Dell CEO Kevin Rollins is just now starting to step out of Michael Dell's shadow and into the limelight.
It has been six months since Rollins took the reins at the PC giant after its namesake founder stepped aside as chief executive. In that short span, IBM has more or less bowed out of the PC business ("waving the white flag," Rollins said), Hewlett-Packard has realigned its PC business, and Apple Computer has reignited public attention with budget-minded Macs and iPods.
Rollins says he is comfortable being the public face of Dell but claims he has no ego or need for fame. When asked if he wants to become part of the tech billionaire group occupied by the likes of Microsoft Chairman Bill Gates and Dell, he says: "That's a unique group. I don't even aspire to that."
So what makes Rollins tick? Outside of Dell he is a classically trained violinist who plays in public several times a year. He races motocross motorbikes and likes to go skiing. He's also a keen fan of history books who has taken a recent interest in the founding fathers of the United States and likes to read about political leadership in times of crisis--not a phenomenon that can be applied to his situation at Dell, a company that continues to consistently outperform the rest of the market and beat analyst expectations.
We caught up with Rollins last week, on a visit to Dell's enormous sprawling headquarters just outside Austin in Round Rock, Texas. A breezy, youthful-looking Rollins, sporting a casual open-necked shirt and a pair of modern black-rimmed "new media" glasses, fielded questions in a plush wood-paneled executive meeting room.
We asked about his views on everything from the Chinese technology market to Apple and the iPod to the Republican Party.
Q: Your current target is to double the size of the company from $30 billion to $60 billion. But is there a limit on the size of Dell? And how big do you see Dell becoming? Do you have a vision of a $100 billion company?
A: We have not launched publicly what is the next step. What I can tell you is that I have not found the end. We own 18 percent of just the PC business. Now that's only about 60 percent of our business today. But if you look at that business alone, at 18 percent is it conceivable to double the size of that business? Yes, 36 percent market share is not irrational. That would take us this year from $50 billion to $100 billion. Now will we do it? I don't know. It's very hard to do, but it's not irrational.
What would stop you achieving that? Where are the weaknesses?
The weakness in the company is if we fail to execute. What we learned several years ago was that one of our weaknesses would be if we didn't develop enough people with the know-how to run our company, it would come to the point where we would just stop. There would not be enough talent that's educated, developed and ready to take on the next leadership challenge, and it would cap our growth. Now we've put programs in place not to have that happen, but that could be a weakness.
The iPod has been out for three years, and it's only this past year it's become a raging success. Well, those things that become fads rage, and then they drop off.
After the IBM-Lenovo deal, how much room do you think there is for further consolidation in the PC market?
I think the economics of our competitors--the fact that no one else is making any money--is going to drive the consolidation. IBM reported in the last three years that they lost $1.1 billion in their PC business. That's the reason they got out. I don't know who (else) will get out, but I do believe we will see continued consolidation. You cannot have companies where many of the largest ones lose money indefinitely without someone finally waving the white flag, and IBM is the most recent example of that.
Do you think the HP-Compaq merger has been a success? And if not, why not?
Well, you would have to say what is the criteria to determine the success of any merger? It would have to be that the companies are stronger financially, that they took market share, and they are on a very steady footing in terms of their performance. I think you have to ask yourself the question of whether those criteria occurred in the case of the HP-Compaq merger. I think they've done a nice job of trying to integrate the companies, but they are in a very, very tough industry, and at just about the time they got the thing integrated and took all the cost out, they were right back in the situation where they don't make very much money.
Would you consider growth by acquisition a strategy for Dell? Will you be a consolidator?
I think not, and the reason is our organic growth has been very good, somewhere between 17 and 20 percent each quarter. And our size: The company this year is going to be close to $50 billion, so if that's the case and you can continue to grow that fast, I would rather put my energies to solving customer problems and growing our business than worrying about integrating and laying people off.
Will China surpass the United States as the dominant technology nation?
In the market it probably could; there's so many people there. Obviously I'm an American, so I'm going to feel pretty strongly about the U.S. being able to keep its competitive edge. But there are a vast number of people who are very educated, very talented who will compete aggressively. Now, for Dell that doesn't have much of an impact because we're going to compete everywhere, but that's more of a country-to-country competition.
How important do you think the role of consumer electronics is to Dell's business?
Consumer electronics is a challenging one. It's very interesting. Everyone wants to talk about it, and right now music, flat-panel televisions, a whole host of new handheld devices are fun to talk about and very exciting to look at. Our mindset always says it's not how big the market is but how profitable it can be as the key determiner of whether or not we want to be in it.
