Behind Dell’s snippy attitude
A couple years ago, right around the time Dell’s exploding laptop batteries were getting a fair amount of media attention, I had breakfast in San Francisco with a senior Dell executive. He was seriously annoyed by all the focus on Dell (DELL), even though his company wasn’t the only one with the spontaneous combustion problem caused by Sony’s (SNE) batteries.
I used, with little success, an explanation I like to give subjects trying to understand their media coverage. It revolves around a key scene in the fabulous Ron Howard movie “The Paper” in which a tortured city hall official pleads with a columnist to know why the latter is targeting the former in his columns. “You don’t get it, do you,” replies the news man. “It’s your turn.”
My point then was that Dell, which had been among the smuggest of successful companies — ‘Our business model is our innovation’ … Michael Dell saying in 1997 that if he ran Apple (AAPL) he’d “shut it down and give the money back to the shareholders” — was about to experience the reverse of adulation. When you brag on the way up your critics will gloat on the way down. The mistake is to think the media takes sides. Not really. It joins in the praise as well as the scorn.
Anyway, fast forward to 2008, and it’s interesting to see just how defensive and downright snippy Dell has become, having been humbled by the likes of once lowly Apple and the former PC industry doormat, Hewlett-Packard (HPQ). Michael Dell, the current and former CEO, clearly picked the wrong reporter to get his back up with when he told Ashlee Vance of the New York Times, “I don’t appreciate the tone of your reference,” in response to a question about Dell’s culture. (My only quibble with Vance’s article is that it doesn’t explain why acquisitions are necessary for Dell. I don’t doubt that they are. I’d just like to have had it explained to me.)
More recently, Dell has been publicly suggesting that it’s greener than Apple, using the kind of intemperate and schoolyard-like taunting one typically doesn’t see from Fortune 500 companies. (Read John Paczkowski’s spot-on overview, titled, “Dell Green, All Right — Green With Envy.”)
It’s easy to understand why Dell (the person and the company) are so sensitive. Its once world-beating stock trades where it did about 11 years ago. Its management has largely turned over. Its reputation lags the competition.
Will Dell have its turn to shine again? Most likely. First, though, it’ll have to lose the attitude. Then, when it starts to succeed again the ‘Dell is Back!’ stories will appear.
And the cycle will begin anew.
I once had a Dell inspiron 4 years ago. Granted my husband is an aerospace engineer, and is very proficient with electronics and computers. We never could get that thing to work right. After 18 months, the hard drive finally died on us. Sent it back to Dell, we had a 3-year warranty plan, but Dell insisted that the hardware failure was something they would not cover. The following year, we finally switched to an iMac as our family pc, and our family especially the kids have been satisfied since then.
Let us not forget that Mr. Dell said he would happily offer the OSX operating system on Dell Computers if Steve Jobbs would make OSX available for PC’s after the introduction after the Intel chips to Apple.
I have a 2500 USD Dell Laptop that I bought because I wanted quality that would last me at least 5 years. The hard drive is failing after 2 years. They are sending me a replacement harddrive for the laptop and they expect me to do the HD swop myself. They will not reimburse me to get my hard drive back up even though it’s their hardware failure. Also, they will not reimburse me the cost of having the Harddrive swapped if i choose to get a professional to do it. Their hardware is crap especially their hard drives. I’m thoroughly disapointed and will by a different brand next time.
Forget go West, go East. Start by sending Bush and Cheney to the Hague to stand trial for War Crimes against Humanity. That will bring the economy back.
Adam, the article by Vance did say why Dell feels the need to make acquisitions, i.e. they would like to diversifying their revenue base (away from commoditized hardware) towards software & services and its easier/quicker to do it through aquisition rather than developing capabilities from scratch
The problem with Dell and the like is that there is always someone else to get the same product from. They only assemble and install, there is nothing to what they put out onto the market that anyone with a little money and interest can not do at home.
The key to the success of any computer company is going to come down to a customer base that is well supported and appreciated.
I had very bad experience with Dell laptop. The hard drive died twice in space of 4 months. The battery died once. Their customer service/tech service sucks.
I have decided not to buy Dell products again in my lifetime.
This article is garbage. Did they get this writer from some High School newspaper?
Dell’s overseas call center support is the worst in the industry. Innovative? No, just cheap and ineffective.
