Dell Computer: The House of Idea

by , 9:40 AM EDT, April 9th, 2001

What really surprises me is that Dell Computer employees unabashedly brag about their company's lack of technological innovation.

It was October 2000. I was sitting in the lobby of a local business, waiting to meet with a client. With time to spare, I browsed the October 2000 issue of Fortune magazine. It featured a cover story on Dell Computer. This was a few months before we began to hear the incessant reports about the PC industry's sales drought, before Dell made news earlier this year by laying off a 1,000-plus employees.

Later, after reading that article again, I penned an earlier version of the column you have before you. I never published that column because I felt that Dell had no significance within the realm of things Macintosh.

Of course, that changed last week.

By now, I'm sure that you have heard about comments made by Michael Dell and Dell Co-President Kevin Rollins. The gist of their comments: Apple is doomed, so sell all of your Macs and replace them with PCs -- Dell PCs, in particular.

Of course, we've never heard such comments before.

There really isn't any need to bash Dell or its leadership; we already know the reasoning behind their criticism: Dell daren’t compete with Apple on the basis of “irrelevant” criteria like 1) which machine is the better built? 2) which company brings the better value? Ad hominem attacks, though intellectually lazy and bereft of any real logic, are easy hurled; good, ole FUD is very effective, regardless of the veracity of its claims.Why let a few facts get in the way?

What interests me aren’t the comments that have been made against Apple. There is nothing new there (remember, it was Michael Dell who said, a couple of years ago, that if he were in charge of Apple, he would do something along the lines of selling the company and giving the money to the shareholders). What interest me is the following comment he’d included in his latest round of Apple bashing, courtesy the April 16 issue of BusinessWeek: “It's not to say that Apple's products aren't innovative or cool,” Dell said, “but the economic factors here are so overwhelming, it's very hard for them to swim against that tide [of Wintel ubiquity].”

Herein lies the main reason why the market will allow both Dell and Apple to prosper in the future. Here me out.

In the midst of the glowing story reported in the October 2000 issue of Fortune, one cogent observation was weaved within the reportage on Dell’s rise to prominence: “’Dell's legacy is not technological brilliance,’ says Fortune writer Betsy Morris. ‘It is managerial brilliance.’”By contrast, Apple’s legacy isn’t managerial brilliance; it is technological brilliance. In recent years, however, it can be argued that the company is attempting, under Steve Jobs’s watch, to create an balance between innovation and balanced books.

I don’t believe that Dell will ever reach a similar equilibrium. Dell doesn’t have to in order to survive and thrive. Technological brilliance isn’t needed to assemble beige boxes, which is all that Dell does. This is why Dell will not displace Apple totally. For the segments of the buying public (say, the education sector) that want the cheapest PC solutions, there will always be the Dells of the world. For those who understand the Macintosh advantages -- and education has always been more hip to this than other segments -- Apple will continue to enjoy a dedicated user base. There is enough money in both segments to sustain both of these visions of the PC.

Nevertheless, some companies will always buy the “safe” solution. Others will always buy the best solution. Why, even Dell admits that its job is to sell its customers a pre-packaged status quo. Dell’s Mort Topfer:

"We know what we are and what we're not. We are a really superb product integrator. We're a tremendously good sales-and-logistics company. We're not the developer of innovative technology."

As Fortune wrote: “A Dell mantra is that today's technology is tomorrow's commodity. Dell waits until the cost of that technology falls low enough for it to be stuffed into computers at state-of-the-art factories and then sold direct at a cheap price, which allows the company to drive for share.”
Well, someone has to create tomorrow’s commodity. Who else in the industry is doing it? Who brought USB (a PC invention) to widespread use? Who implemented FireWire? Who first introduced wireless LANs? Who's pushing towards the grand convergence dubbed the "digital lifestyle"?

The answer is Apple, natch.

It won’t be Dell, per the comments above. Therefore, the industry needs Apple, regardless of the belittling statements made by Apple’s competitors. The fact that such a “small” company as Apple attracts the attention of a “giant” like Dell should be all the evidence one needs to prove which company is the least significant.

If Apple were truly insignificant, nothing would need to be said against the company. It would surely die a quiet and unnoticed death (btw, if Dell disappeared, who'd notice it in, say, 10 years? If Apple went away, who'd notice in 10 years? :-). Dell’s “superior products” alone should stand as prima facie evidence of who’s the king of the mountain. And the buying public would be able to see clearly which company should be known as the House of Ideas and which should be known as the House of Idea.

Sources and works cited:
"Anti-Apple Rhetoric: A Barometer for Apple Success," 4/9/01 Yahoo.com
"Michael Dell wants it all," "Can Dell escape the box?" et al, Fortune, 10/16/2000
"Dell tries to nab more schools from Apple," C|Net

Other recent TMO articles on Dell:
"Dell's Spring Fever for Apple" Friday, April 6th, 2001
"Slanted Report Touts Dell's Assault On Apple's Education Sales" Wednesday, April 4th, 2001