Network World, 01/04/99

MICHAEL DELL CEO, DELL COMPUTER

Michael's Dell story is one of those computer industry legends, like Apple and Hewlett-Packard being formed in garages and the first Compaq portable being sketched out on a napkin. With a thousand bucks and a lot of chutzpah, plucky Dell in 1984 founded his direct-to-the-customer PC business from his dorm room at the University of Texas in Austin.

But forget the legends. Dell has turned his company into a $15 billion-plus industry giant that not only continues confounding Wall Street, but keeps shaking up rivals as well.

But why is Monsieur Dell on this enterprise network power list? Two reasons.

Not content to own a big chunk of the desktop business, Dell set his sights on the server market and has quickly become the No. 2 player. His aim: to unseat market leader Compaq by driving down prices and margins by eliminating the middleman.

Dell believes that Compaq's higher server margins are helping the company survive the brutal price and margin battles in the desktop arena, and he wants to take that crutch away. That's good news for server buyers. While Dell has taken most of his growth so far out of the hides of other server competitors, you can expect the Lone Star State battle between Houston-based Compaq and Austin-based Dell to get meaner than a stepped-on rattlesnake.

Unlike his counterparts at Compaq, Dell has little interest in buying up network companies to expand his product line. But make no mistake: Dell clearly views networking - of the e-commerce variety - as his ace in the hole. The company is one of the early leaders in Web selling, garnering some $10 million daily in online sales. That's not as robust as Cisco's e-commerce efforts, but it 's better than virtually everyone else.

DELL'S CHALLENGE: For the coming year, Dell must continue the phenomenal growth that has put his company on the radar screens of so many IT buyers - no small task. He'll also have to push hard to keep gaining ground in the server market against Compaq, which is wrapping more network products and advanced support services around its boxes to give enterprise buyers a secure feeling.

Prior: Crowe

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