I think right now the jury is out on where and how much profit is available in the consumer electronics industry, because if you look at the current consumer electronics players, the biggest ones on the planet struggle to make profit consistently. If they can't make it being very large, sophisticated, entrenched players, what will it look like now that everyone else is getting into this business? It might make it very, very tough.
(AMD's) technology in many areas was leading. But those are transient.
Do you resent the amount of publicity Apple gets given its market share?
Apple's created a niche. If you look at the grand scheme of things, this quarter we are supposed to achieve something like $13.5 billion in revenue. Apple's in the $2.4 billion (region), so the size and scale is not even in the same league. But what they do they do very well, and they've had great success with the iPod. It's interesting: The iPod has been out for three years, and it's only this past year it's become a raging success.
Well, those things that become fads rage, and then they drop off. When I was growing up there was a product made by Sony called the Sony Walkman--a rage, everyone had to have one. Well, you don't hear about the Walkman anymore. I believe that one-product wonders come and go. You have to have sustainable business models, sustainable strategy. But don't read that as any sort of disparagement of Apple. They've done a nice job.
What's your take on Apple's new Mac Mini? Will it have any effect on the PC market?
It looks like an interesting new product. It might take some here and there, but Apple's market share in the global computer business has really shrunk pretty far, and where they've been making success recently is not in the computer business but in the iPod music business. So this might be an interesting new product, but I don't really believe this is going to turn the industry upside down.
You've dropped hints about Advanced Micro Devices over the past few months. Can we expect to see a partnership with AMD this year?
I don't know. I'm the one who made many of the bold comments that we'd seen the technologies from AMD as pretty good. Their technology in many areas was leading. But those are transient. You have one quarter (when) one company is ahead, and the next quarter someone else is ahead, so we just made a statement of what we saw at the time. Intel's still our main partner. We have not announced anything with AMD and don't have anything planned, but we're constantly being aware to make sure our customers get the best technology. And when the customers demand technology we move and adopt it. And right now since we're focused mostly on corporations they are not demanding it.
Are you Republican or Democrat?
I actually give to both sides, but I am probably leaning more towards the Republican side. I believe that because predominantly I am an open market individual--I don't believe in closed markets and I was starting to fear that maybe with the challenges President Bush has his competitors would close the U.S. market down and be protectionist and weren't going to foster growth and open trade the way we need to do in this country.
Dell was one of largest corporate donors to the tsunami relief effort. What role do corporations have to play in these types of situations?
We're just very proud that we could even help. We think we have a responsibility. And I think it's important for all of us in the Western world to realize that we've all been blessed a lot and if you go to these parts they don't have a lot, even before the tsunami. I think we all personally need to do that, and if companies can they should help too.
How does that sit with the shareholder ethic?
We used some amount of shareholder money, but we've asked our employees to give too...So it's a joint effort. Our shareholders look on that and they say that's fair, we'll give in some. I think they are proud of what we have done, and I know our board of directors is.
Andy McCue of Silicon.com reported from Round Rock, Texas, where he traveled as a guest of Dell.
... not Red Rock, where's Dell's located. One would expect CNET to be more careful about silly inaccuracies like these ! After all, this reporter is supposed to have interviewed the CEO at that location itself !
I think it's very Ironic that someone from a company like Dell would criticize Apple... They make a great PC - but everything they sell is pretty much the same as everything else out there... What have they ever produced that was "innovative" or "trend setting"? It's great to gloat about how many billions you are making - it would be even better, though, if you spent at least a LITTLE effort building something other than a "ME TOO" product.
i agree! all PC companies pretty much make the same thing. there is marginal difference in quality across the board. you can get lower quality computers and you can get better quality ones, but they're only going to be so good. they're all selling the same thing. its the asthetics that differ, ever so slightly. some companies put lights in their cases, or route the cables so as to maximize air flow, but really these are trivial things.
I think it's very Ironic that someone from a company like Dell would criticize Apple... They make a great PC - but everything they sell is pretty much the same as everything else out there... What have they ever produced that was "innovative" or "trend setting"? It's great to gloat about how many billions you are making - it would be even better, though, if you spent at least a LITTLE effort building something other than a "ME TOO" product.
"everything they sell is pretty much the same as everything else out there"
So then what exactly is Apple manufacturing that does not also handle the same functions as "everything else out there". If I am correct, Apple is not the actual "innovator" in any of the products they are currently getting attention for.
They have always done a great job of "re-thinking" products, but I think their last truly innovative product was probobly the Newton, which of course was ditched based on reasons very similar to the criteria Rollins says keeps them from digging to deep in the CE arena.
"Trend setting" of course is a different story. Apple clearly excels in this arena and is probobly the context most appropriate in their regard.
Everyone in the computing industry creates "ME TOO" products. Some just are better at it.
