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IDC Forum, Paris: Michael Dell gives Net advice

By John Oates

Published: Tuesday 14 September 1999

The Internet is "a weapon lying on the table - either you use it or your competitor will," according to Michael Dell, founder and CEO of Dell Computer.

Speaking at this week's IDC IT Forum in Paris, Dell described three rules business must follow to succeed as it moves onto the Internet.

First is velocity and compression of time and distance. He said: "At Dell we use information on our customers instead of inventory - if you have perfect information on your customers you don't need inventory. He also warned companies that as more and more consumers get broadband Internet access, so the way that companies talk to customers must change to take advantage of this.

Secondly he said that efficiency and execution become as important as product and service. Dell claimed that 40 per cent of his company's technical support queries are now dealt with online. This not only reduces costs for Dell but also improves the service level for customers. The increasing amount of information that Dell gains from customers also allows it to reduce the time taken to resolve problems.

Finally Michael Dell said that the experience a customer has on a Web site must be better than the same experience in the physical world. It is this rather than price which will keep online customers loyal. The example he used was that of large Dell customers increasingly merging their internal ERP and procurement systems with Dell's systems. This exchange of information has allowed one customer to save $10m, he claimed.

In a Q&A session at the Forum, Dell was asked what he thought of the predictions of the decreasing role of the PC if the industry moves, as Compaq President and CEO Capellas predicts (see separate story), to more specific devices. He said: "I know Scott McNealy is here tomorrow reintroducing the network computer. We also see a proliferation of Net-enabled devices, be they two-way pagers, cars, or whatever, but the PC serves as the centre of that universe for these devices."

He claimed high-speed connections to the Internet do not necessarily mean that more computing power moves to the centre. In fact he said the opposite is true - people with broadband access want more computing
power.

"Every year we hear predictions of the death of the PC. We don't believe and we are happy to take the remaining market share that we don't have."