Dell has fallen where all computer retailers fail: customer support. They start out promising and delivering superior support. But because there’s no direct bottom line profit, it’s where everyone cuts even though it’s that word of mouth on customer support that breeds loyalty and keeps them coming back.
I’ve needed support for my video drivers in my Inspiron E1705 for 2 years, but their foreign nation customer support can only read from a script that says there are a dozen choices. It doesn’t say which one I should use with what other drivers. So I have only the most rudimentary video capability. Because I wouldn’t sign off on “Problem solved” they deleted my entire customer support file. I have to start from scratch if I want help.
Dell didn’t just fall from the top of customer support; they strapped on jet engines and plowed to the center of the earth.
I’ve been a subject of Dell *ell. After buying eight Dell’s for a business, it gave me the unique opportunity to find out if an occasional failure of a computer is one of those rare unfortunate events or if the number of failures and problems would indicate a high probability of a company that sells products produced in such a way that failure is almost inevitable. But as one after another of the computers had problems and the support needed to fix them was too painful to deal with, I realized that it appeared something was very wrong with this company and I’d never buy another computer from them again. Too bad.
Dell is probably not in good shape now. Over the last years I bought 4-5 laptops from Dell for personal use or for business. Every time I was trying to find something better from competitors – no way to find better deal for the same tech characteristics and price.
Right now I have Latitude D830 with 1920×1200 resolution, 4 Gb memory. When I bought it this spring – there were no computer with tech characteristics for that price from companies including HP.
A hard drive failure is a hard drive failure, could have happened to a Mac as easily to a Dell. The true problem is Windows and not the hardware.
I think that when Michael Dell said what he said about Apple back in the days when Apple was a struggling company, the comment wasn’t a very big deal until Apple started coming back, and then that is when the cracks started to show in Dell’s reputation. Not to mention, that with every negative article about Dell, the writer always brings up that comment.
As the old saying goes, “What Goes Around….”
We need major improvements in laptop design. It’s absurd that you can ruin a laptop by tripping on the power cord.
Apple had a good idea–make the connector magnetic so that it pulls away.
The funny part about these comments is that people are blaming Dell for their “catastrophic hard drive failures”. Do I really need to remind you people that Dell didn’t manufacture the hard drive? Dell got them from an actual hard drive supplier that probably 50% of computer vendors use. I’m not a Dell fanatic or anything, (although I am a PC user) but it seems someone had to inject some sense here. This can and does happen to every computer vendor in the industry, including the almight Apple. Obviously the real issue is what happens support wise when something like this occurs and in my experience (Toshiba, Sony, and Gateway laptops) every computer vendor has questionable support. I have a friend who bought a new Macbook pro and after 2 weeks and 5 visits to the Apple “Geniuses”, the system still won’t boot without freezing. It sure looks perty though.
Dell customer service is horrible. Outsourcing caused Dell to fall as well as other companies. They outsource to India and other places and the people are given fake American names. They do not know good english and have poor quality. HP does the same thing and it is horrible. I think there needs to be more American companies that use high quality American workers. The whole outsourcing caused this recession and it is like giving away your car and expecting your car to still be there. The outsourcing caused people to get laid off and make lower salaries and spend less. Now companies expect people to spend the same amount or more money but in the end they caused this and should have higher ethics.
As someone who does some on-the-side computer consulting, I’d say Dell’s issues come from two major problem areas:
1) Slipping quality control
2) Poor quality customer service
I’ve had a number of customers who recently bought Dell systems for use in their businesses. A good number of them have had some sort of issue that should’ve been caught during the production quality control check. The most memorable is a Vostro (which was actually a lot of computer for its price) system that I helped my customer set up. I took the system out of the box and noticed that the media reader mounted in the 3.5″ bay had slipped down inside the computer. Upon examination, the device had never been secured at the factory, nor was its connector plugged in. This was an extremely simple fix for me, but for someone with little to no technical knowledge, it would be a big problem.
This is just one such issue. I’ve had a number of customers who were so frustrated with Dell’s warranty service representatives that they simply bought the hardware and paid me to install it. This does not bode well for Dell.
This is not to say that Dell is any worse than any other PC manufacturer out there, because they’re not. Most of the major brands have seen an uptick in quality control problems. Most of them have offshored customer support, as well. Here lies the problem: Dell no longer stands out. Dell’s systems used to be above-average in quality and they simply didn’t break very often. Their customer service also used to be second to none. No longer. In this industry, any company which does not stand out will not survive in the long run.
