DELL is an American multinational company that is well-known around the world for its range of computer-related products and services.

The company was founded by Michael Dell in 1984, and the business continues to prosper in the modern day. However, it hasn’t been a simple ride, and there were plenty of bumps in the road.

Part of DELL’s incredible history revolves around the company’s ability to bounce back from and overcome various challenges. It is something that the company has made a living from.

Early Days

The company that would eventually be called DELL was founded by Michael Dell in 1984. It was registered initially as “PC’s Limited“. Dell was studying at the University of Texas at the time.

At first, the company was headquartered in Dell’s dormitory room. To begin with, Dell sold IBM-compatible computers, albeit with altered specifications. IBM were the industry leaders at the time.

Dell’s family were impressed by his venture, and decided to give him $1,000 in capital. This resulted in Dell dropping out of University and putting his efforts into the company.

Much of the company’s early success came through Dell spotting a gap in the market. Dell offered customisable computers to consumers. Each buyer could provide Dell with their exact specification, and he would build the computer accordingly.

Dell was able to attract a lot of interest through advertisements in computer magazines that had a national reach. At the end of PC’s Limited’s first year of operation, the company had already grossed more than $73million.

This was quickly followed up by PC’s Limited releasing the first computer to be branded with their own name. It was named the Turbo PC – with a price tag of $795. This would be the first of many computers.

Expansion

With the business growing hugely, it was necessary for Michael Dell to bring in some business expertise. He was just 19 at the time, and needed assistance in turning PC’s limited into a large company. Dell decided to bring in Lee Walker, a well-renowned venture capitalist, to be President and Chief Operating Officer of the company.

In 1987, the name “PC’s Limited” was dropped in favour of the “DELL Computer Corporation”. This change coincided with an enormous global expansion for the business.

This led to an initial public offering in 1988 – just a few years into the company’s history. Investors were queing up to invest in DELL – which had managed to claw significant market share away from IBM. This was an achievement that seemed highly unlikely just years ago.

Walker retired, which led to businessman Morton Meyerson being hired with a remit of transforming DELL into a billion-dollar enterprise. The success of the company’s public offering meant that this goal was well on its way to being met.

In 1992, DELL featured on Fortune Magazine’s Fortune 500 list for the first time, due to its position as one of the United State’s largest 500 companies. In the process, this earned Michael Dell the distinction of being the youngest CEO of a Fortune 500 company in history.

Continued Growth

The growth continued throughout the 1990s, with the advent of the internet key in helping the company’s progression.

DELL were able to put more effort into the wider consumer market. Once again, the company were able to identify a gap in the market, which concerned consumers that wanted a powerful computer, as opposed to standard entry-level devices.

The ability to buy directly from a manufacturer was rare at the time, as was the quick speed that DELL would process a customer’s order – regardless of their choice of specifications.

The company didn’t rest on its laurels, and in the mid-1990s, DELL expanded into other areas. They once again took on IBM by selling servers.

DELL undercut their competitors, allowing them to build a foothold in the market. The company used Microsoft-based technology, and would eventually surpass Compaq as the top provider of Intel-based servers around the world.

Furthermore, DELL also overhauled IBM as the leading computer manufacturer during the 1990s. As IBM regressed significantly, DELL went from strength-to-strength.

After losing their position as the world’s largest PC manufacturer in 1998 to Compaq, DELL returned to first place in 1999.

Around the turn of the millennium, several technology companies struggled due to a saturated market. Household names like IBM, Compaq and Packard Bell were among those to see a marked fall in sales growth.

By the early 2000s, DELL had expanded into other technological areas, including televisions, audio players, monitors and printers. This lessened DELL’s reliance on their computing division.

In 2004, following two decades in the role, Michael Dell left his position as CEO of the company. Many analysts suggested that DELL would struggle without their figurehead. Such fears would come true.

Downturn

Initially, DELL continued to see continued strong sales following the departure of Michael Dell from the company. However, in 2005, sales growth stalled, leading to a crushing period where the company lost 25% of its stock value.

This stall was largely attributed to a matured computer market that was awaiting its latest innovation. As the majority of DELL’s income came from the computer market, the business were hit hard in this period.

Moreover, its previous dominance in undercutting the costs of its opposition had been stopped. Newer entrants Acer and Hewlett Packard both found ways of competing with DELL.

Then there was the issue where for the first time in their history, DELL found that their business model of selling directly to the consumer wasn’t proving popular. Instead, consumers were shifting towards visiting stores to try out electronics prior to buying them.

By 2006, DELL were far behind their competitors. They were seeing their market share eroding by the month. With the business floundering, founder Michael Dell stepped in, deciding to return as CEO.

Dell engaged in a cost-cutting drive, with call centres being moved abroad, and 10% if the DELL workforce being made redundant. Several factories were closed, with customisable computers now considered a thing of the past.

There was an initial upturn in fortunes. However, further problems arose though, with consumers moving towards tablets in the early 2010s. DELL were unprepared for this, with Apple’s iPad proving very popular.

There were also continuous customer service issues. The term “Dell Hell” was a popular Google search due to disgruntled customers voicing their disappointment.

Comeback

After a few years in the wilderness, DELL eventually were able to make a comeback. Original founder Michael Dell spearheaded a leveraged buyout deal for $24.4billion in 2013. This led to DELL becoming a private company, taking it off of the stock market.

In the years since then, DELL have been able to return to stability. In 2016, they received a big boost following the $67billion acquisition of EMC Technologies, resulting in a more diversified product range.

DELL currently has a huge range of products. They continue to sell personal and business computers. Servers, televisions, printers and monitors are among the many areas that the company are succeeding in.

The Takeaway

DELL continues to be one of the largest technology companies in the world, and continue to soldier on. After an incredible start to life as a company, DELL did suffer a downturn in fortunes, but they are battling back.

Michael Dell deserves considerable credit for the job he has done for the company. He is an inspiration for anyone that wishes to open up their own business. As his Tweet below shows, things could have ended up so differently.

His parents will be thankful that they allowed Dell to start his company, while Dell himself too was pleased. But it also resulted in a company that would have many happy consumers. This looks set to continue.