List of mergers and acquisitions by Dell

List of mergers and acquisitions by Dell

Dell's headquarters are in Round Rock, Texas.

Dell is an American multinational technology company based in Round Rock, Texas. The company was founded in 1984 when Michael Dell, then a student at the University of Texas at Austin, formed PC's Limited with US$1,000 in capital.[1] Four years after the company's founding, in 1988, Dell raised $30 million in its initial public offering and increased its market capitalization to $85 million.[2] The company has acquired ten companies, purchased stakes in four companies, and divested two companies. Of the companies that Dell has acquired, eight were based in the United States. Dell has not released the financial details for most of these mergers and acquisitions.

Dell's first acquisition was ConvergeNet Technologies on September 8, 1999. The company acquired Alienware, a specialty computer desktop manufacturer, on May 8, 2006 for an undisclosed sum and integrated it into the company's high-end product line. Alienware's acquisition introduced several new items to Dell products, including Advanced Micro Devices (AMD) microprocessors; all of Dell's previous computer chips were from Intel. To prevent cross-market products, Dell continues to run Alienware as a separate entity but still a wholly-owned subsidiary.[3] The company acquired EqualLogic on January 28, 2008 to gain a foothold in the iSCSI storage market. Because Dell already had an efficient manufacturing process, integrating EqualLogic's products into the company drove manufacturing prices down.[4]

From 1999 to 2000, Dell purchased stakes in four companies. It also divested two companies, in 2000 and 2008, in which parts of the company are sold to another company. Dell's largest acquisition was New Hampshire-based EqualLogic in January 2008 for $1.4 billion. The company made the most acquisitions in 2008 with three: EqualLogic, The Networked Storage Company, and MessageOne.

Critism

In the 1990s Dell switched from using primarily ATX motherboards and PSU to using boards and power-supplies with mechanically identical but differently wired connectors. This meant customers wishing to upgrade their hardware could encounter unforeseen problems. However, company practice in this respect changed in 2003.[86][87]

In 2005, complaints about Dell more than doubled to 1,533, after earnings grew 52% that year.[88]

In 2006, Dell acknowledged that it had problems with customer service. Issues included call-transfers[89] of more than 45% of calls and long wait-times. Dell's blog detailed the response: "We’re spending more than a $100 million — and a lot of blood, sweat and tears of talented people — to fix this."[90] Later in the year, the company increased its spending on customer service to $150 million.[91]

In May, 2008 the New York Supreme Court ruled that Dell and Dell Financial Services "engaged in fraud, false advertising, deceptive business practices, and abusive debt collection practices." The relevant lawsuit aimed primarily[citation needed] to highlight and seek restitution for a lack of technical support given to customers by Dell. The court plans to hold further proceedings to determine how much money Dell has to pay out to customers and how much profit Dell made unlawfully, in New York

SEC investigation

SEC investigation

On August 17 2007, the Dell Inc announced that after an internal investigation into its accounting practices it would restate and reduce earnings from 2003 through to the first quarter of 2007 by a total amount of between $50 million and $150 million, or 2 cents to 7 cents per share.[84] The investigation, begun in November 2006, resulted from concerns raised by the U.S. Securities and Exchange Commission over some documents and information that Dell Inc. had submitted.

Lawsuits and other legal action

Lawsuits and other legal action

In 1997 Håkan Lans sued Dell for infringement of his colorgraphics display patent without paying royalties. Dell won the case due to a technical error: Lans's American laywer used his name instead of that of his company, although he had stated that the company owned the patent.

