Dell CEO: Direct Model Is Religion

Q&A: Despite some challenges in 2005, Kevin Rollins, president and CEO of Dell Inc., insists the company's business model is strong and that he sees no significant changes to it in the year ahead.

Despite some challenges in 2005, Kevin Rollins, president and CEO of Dell Inc., insists the companys business model is a strong one, and that he sees no significant changes to it in the year ahead.

Rollins recently spoke with eWEEK News Editor Dennis Fisher and senior editors Jeffrey Burt and Brian Fonseca about such issues as customer server, channel strategies and Advanced Micro Devices Inc.

Can you give us your assessment of the company in 2005 and as 2006 approaches?

In terms of where Dell stands compared with anybody in the industry in terms of growth and profitability and size, its unparalleled. There are some folks who maybe posted a little better improvement over where they were in 2004, but if you look at a relative comparison, on really any metric you like, its hard to compare.

Financial performance, growth, revenue, share, profitability, new product introduction, particularly growth in the enterprise, theres really no one whos done any better than we have.

Weve made some stumbles in terms of our relationship with Wall Street, but that really shouldnt have a whole lot to do with our customers, and weve made a few stumbles on our customer account support, which are fairly easy things to fix, and knowing what weve done to improve there. But it has not affected the trajectory and the fundamentals of the business—the direct model and our financial performance.

Can you talk about your stumbles in the customer service area and what youve done to fix that area?

First off, on the corporate side we really havent had a major change at all. In fact, a couple of months ago I was coming back from Europe and reading Financial Times, and a in worldwide survey of CEOs and financial analysts, Dell was ranked No. 2 worldwide in terms of service, behind Toyota [Corp.]. So our reputation in terms of what weve been doing and what weve been selling in the corporate world still [is strong].

Weve made some mistakes in terms of the resources were applied to the consumer business in the U.S.—not in Europe, not in Asia—and thats just a function of missing it.


Click here to read more about Dells efforts in the consumer market.

Weve already turned that around—hiring the resources, getting the training in place—to fix it. … [When problems arose,] the survey said Dell has gone from superior to tied with everybody else, so we didnt drop to the bottom of the bucket or anything, but our goal is to be better than everybody else, and so on the consumer side we had that shift in our overall strategy.

But [Technology Business Research Inc.] and others keep coming out with ratings [and] were still ranked No. 1—some cases tied for No. 1, some cases outright No. 1.

Recently they came out with a survey, and we increased our gap on that between [Hewlett-Packard Co.] and IBM/Lenovo [Group Ltd.]. The service and support on the corporate side is still fine, but its really resource [on the consumer side].

Next Page: Work to be done.