So, that mouse your holding in your limp-wristed right hand wasn't an innovative idea. Apple ripped it off of someone else back in the early 80's. right? The user interface they built into the iPod isn't innovative at all either. All of those companies that TRIED to rip the UI off the iPod actually did it first. right?
And I suppose, next your going to tell me that the Cases of the PowerMac G3's didn't innovate the way wire management and space inside of cases are used today, did they? Or the fact that the cases themselves wren't big ugly boxes.
Yes yes. The people responsible for building the first personal computer with a friendly UI 20+ years ago didn't innovate or invent at all. You are SOOOOOOOO correct.
yes apple's products do the same things as their PC counterparts, but apple does so with more grace. that is partly fact, partly my opinion. i use both. normally a PC since those are more popular.
for instance: the PC world is just now getting to a point where you can keep your computer for more than say 2 years before it needs replacing. apple has made computers with a much longer useable life for years! think about this: there is a reason apple can come out with a "new" computer (the mac mini), and not have to put in all the latest stuff and still expect to sell it. that is because even their older computers are still kicking and doing everything their users want to do, while PCs of an equal age may be struggling.
Dell, HP, Apple, and the other "PC" makers are in the business of making appliances, the equivalent of refrigerators and stoves. The core technology in these appliances hasn't really changed much in 30 years. Smaller for sure, but not any "smarter". If and when someone can develop and sell a device that can execute original problem detection and solving rather than monkey in and monkey out, then it may be fun and interesting to care what CEO of that company has to say. But as long as these appliance makers are making money and are able to employ folks, they should be encouraged. Just like the makers of stoves and refrigerators were encouraged.
The question about Apple was put in such a way as to encourage an aggressive comeback. Of course Rollins is just plain wrong about Sony's Walkman. It led the market for much too long to be dismissed as a fad. Disc players by other companies even came to be referred to as Walkmans. Apple should be so lucky with the iPod.
Dell may indeed be doing very well as a business. But, so is Apple.
Apple is out of touch with what the majority of consumers
I notice with partucular interest that the pro Apple replies have such vehemence and snobbery that are worse than angry reactions in a polotical debate.
Personally I have respect for every manufacturer or company from Apple to Dell that are succesful in today's exceptionally tough market since that means that millions of people have voted for them in terms of what they achieved in their products.You can't argue against such great numbers.
Unless some people think that only they have the right judgement in choosing what's best,in which case,they need to have their head examined.
Well the people don't think Apple is doing as good a job as Dell judging from their market share and the difference in percentage is huge.And they are right since Apple are overcharging and their models are far behind in computer power especially gaming wise.In fact in the latter respect Apple is sadly low.When I enjoy an Nvidia FX 6800 in my PC being able to play games of the quality of Half Life 2 or Doom 3 my Apple owning friends are just envious when they are given archaic Nvidia cards like 5200 Ultra and they can play nothing.And at what a price they got that totally outdated system!
Stability?Well even though I'm a Linux supporter,Windows XP with the Service Pack 2 is a serious operational,ever since installing it I haven't had the shadow of a problem.
Finally,Linux,especially Suse 9.2 is as good and fast and rock solid as Macos or even better and it is either free or very cheap.
PC processors,especially AMD 64 have been found to be faster than G5 ,much faster,and finally there are motherboard giants like Asus and Abit that manufacture fantastic mobos that enable me to burn dvds in 12 minutes tops.
Apple may have been leading in the past and I'm respectful and aware of its history and contribution to technology but nowadays it is only appearance and no essence inside and at exorbitant prices in times of great financial crisis all over the world.
Is for these reasons that I find it hilarious that some elitist people,probably rich,who are way behind in technological advances input,come here to defend an elitist company,perhaps for psychological reasons of inferiority complex.After all one has to justify why one has an Apple these days,isn't that so?
how can he say that? the walkman spurred on an entire industry! Ugg boots are a fad! walkmen are lengendary. the same goes for the iPod. it is a continuation of sony's legacy in portable music players. there's not a chance in France we'd have access to such inexpensive hard-drive based music players if it weren't for the iPod. it's imitators struggle to attain the same image and quality that enjoys. this makes for copy cats that sell for much less, for those so inclined. it's impact will be felt for quite some time. no fad has this much influence. not even Ugg boots.
And so at last Dell fell from the crushing weight of the lands of Lenovo which held total control of the motherboard supply and the unbelievers rejoiced. But all was not lost, for from the ash rose an Apple. The Apple gazed down upon the unbelievers and cast Tigers and Spotlights upon them. For Apple had been reborn with its strength renewed, and the infected followers of Mammon cowered in horror.
