Transcript of Dell interview on CNN's Moneyline:
cnn.com
DOBBS: "Fortune" magazine recently described Dell Computer as a runaway money
train, and a look at the company's stock performance shows why. Dell has soared a
staggering 6,400 percent over the past five years. That far outshines the NASDAQ's
own 120-percent gain and the average 423-percent gain for Dell's chief competitors,
which include COMPAQ, Hewlett-Packard, and IBM. But, recently, this Wall Street
superstar has stumbled a bit. Dell has actually dropped 18 percent from its mid-May
high and fell again today, along with the
rest of the market. However, we should point out that it has still almost doubled in
price so far this year.
Joining me now to talk about the challenges facing Dell, the company's founder and
chief executive officer, Michael Dell.
Good to have you with us.
MICHAEL DELL, CHAIRMAN & CEO, DELL COMPUTER: Thank you, Lou.
DOBBS: This is a blistering pace by any standard. Let's start out with can you keep it
up.
DELL: Dell has about 7 percent global market share, and we think we can continue to
grow much faster than the industry's growth rate. So by expanding our product
portfolio, particularly in the server, workstation, and notebook sector, growing
globally around the world -- we've got a brand campaign that we've launched -- we see
a lot of opportunity to grow much faster than the market.
DOBBS: Now your success in entering the workstation and the server market is
nothing short of spectacular. What do you think the upside is there for Dell Computer
-- a market you weren't in 24 months ago.
DELL: Well, these are very lucrative businesses. They have much higher margins than
the traditional desktop and notebook business. I should point out that, just in about
the last six months, we've become the number one provider of NT workstations in the
U.S. and the number two provider of servers in the U.S., surpassing both IBM and HP.
We've had growth in these businesses of in excess of 150 percent for now about
seven quarters in a row. To keep up this pace, I think it involves partnerships. We've
formed an alliance with Unisys and Wayne Global (ph) to provide services, and we've
also got a range of new products coming that are rack-optimized (ph) data center
oriented servers that really take us up into the mid-range space.
DOBBS: Your competitors are also combining. COMPAQ, DEC, a formidable force.
How will you deal with that combination?
DELL: I think this really provides unprecedented opportunity for us. This is going to
be a big distraction for these two firms as they put themselves together, and at exactly
the time when the world's going from closed computing to open computing, the
customer has more and more choices every single day about services, and we don't
think that's the right time to be bundling product and service together. So, in fact,
what they have done is turned a number of their alliance partners into competitors,
and these companies -- the IBMs, the Andersens, the KPMGs, Cap Geminis -- there's
thousands of firms that provide consulting services but not hardware -- are now all
working with us, and they view COMPAQ as their new competitor. So, again, I think
that and the tremendous difficulty in merging these two firms together will create a
huge opportunity for us.
DOBBS: A huge opportunity. It is also a time of great cooperation amongst
competitors. It's an industry, as you know very well, in which competitors and
cooperating partners seem
indistinguishable. Why do you see this as such a terrific opportunity at this point?
DELL: Well, let's remember that customers don't necessarily want to buy everything
from one company, and the problem is that if COMPAQ goes into the consulting
business and becomes a competitor of -- let's take for example EDS (ph). EDS is going
to be less inclined to want to recommend that their consulting customers buy their
products.
DOBBS: You say it's not a time when people want to buy from one source. In terms of
Microsoft, the antitrust case against it, what is your feeling on that case, and how
rigorously should the government be pursuing it?
DELL: Well, you know, I've been pretty vocal in my view on this, which is that I think
our government ought to be looking for ways to figure out how it creates more
companies that are as successful as Microsoft or Intel or Cisco -- or Dell, for that
matter -- because it helps reduce the deficit for every citizen in this country, not just
for those who work at Microsoft, and it's providing unprecedented productivity in our
economy which I think is fueling the stock market in large part and a lot of the growth
in the economy.
DOBBS: OK. Well, Michael, as always, pleasure to have you with us, and much
continued success.
DELL: Thank you.
DOBBS: Michael Dell. |
