Here comes the new boss — literally, the same as the old boss. Michael Dell, founder of Dell Inc., reclaimed the CEO position, as his longtime #2 guy, Kevin Rollins, left the company. Rollins took over the command chair in 2004, and led Dell Inc. through some tough times.
What does this mean? Well, a couple of years ago, Dell looked like a miracle company. Today, it’s still a top computer provider, but it’s no longer evident that its direct-sales model will drive the company’s growth. Commodity desktops, notebooks and servers, yes, people will buy them, sight unseen, based on the specs and price. Televisions and music players? That’s a different story.
A couple of years ago, Dell was the top PC maker. Today, HP is. Meanwhile, Dell is plagued by concerns about its customer service, after a disastrous experiment with outsourcing and a number of battery recalls. And the SEC has some questions about Dell’s accounting, and NASDAQ isn’t happy.
The most recent numbers weren’t great, and Dell’s stock (as of the time of writing) is at $24.22 per share, down from its 52-week high of $32.24.
The most recent quarterly earnings report, from November 2006, had this statement:
Company Outlook The company said that the actions it has taken to drive improved operating and financial performance long-term with a better balance of liquidity, profitability and growth are starting to take hold. However, in the near term, improvement in growth and profitability may not be linear due to a variety of factors, including the timing of continued investments in Customer Experience, global expansion, and new product introductions, as well as a muted seasonal uplift due to changes in the mix of product and regional profit. In addition, the fourth quarter of fiscal year 2006 included one extra week.
Were all the problems caused by Kevin Rollins? Will Michael Dell (pictured) turn around the beleaguered computer giant? We’ve seen that a shift in CEO can work miracles — see the astonishing reinvention of HP, for example, after Carly Fiorina’s departure and Mark Hurd’s ascension. Dell needs that kind of miracle.