Dell: one company, two CEO's: Michael Dell knew he couldn't manage alone. So he's struck a partnership with Kevin Rollins - related article: Dell on Dell's Future - Interview - Company Profile - Cover Story

Chief Executive, The, Nov, 2003 by William J. Holstein

Rollins, a classical violinist and racer of Yamaha Motocross bikes, has extensive outside interests as well, including raising funds for the city of Austin to build a hall for its symphony orchestra.

The fact that the two men are able to share CEO functions--becoming what Dell people refer to as "two in a box"--allows each to maintain a bit better work-versus-life balance than many go-it-alone CEOs. They say their example of open communication and life balance filters down the ranks, shaping the culture of the company.

The power of manufacturing

The business results certainly speak for themselves. Dell, the company, says it will hit or surpass the $40 billion in sales mark this fiscal year. It is widely seen as just a personal computer company, perhaps because of its highly visible "Dude, you're gettin' a Dell" campaign. And Dell's success in this sector did help push Compaq into Hewlett-Packard's arms and the company continues to apply downward pricing pressure on the entire industry. Gateway also has been thrown on the defensive. But in fact, only 15 percent of Dell's worldwide sales come from consumers.

The larger and more important thrusts for Dell are into business, government and education. Whether they're engaged in high-tech braggadocio or not, Dell and Rollins say they don't see anything to stop them from reaching $60 billion a year in sales, most likely in 2006.

Dell says his company is now competing not just in the PC market but in the entire $800 billion-a-year information technology market. At the high end of that market, Dell is No. 1 right now in high-performance clustered server sales, relying mostly on Linux software. At the low end, Dell has just announced it will start selling consumer electronics products and even offer an online music service. In short order, the company is extending its direct-to-market sales model to sector after sector.

Of the total IT market, Dell says his company has just a 5 percent share. "One strategy to grow is you just go from 5 percent to 10 percent or even 15 percent," he says. "That's tremendous growth if you can achieve that." This ambition is one reason the company recently changed its name from Dell Computer to Dell, Inc.--it wants to sell more than just computers.

The company's rivals sometimes dismiss Dell as not really a technology company because it spends only 1.2 percent of annual sales on R&D. But where the company excels is at waiting for a new technology to blossom just enough that it's ready for a wider audience and then pouncing on it. Dell-watchers say this is the key to what Michael Dell does best. "The passion for fooling around with stuff has never left him," says IDC's DelPrett. "It's that vision thing for how technology will be used. That's not a vision that Kevin has."

Once Dell begins to incorporate a technology into its products, it relies on its manufacturing, supply chain and logistics strengths. The company argues that, on balance, it has a 15 percent cost advantage over its closest competitors and this is the strength that Rollins has largely been responsible for nurturing. "We manage the value chain better than anyone else on the planet," Rollins says, matter of factly. "The only one who might come close to us might be Wal-Mart."