Michael Dell: “Avoiding the Internet no longer an option.”

This post was originally written on Thursday, 28 September, 2000 (twenty years ago today!) and published online by Gorilla Asia. Since then Gorilla Asia went under, as did many tech initiatives during the Dot Com Bomb. Here is the throwback with edits twenty years later.  

According to a new “e-census” conducted by the University of Texas only a handful of today’s businesses scratch beneath the surface to use the full potential of Internet technologies. Michael Dell, speaking at Wednesday’s American Chamber of Commerce Leadership Series in Hong Kong, says that’s not good enough. Avoiding the Internet is “no longer an option”. Using online technologies, according to Dell, makes companies more efficient, removes the friction of traditional business methods and increases the velocity of business. Dell’s message was familiar: get into e-business or you’ll be out of business. With over $50 Million USD being conducted per day at Dell.com, Michael Dell knows something about e-business, too. [2020 edit: Based on Dell quarterly revenues, that number is now at least $233 million per day, more than a 4X increase in 18 years. Meanwhile, CRN reports that 65% of companies use the Internet of Things however not all companies are there yet. As of 2020, 36% of US small businesses didn't have a web site: still avoiding the Internet. And, of companies embracing digital media strategies, 49% are not doing so in a plan-ful manner.]

Everyone knows Michael Dell (in fact I am adding value to one of his computers right now), at the helm of Dell Computers, a company sixteen years old that this year will surpass $33 billion USD in revenues. Worldwide the company has 12% market share (5% in Asia Pacific) and an ROI of 294% that Dell claims comes as a result of integrating the Internet into business. Dell is one of the pioneers of integrating suppliers, customers and the Internet into one chain. The company is on a torrential growth path, and judging by Michael Dell’s wit and passion at Wednesday’s AmCham lunch, there is no end in site. [2020 edit: Since 2000, Dell (now 36 year old company) has been on a roller-coaster ride but today is still hugely successful. Michael Dell took the company private through a complicated leveraged buyout in October 2013. Two years later the private Dell bought EMC for $67 billion—the largest-ever technology industry acquisition. Indeed, there was no end in site. 2019 annual revenues exceeded US$ 90 billion dollars. But Dell didn't keep me as a customer. Lenovo nabbed me and lasted seven years with a hard drive refresh. Alas, HP's latest touchscreen PCs won me over both at home and work. HP's desktop is like an iPad and PC all in one, but Lenovo won me back with a very fast touchscreen Yoga laptop.] 

Creativity lies at the source of all sustained growth. That is a philosophy Dell believes in, too. Dell attributes his company’s success to being a disruptive innovator, claiming his company has been “draining industry profit pools towards more productive means” from the beginning. (At one point Dell quipped, “in fact, we’ve been assisting IBM with the decline of their PC revenues,” as if to suggest Big Blue had hired Dell to do the job!) Dell added that open architecture always wins in the end, even if proprietary technology looks more attractive in the beginning. But the future of the personal computer is intact, for the time being anyway, since Dell claims, “the Internet is only as powerful as the device it gets delivered on.” [2020 edit: Perhaps Dell won this battle... IBM no longer makes computers. Having sold its PC business to Lenovo in 2005, IBM now only makes mainframes, loads up on services and revenues have struggled for several years. Lenovo on the other hand has raced away with great products.)

So, what is the future according to Dell? Michael Dell claims that wireless technologies and storage are the way of the future. Dell even went so far as to say “the biggest beneficiaries of wireless will be Dell Computers.” Dell explained how wireless data networks pose a tremendous opportunity that will pave the way for VOIP and drive traditional phones to extinction. [2020 edit: Dell was right about traditional phones!]

“But what about PDAs?” Dell was asked by the audience, to which he quickly responded that PDAs are extensions of PCs… “Personal computers are not going away.” (So much for my Kiss Your PC Good-Bye Article!)

Managing a company of Dell’s size must be tough in such a rapidly changing environment, especially when the company hired 10,000 staff in the last year (2000) alone. To this Dell offered excellent advice for managers and leaders needing to communicate business strategy to their organizations. First, there are plenty of messages to deliver to an organization but prudent leaders only select one or two most important communications. Otherwise employees will hear too many confusing and possibly conflicting messages that could too easily be reduced to the “flavor of the month.” Second, the top messages should capture and focus on the company’s strategy, goals and vision for the year. Third, reflect and reinforce these messages in all management actions. Finally, acclimate employees to new things and change while delivering the top messages.

Responding to the question, “How can Hong Kong become a regional and global leader in e-business,” Dell offered the following advice.

First, focus on education because the educational system is the feeder system for any society’s future. Dell advocated teaching children computer and Internet skills at a very young age, and making the absolute best technology available for those involved in higher education.

Second, “drive as many methods as possible to the technology.” In other words, make the Internet and all related technologies easily accessible. This includes shaving down the cost of access as low as possible to make Internet technologies available to all socio-economic levels of society plus heavy private and public sector investment in infrastructure. Dell even proposed public access to the Internet to increase availability for those who find the Internet out of reach despite society’s efforts to reduce costs.

Finally, Dell emphasized the importance of a “continuous learning approach.” With rapidly changing technology, society needs to be oriented around change with a willingness to learn about the next wave of technology.

Dell’s speech was compelling, refreshing and with 33% growth and 294% ROI, I’d probably be that happy, too! The American Chamber of Commerce luncheon speaker also took a moment to acknowledge four Asian companies Dell had invested in: Sina.com, TurboLinux.com, TechPacific.Com and iLink.net. [2020 edit: Twenty years later the numbers might be bigger but the concepts are similar. Meanwhile Dell has tripled its growth. But not all of the investments paid off. TurboLinux ceased operations on 31 December, 2019. On March 31, 2005, the Tech Pacific name disappeared with the completion of the merger of Tech Pacific's business into Ingram Micro throughout Asia. Sina is a going concern but iLink is a bit of a ghost.]