoming
a big business, Dell saw that that his company was straying much too far from its initial purpose and he
was not going to tolerate it. Near to the end of 1987, the majority of this marketing team was fired or
had just simply left. After the fact in 1988, Dell began to renew this team with a renovated vision for
the industry's expansion and growth. During this same year, the company released a total of three new
machine models complete with leasing options in order to expand their client targets beyond private
homes and small businesses to large industries, educational and government facilities, and
corporations.

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While Michael Dell had almost instantaneous success at a very young age, his entire career has
not been a straight, endless line of success. Dell Computer Corporation has suffered its fair share of
flaws and mistakes as any new business or entrepreneurship does. Such downfalls with any business in
the manufacturing of a product can exceed the general difficulties of any beginning enterprise. General
problems include initial funding, finding facilities, partners, employees, investors, and customers. From
the get-go, Michael Dell never experience significant problems with any of these generic areas, having
made a large profit with an always-generous supply of customers in his beginning stages. But for the
past century, with every new technological innovation comes faults and malfunctions. In mid-2006,
Dell Computers had been previously making several attempts to improve its company’s image and
overall customer satisfaction after being reviewed and harshly criticized on various websites and blogs
over its recent budget cuts in their customer service call reception centers. An ensuing incident would
put Dell Computers under very close scrutiny by blogs and papers on a global scale and bring negative
attention the company did not need. At a conference being held in Osaka, Japan in June of 2006, a Dell
notebook had spontaneously burst into flames, further damaging Dell’s already sensitive declining
public image. The company had recovered the remains of the obviously defective laptop in order to
pursue further investigation of the incident and get to the root of the problem. Dell Computers claimed
that its “engineers examined and tested what remained of the flaming notebook computer for several
days to find the source of the problem. They concluded that the fire was caused by a faulty lithium ion
battery cell” (Darlin). It was a matter of coincidence that this incident has followed a previous recall by
another computer industry of lithium batteries as the team of engineers deemed the fault unrelated.
Fortunately for Dell, this mishap did not damage the company’s overall financial status with stock
values and customer flow remaining relatively constant. As a result, though, Dell ended up spending
$100 million toward a program to improve the overall customer experience within the company. Dell
Computer Corporation also reimbursed the man of the laptop that had spontaneously combusted at the

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2006 Osaka conference.
One short year after the combusting notebook incident in Japan, more criticism and even legal
action came down on Dell Computer Corporation in 2007. The company was accused of consciously
selling PC’s with faulty components to its customers with no warning or recall action taken. In an
attempt to keep productivity at what it was and not to deter customers, legal documents indicate that the
spokespersons for company were instructed to take no action against the issue or breathe a word to
customers and just completely downplay the issue. “The problems stemmed from bad capacitors on
motherboards, which would inevitably cause systems to fail…Capacitors have no moving parts, but
take quite a beating because of their function, which makes for fairly common failures in electrical
systems, including PC’s” (Patrizio). In the legal light it was stated that, in Dell’s defense, many PC
manufacturers suffer from equipment failures and malfunctions. It was claimed that Dell Computer
Corporation was not trying to dishonestly conceal the problems from their consumers as much as they
were frantically searching for a solution to the situation at hand. Dell suffered no affects of a lawsuit
and was able to handle its problems and disgruntled customers and get back on its feet as one of the
world’s leading computer manufacturers.
Just like with any other company in the technological industry, Dell Computers had to do its
best to keep up with competition as well as customer demand and expectations in a rapidly advancing
generation of electronics. In 2010, later than a decade after the company’s takeoff in 1984, Dell began
having to make modernizations to keep up with the booming computers industry. With their stock
values beginning to decline, Dell had to design a way to keep their company updated. Instead of aiming
just to keep up, though, Dell Computers Corporation set out to far surpass their competition to keep
themselves afloat on top of other leading computer manufacturers. According to company executives,
in order to deal with rising competition and slowly declining value, Dell Computers was “aiming to
increase operating income with better execution and supply chain management, and cost efficiencies”

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(Madway). By this, Dell Computer Corporation made its intentions clear that they were to use
responsible hands to increase how much it spent on its operations in hope of improvement. These
operations included retailing and supply as well as becoming more cost-efficient so these changes
could be made possible. Since Dell has also strived to strongly modernize its products offerings also in
hopes of lowering the strength of competition and once again heightening its flow of product
consumers.
Despite all of its trials and tribulations, Dell Computer Corporation is still held up as one of the
leaders of the computer industry to this very day. Michael Dell’s success is almost completely unrivaled
by any other entrepreneur that has braved the PC manufacturing frontier. The company currently has a
total of 103,300 employees and also “provides a range of consulting services to enhance the energy
efficiency of data centers such as capacity planning, data center optimization assessments,
virtualization and energy efficiency research for maximizing the value” (“Dell Inc”). On the other
hand, the inside of the company appears to have more cons than pros. According to reviews of being
employed by the company, current and previous employees made claims that “Dell does almost nothing
and I do mean nothing, in the U.S. anymore” and “management skills of many of the people in
leadership roles are very poor” (“Dell Reviews”). In contrast, consumer reviews of their performance
seem to be almost the exact opposite with claims such as “[Dell has an] amazing selection, and even
better customer service. I've been very happy with the products I received; the customer service is also
top notch. They made a mistake, quickly corrected it, and offered me numerous upgrades” (“Dell
Business Online”). Overall though, the versatile nature of the company has greatly contributed to its
wildly successful nature that had begun in 1984 in the very innovative mind of nineteen-year-old
Michael Dell. Customers remain satisfied and the leadership of the company has certainly provided an
innovative take on the PC manufacturing industry and those involved.