The REAL problem with Dell in the most sophisticated jargon possible:
Dell Stinks!
All the good stuff is Ancient History.
When Dell brings their support back to the USA, I’ll consider buying from them again. Until that time – HP!!
Considering what I’ve gone through with the last 3 Dells I’ve owned I find little wonder as to why they are where they are today. I’d owned Dells since the last 90’s, always gotten stellar service. But starting with a fussy machine in 2002 and with two more since then, the service I was getting was either incompetent or downright terrible. As of February I have a fairly trustable HP and a sweet (bought used) Macbook Pro. My Inspiron 9400, which looks to be my last Dell was eBay’d in June once it was clear it was no longer going to be used. Ahh well, it was good while it lasted.
Dell is not only a one-trick pony of making computer hardware on the cheap, it is tied to the crappy operating system from Micro$oft to have a computer.
Dell does not have the internal intellectual resources of a computer company, like Apple, HP, IBM and Sun.
Comparing Dell with any of the above computer companies is like comparing an Ass with a Horse. All the Ass knows is how to bray!
One of the many problems with Dell is their lack of respect for the consumer. They provider VERY VERY shoddy customer service. I have experienced issues with needing replacement parts that fail and then have problems getting them swapped again. My biggest gripe though is that I just purchased a $1800.00 XPS gaming system last year. Now this year I need to upgrade the Power Supply so I can get a new video card. Dell makes their computers so that I cant buy after market units. I am also having a hard time getting a larger rated supply from them directly so now I am almost stuck with a 1 yr old “high end” door stop
“Driving sales through increased perceived value (Unity) through innovation and marketing buzz.”
That should read (Utility) not (Unity).
Typing faster than I’m thinking.
)
The problem with Dell is that they assume price overrides all other factors in purchasing a PC. They took this model to it’s extreme, cutting margins to paper thin levels under the false pretense that market share will make up the difference. Anyone with an MBA will tell you that that model is doomed to fail, since demand has a finite level. Agents (customers) are a limited commodity. Once market saturation occurs the company is left with little to no growth.
Apple has taken a much different approach. Driving sales through increased perceived value (Unity) through innovation and marketing buzz. All the while commanding some of the highest margins in the industry. Apple doesn’t need to saturate the market and try to equal the PC industries market share. They simply need to grow at a slow and steady rate while maintaining the same factors that got people to buy their products in the first place. Once Critical Mass takes affect Apple will be larger than even Microsoft. It’s a socioeconomic trend that nobody but Apple can derail.
Dell will never be the same company they once were. Their brand is damaged goods in the minds of the public, and it takes decades (generations) to fix, if ever. You can only sell cheap toasters for so long. Someone else will always come along and build a better toaster and that creates huge shifts in substitution-demand. For a perfect example just look at the US auto industry in the 70’s and 80’s, and the shift in substitution-demand for Japanese cars where consumers would receive higher satiation and utility. The same effect is taking place in the computer industry with Apple.
I don’t get companies like Dell. What’s the difference between their computers and me going to Fry’s Electronics and buying all of the parts and putting them in a box and selling my computer?
Don’t they just buy parts from different wholesalers, put it into a box, install Windows and slap their name on it?
What is there to innovate? They don’t actually make anything as far as I can tell.
I’m probably wrong, but that’s the view from where I’m standing.
Arrogance seems to be the norm in the tech world. Look at Ellison, Gates, Balmer, and so on. They all think they are gods. They all aspire to global domination. They’re all highly competitive. So Dell has merely joined the ranks of the snippy, arrogant, God complexed, CEO’s around him. These men are all sharks. It’s what makes them good businessmen and lousy people. Gates seems to be the only one who has really mellowed over the years and developed a social conscience. His charity work is now more important to him than growing MSFT. And thank God for that. Maybe when Dell starts to consider retirement (or slowing down) he’ll become less arrogant and snippy. Until, it seems to be an unfortunate side effect of success. I recall a financial speaker once making a great observation… “If having money makes you happy, then why are most men with money such (fill in the blank)?”
Bruce’s experience is a perfect snapshot of what is wrong with Dell. All of his problems were deliberately and cynically managed into the process. I had a similar experience and I hope Dell dies a slow agonizing death, which is what it deserves.