Dell faces a tidalwave of competition from Asia on the hardware front. Their sales model is quantity and cost. Dell has nothing else to differentiate it from Lenovo or any of the multiple others coming down the line. If China decides to use creative supply side economies raising the cost of boards and boxes to favor her own national brands Dell will no longer be able to compete in that segment.
P.S. This was posted on my NeXT Turbocolor station running at 33 Mhz Openstep 4.2 with Omniweb 3. :)
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"everything they sell is pretty much the same as everything else out there"
So then what exactly is Apple manufacturing that does not also handle the same functions as "everything else out there". If I am correct, Apple is not the actual "innovator" in any of the products they are currently getting attention for.
They have always done a great job of "re-thinking" products, but I think their last truly innovative product was probobly the Newton, which of course was ditched based on reasons very similar to the criteria Rollins says keeps them from digging to deep in the CE arena.
"Trend setting" of course is a different story. Apple clearly excels in this arena and is probobly the context most appropriate in their regard.
Everyone in the computing industry creates "ME TOO" products. Some just are better at it.
And I suppose, next your going to tell me that the Cases of the PowerMac G3's didn't innovate the way wire management and space inside of cases are used today, did they? Or the fact that the cases themselves wren't big ugly boxes.
Yes yes. The people responsible for building the first personal computer with a friendly UI 20+ years ago didn't innovate or invent at all. You are SOOOOOOOO correct.
Where do you people come from?!
for instance: the PC world is just now getting to a point where you can keep your computer for more than say 2 years before it needs replacing. apple has made computers with a much longer useable life for years! think about this: there is a reason apple can come out with a "new" computer (the mac mini), and not have to put in all the latest stuff and still expect to sell it. that is because even their older computers are still kicking and doing everything their users want to do, while PCs of an equal age may be struggling.
just my thoughts
making appliances, the equivalent of refrigerators and stoves.
The core technology in these appliances hasn't really changed
much in 30 years. Smaller for sure, but not any "smarter". If and
when someone can develop and sell a device that can execute
original problem detection and solving rather than monkey in
and monkey out, then it may be fun and interesting to care what
CEO of that company has to say. But as long as these appliance
makers are making money and are able to employ folks, they
should be encouraged. Just like the makers of stoves and
refrigerators were encouraged.
Or perhaps it was merely CEO type envy when he trashed another company's successful product.
Regardless of his motivation(s), Mr. Rollins needs a reality check. A visit to one of Apple's fine retail stores should serve the purpose.
Dell may indeed be doing very well as a business. But, so is Apple.
have owned several Dell's...all crap), cookie cutter computer
manufacturer.
Personally I have respect for every manufacturer or company from Apple to Dell that are succesful in today's exceptionally tough market since that means that millions of people have voted for them in terms of what they achieved in their products.You can't argue against such great numbers.
Unless some people think that only they have the right judgement in choosing what's best,in which case,they need to have their head examined.
Well the people don't think Apple is doing as good a job as Dell judging from their market share and the difference in percentage is huge.And they are right since Apple are overcharging and their models are far behind in computer power especially gaming wise.In fact in the latter respect Apple is sadly low.When I enjoy an Nvidia FX 6800 in my PC being able to play games of the quality of Half Life 2 or Doom 3 my Apple owning friends are just envious when they are given archaic Nvidia cards like 5200 Ultra and they can play nothing.And at what a price they got that totally outdated system!
Stability?Well even though I'm a Linux supporter,Windows XP with the Service Pack 2 is a serious operational,ever since installing it I haven't had the shadow of a problem.
Finally,Linux,especially Suse 9.2 is as good and fast and rock solid as Macos or even better and it is either free or very cheap.
PC processors,especially AMD 64 have been found to be faster than G5 ,much faster,and finally there are motherboard giants like Asus and Abit that manufacture fantastic mobos that enable me to burn dvds in 12 minutes tops.
Apple may have been leading in the past and I'm respectful and aware of its history and contribution to technology but nowadays it is only appearance and no essence inside and at exorbitant prices in times of great financial crisis all over the world.
Is for these reasons that I find it hilarious that some elitist people,probably rich,who are way behind in technological advances input,come here to defend an elitist company,perhaps for psychological reasons of inferiority complex.After all one has to justify why one has an Apple these days,isn't that so?
Walkman...
He's just trying to take some wind out of Apple's sails, but he's
not fooling anyone.
Dell faces a tidalwave of competition from Asia on the hardware front. Their sales model is quantity and cost. Dell has nothing else to differentiate it from Lenovo or any of the multiple others coming down the line. If China decides to use creative supply side economies raising the cost of boards and boxes to favor her own national brands Dell will no longer be able to compete in that segment.
P.S. This was posted on my NeXT Turbocolor station running at 33 Mhz Openstep 4.2 with Omniweb 3. :)