Dell Redux and the end of an era
Last I heard, Ted Waitt was kicking back somewhere in a posh part of Southern California, living the high life that came his way from starting Gateway. I wonder what he thought about the news that his old company no longer would be selling computers directly to the public.
Former Gateway CEO Ted Waitt
(Credit: CNET News)Along with Dell, Gateway was one of the two companies most responsible for popularizing the idea of buying computers over the phone. But this week's about-face only put a long-expected coda on the final chapter of this story.
Now owned by Acer, Gateway lost its way years ago. Despite frequent course corrections along the way, Gateway couldn't stop the customer exodus. In the end, last year for a relative song ($710 million.)
Dell CEO Michael Dell
(Credit: CNET News)Hard to believe that at one point in the early 1990s, Gateway and Dell were roughly neck-and-neck. But Waitt, a charismatic operator, never matched Michael Dell as a business organizer. Both CEOs made their share of miscues, but Michael Dell always could tap a deeper bench. As fate would have it, both Waitt and Dell were forced to return as CEO because their chosen successors stumbled.)
Reading through the clips from that time, I came across this observation on Dell's return from Needham analyst Charlie Wolf:
"The return of the prodigal son has many precedents in American business. Steve Jobs returned to a company in shambles in 1997 but has since turned Apple into one of the great growth stories of the decade. Mark Hurd, though not a prodigal son, also took over a company in disarray and turned HP into a formidable competitor in less than two years. At the same time, Ted Waitt, Gateway's founder, was unable to return the company to its former glory when he came back in 2001 after a year's sabbatical."
Amen to that.
More than a year after returning as CEO, though, Dell seems to be settling quite nicely into the new/old role. He's also reportedly contemplating a renewed run at the digital music player business. (Here's more context on that story.) The previous attempt was a failure but I
still can't tell whether Dell Redux is going to turn out to be a success. But he's a survivor. And for old time's sake, it's good to see folks like him still taking center stage.
Charles Cooper has covered technology and business for more than 25 years. Before joining CNET News, he worked at the Associated Press, Computer & Software News, Computer Shopper, PC Week, and ZDNet. E-mail Charlie. 
"As fate would have it, both Waitt and Dell were forced to return as CEO because their chosen successors stumbled."
Well, Steve Jobs was fired from his created company by the CEO that he choose!
How do you compete in a market where the iPod and iPod Touch have so much market share? I mean it's so bad, you hardly ever see car stereos (OEM and after-market) touting anything but iPod connectivity, and what about the tons of stuff out there already cradling the iPod? You can't walk into Target without seeing a clock-radio with iPod connectivity, or a TV with iPod connectivity, etc. How does Dell convince manufacturers that Dell's PMPs also deserves supporting products?
Hey if Michael Dell can make it work, awesome - high risk, high rewards, right?
- by SlimGem July 31, 2008 6:17 PM PDT
- The best thing to happen to Steve Jobs was to get ousted from Apple. He then went on to develop Next, which would give birth to OS X. He learned well during his time away from Apple. Michael Dell and most of these others are one trick ponies. They couldn't innovate their way out of a paper bag.
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