Michael Dell on standards

[James Love <love@cptech.org>]

This is Michael Dell's statement, which emphasizes the benefits of
standardization.  
jamie

------------------
Testimony of Michael Dell
Chairman and Chief Executive Officer
Dell Computer Corporation
before the Senate Committee on the Judiciary
Washington, D.C.
March 3, 1998 


Mr. Chairman, Members of the Committee, I am Michael Dell, Chairman and
Chief Executive Officer of Dell Computer Corporation. I am pleased to be
invited to testify today on competitive conditions in the computer
marketplace. I would like to discuss two key points: first, the computer
systems industry is intensely competitive, and second, the
standardization of software and hardware has been a positive, even
necessary, development. 

Since my viewpoint has been shaped by my history in the industry - which
is the history of Dell Computer Corporation - I would like to begin by
providing you with a brief overview of our company. 

Dell Computer was founded in 1984 on a concept which was unconventional
at the time: to design and sell custom-made computers directly to
end-users, bypassing the dominant method of computer distribution, which
was to sell mass-produced computers through retail stores. 

Since then, we have further developed the concept of build-to-order, and
it underlies nearly all of our business activities. These include
computer systems built one at a time, factory-installed software, and
factory integration of hardware and peripherals. We also tailor our
after-sales services to the customer's
business size and special requests. 

This approach enables us to establish direct relationships with our
customers. We currently have more than 125,000 contacts with our
customers every week, by telephone or in person. In addition, more than
one million customers and potential customers contact us each week over
the Internet, via www.dell.com. 

Through these direct relationships, we are able to gauge efficiently
customer demand for our products. Because those products are
built-to-order, we also can determine customer demand for the individual
components, including hardware and software. 

Today, Dell has annual revenues of $12 billion and about six percent
global marketshare. We are headquartered in Round Rock, Texas, near
Austin. We employ slightly more than 16,000 employees worldwide, with
nearly 12,000 of them located in the Greater Austin area. 

Mr. Chairman, my experience with Dell has shown me that the most
powerful competitive force in our industry is evolving customer demand -
and the companies that are successful are those that are able to stay
closest to customer needs. 

The trend to standardization in both hardware and software within our
business has been market-driven. Standardization has been one of the
reasons that Dell has been able to grow rapidly alongside much older and
more established companies such as IBM and Hewlett Packard. 

Standards simplify the computing environment and establish a common
hardware and software platform to make it easier for systems to work
together and to exchange information. Standards also simplify product
development and service, thereby reducing our costs. 

Just as important, standards have clarified computing technology for
average users. By driving overall costs down, standards also have
increased the penetration of computers into the consumer and business
mainstream. 

Mr. Chairman, Dell has achieved dramatic growth in a highly competitive
environment by dealing directly with our customers and efficiently
delivering Dell-designed systems built-to-order. We believe the trend to
standardization has helped both Dell and our customers. 

I thank the Chairman and the Committee for the opportunity to share
these observations with you. I would be happy to answer any questions.  
 
-- 
James Love
Consumer Project on Technology
P.O. Box 19367, Washington, DC 20036
love@cptech.org | http://www.cptech.org
202.387.8030, fax 202.234.5176