I probably should have mentioned that I’ve recently had a catastrophic hard drive failure as well with my corporate Dell notebook. I don’t really think that has anything to do with the item I wrote. I did, however, start using a Macbook during the time I was waiting for my IT department to get me a new hard drive (still waiting — and praying — the data from my old drive can be retrieved). Let’s just say this longtime PC user (who was happy with a succession of Thinkpads) finally understands the Mac hype.
Dell’s problems don’t lie in their product, it holds its own and has for years. Their problem lies in the one area that differentiated them from the other commodity box dealers, Customer Support. At one time, they were rated number one in customer satisfaction; a title which was well deserved. But, that is no longer the case. If they want to get back to the number one position, not only will they have to continue coming out with the best products at fair prices, they will also need to find a way to get back what they lost, their service/support. Right now, is literally one of the worst. How far they have fallen. I really hope they can make a comeback!
Given my own nightmare experience with Dell, I can’t help but wonder if other consumers are finding similar struggles with a company that has clearly become too big for its own good.
Last Summer I paid $2300 for a high end laptop from Dell. Within 2 weeks of receiving it, the laptop suffered a catastrophic hard drive failure. Dell offered to replace the laptop and guess what? After 2 weeks the second laptop died from catastrophic hard drive failure.
This time, I was determined to get a full refund. I had to speak with 14 representatives over a 3 hour period before they would submit my request for management approval. Not once, but twice during my 3 hours on the phone I was disconnected. After calling back, I would be told that I called the wrong phone number, only to be given the same number I had just dialed as the “right” number.
Three days later I was granted approval for a full refund. However, the refund took 3 months to process and Dell actually referred me to their collections department after having approved the return and after having received the laptop. Dell collections eventually reported my “delinquency” to the credit agencies.
I spent 6+ months, talked with dozens of employees, exchanged many e-mails and at the end of it all I bought a replacement laptop from a competitor.
The reason for Dell’s struggles seems obvious to me.
As a former management consultant who lives in Austin and knows lots of Dell people, one of Dell’s biggest problems was getting overrun by former management consultants. A sure formula for short-term and unimaginative business decision making.
Dell is a company in a decline. It could legitimately be called the new Gateway.
Dell was a one-trick pony, and others like HP learned the trick. If Dell cannot focus or innovate on something else, then they are destined to become another Gateway.
A stock is expensive no matter what the price if the company’s only direction is down. Dell is in a death-spiral of costcutting, price cutting and product-line cutting. You can’t cut your way to growth and success.
Sounds like this writer owns some stock in AAPL
The Problem with Dell “Culture” is that it doesn’t have one. Trust me, I left gladly after all the misfires of acquisitions. (Alienware, ASAP, Equalogix). Maybe MSD needs to take a dollar CEO salary too.
In 1985 I worked for Compaq. They were worried about Japanese competition. Compaq management considered Dell an outsider who knew nothing about the computer business. Dell would soon pass into the trash heap of start ups. Dell implemented Just in Time manufacturing along with phone sales. Alas the rest is history. HP is emulating IBM while Dell is in neutral. I expect Dell performance to eventually be on parity with HP & IBM which means more downward pressure on stock performance.
- I am willing to pay for value. When I... More
- I plan to auction a house from govern... More
- The recession is far from over. There... More
- I'll believe the recession is over wh... More
- No, I do not think the recession is o... More
- Interesting article, and commendable ... More
- I switched careers at age 57 from the... More
- Interesting that the primary focus fr... More
- as a homedepot "home service" custome... More
- Nice article - BUT - Carol Tome is li... More



I think that Dell’s problem is success. They got to be the leader in corporate computing hardware, and then they rested.
As to whether Dell does anything other than put parts in a box, I will say this is wrong. Take apart a Dell box, and you will find little that is industry standard. That is fine for corporations with Dell service support (and on-site support staff), but sucks for individual consumers.
That said, I have had problems with every computer brand I have tried (HP loads too much crap on the drive, Compaq innovated a case and voided the HD warranty, Sony had no idea what customer support was, etc., etc).
The sole computer I have been happy with is my Acer laptop. It is solid. Not fancy, but solid. The only problem I have had on this 3 year old machine was caused by Windows, not Acer.