Mr Dell is chairman and chief executive officer of Dell Computer, which is set to become one of Ireland's biggest employers and has traditionally been Compaq's principal rival in the personal computer market.
"Dell is not interested in getting into services provision where it currently only has 6 or 7 per cent market share. We couldn't assimilate the number of people an acquisition would require. We're not looking to buy anybody; in fact, we've been buying back roughly 100 million shares of our own stock - which is about the same cost as the Digital acquisition - and that's generated a better return for our shareholders," he said.
On-line sales over the Internet continue to be the key area of rapid growth. Mr Dell predicts online transactions will soon account for 50 per cent of Dell's business. However, he has modified his claim that Dell will be number one worldwide by 2000 following the Compaq/DEC deal. "Compaq took $2 billion worth of PC market revenue with that deal - that is quite significant, so the equation is a little different. I haven't worked out the maths yet, but it may simply happen later in 2000," he said.
Mr Michael Dell, chairman and chief executive of Dell Computer Corporation, during his visit to Dublin yesterday
Compaq's acquisition of Digital Equipment Corporation (DEC) poses little threat to its main rival Dell Computer, Mr Michael Dell said in Dublin yesterday.
Mr Dell is chairman and chief executive officer of Dell Computer, which is set to become one of Ireland's biggest employers and has traditionally been Compaq's principal rival in the personal computer market.
Mr Dell said: "Compaq has been a good competitor, but the challenge of acquiring companies is very high. DEC has over twice the number of employees as Compaq, so integrating them and sorting through DEC's mixed bag of businesses is a major challenge. This is going to distract Compaq from the PC business, which creates a major window of opportunity for Dell."
He is in Dublin to celebrate the fifth anniversary of Dell's operation in Bray, Co Wicklow. The visit also coincides with Dell's recently announced plans to create an additional 3,000 jobs in Limerick and Bray.
Up to 400 of these jobs are planned for Bray's sales and support telecentre over the next three years, with the remainder going to the Limerick manufacturing operation.
"New staff will be hired across all functional categories, not only manufacturing. This includes positions in finance, administration, IT customer service and engineering. We encourage applications from graduates, school leavers and mature people wishing to re-enter the workforce. We currently have a stand at Opportunities '98, and hope to meet many of our prospective new employees there over the next few days," Mr Dell said.
While Dell has been growing at three to four times the PC market growth rate, industry analysts have speculated that a bid for a computer services organisation, like Unisys, is now a real prospect.
However, Mr Dell said his company was not planning to acquire Unisys, though he expected their partnership arrangement to grow considerably.
"Compaq is now competing with companies they were in partnership with, including accounting firms, Wang, Unisys and the specialised network integrators. These companies are saying - though not publicly, because they don't want to upset customer relationships - `You're my competitor, I'm not all that excited about that'. So virtually all these guys are contacting us now," he said.
Dell's relationship with Digital has been dramatically altered following the Compaq takeover. Digital was previously a consultancy and customer maintenance partner to Dell in the US; now Mr Dell says this relationship is in decline, "particularly in the last week". The Dell product line has recently expanded into server and workstation provision at the higher end of the market, with Dell performing strongly as the fastest growing server company last year.
As the service industry becomes more commodity based, it is increasingly suited to the Dell sales model. However, there are no plans to compete on services, which will be conducted via enhanced partnerships with companies like Oracle.
"Dell is not interested in getting into services provision where it currently only has 6 or 7 per cent market share. We couldn't assimilate the number of people an acquisition would require. We're not looking to buy anybody; in fact, we've been buying back roughly 100 million shares of our own stock - which is about the same cost as the Digital acquisition - and that's generated a better return for our shareholders," he said. In the past year, PC competitors in the US have been doing battle over the sub-$1,000 computer. While this has been achieved in the US, there seems to be no sign of similar value being delivered to the consumer in Europe. Mr Dell warned that the sub-$1,000 PC is a misnomer. It can simply mean a PC with no monitor, or only 16 megabits RAM - "a car without tyres". By the time the buyer leaves the shop they have spent $1,500 to get what they really want.
However, he expects the price of PCs to continue to fall, with the most up to the minute models always staying at about the same mid-range price.
On-line sales over the Internet continue to be the key area of rapid growth. Mr Dell predicts online transactions will soon account for 50 per cent of Dell's business. However, he has modified his claim that Dell will be number one worldwide by 2000 following the Compaq/DEC deal. "Compaq took $2 billion worth of PC market revenue with that deal - that is quite significant, so the equation is a little different. I haven't worked out the maths yet, but it may simply happen later in 2000," he said.