In 2005, Dell began the construction of a facility in Winston-Salem, North Carolina.[74] Many claims emerged that Dell had used unfair practices to obtain huge incentives.[75] Dell Inc. fought a lawsuit which the court system later dismissed.[76]

In October 2005, Dell filed a lawsuit in a Paris court to sue Minorca-based independent website-designer Paul Dell of "Dellimages" for engaging in “parasitism and unfair competition”. This related to his company website "DellWebsites".[citation needed]

On January 31 2007, some shareholders filed a lawsuit accusing Dell and Intel of conspiring, and accusing Dell executives (including Michael Dell) of options-backdating and of propped financial reports.[77] Specific allegations claimed that:

Dell had received kickbacks from Intel to maintain Intel exclusivity

Dell had used the funds to prop up its sales-figures

Dell reduced the period and scope of its warranties and cut corners on manufacturing and testing in order to funnel additional funds to sales; causing the stock-price to inflate to around $40 per share

once stock-prices had peaked, several Dell executives, including Michael Dell, sold massive amounts of their personal stock-holdings to benefit from the artificially inflated stock-price

On February 8 2007, seven current and former workers at a call-center in Roseburg, Oregon sued the computer-maker, saying the company worked its sales reps "off the clock", failed to provide proper rest-breaks and improperly recorded their lunch-periods.[78] Moves have begun to turn the case into a class action. Dell suddenly closed down the facility at Roseburg, Oregon on August 2 2007.[79] The facility had consisted of computer and electronics sales-agents and of customer-service representatives.

In March 2007 an article titled "Computer Giant Faces Consumer Lawsuit Consumers Allege They Didn't Get the Tech Support They Paid For" appeared on an ABC News website.[80] "Part of the suit claims that though Dell gave the impression of an "award-winning service" available to consumers "24 hours a day, seven days a week", consumers faced "nightmarish obstacles" to get help and technical service for their computers. New York State Attorney General Andrew Cuomo said that New York had received 700 complaints about Dell — more than the number of complaints for any other related subject.

In May 2007, Andrew Cuomo filed a lawsuit against Dell for "false advertising and deceptive business practices, including offering misleading financing, and failing to honor rebates, warranties and service contracts." [3] Dell spokesman Bob Pearson portrayed the lawsuit as based on only a small portion of Dell's customers and as in no way reflecting the way the company treats its customers. Dell's hardware-warranty contract says that customers must troubleshoot over the phone — including possibly opening the computer — before Dell will send a technical service provider to replace a part. On May 27 2008, State Supreme Court Justice Joseph Teresi required that Dell clarify its financing and warranty criteria, saying the computer maker engaged in fraud, false advertising, deceptive business and abusive debt-collection practices.[81] Parties have filed more than 1,000 additional complaints with the attorney general's office since the initial filing of the lawsuit in May 2007.[82]

On December 5 2007, Typhoon Touch Technologies filed a lawsuit naming Dell inc. along with other defendants, and alleging patent-violations over Dell's use of touch-screen technology

Environmental record

Environmental record

Dell became the first company in the information technology industry to establish a product-recycling goal (in 2004) and completed the implementation of its global consumer recycling-program in 2006.[70] On February 6 2007, the National Recycling Coalition awarded Dell its "Recycling Works" award for efforts to promote producer responsibility.[71] On July 19 2007, Dell announced that it had exceeded targets in working to achieve a multi-year goal of recovering 275 million pounds of computer equipment by 2009.[72] The company reported the recovery of 78 million pounds (nearly 40,000 tons) of IT equipment from customers in 2006, a 93-percent increase over 2005; and 12.4% of the equipment Dell sold seven years earlier.[73]

On June 5 2007 Dell set a goal of becoming the greenest technology company on Earth for the long term. The company launched a zero-carbon initiative that includes:

reducing Dell's carbon intensity by 15 percent by 2012

requiring primary suppliers to report carbon emissions data during quarterly business reviews

partnering with customers to build the "greenest PC on the planet"

expanding the company's carbon-offsetting program, "Plant a Tree for Me".

The company introduced the term "The Re-Generation" during a round table in London commemorating 2007 World Environment Day. "The Re-Generation" refers to people of all ages throughout the world who want to make a difference in improving the world's environment. Dell also talked about plans to take the lead in setting an environmental standard for the "technology industry" and maintaining that leadership in the future.

Competition

Competition

Dell's major competitors include Apple, Hewlett-Packard (HP), Sun Microsystems, Gateway, Lenovo, Sony, Acer, Toshiba and Asus. Dell and its subsidiary, Alienware, compete in the enthusiast market against Falcon Northwest, Voodoo PC (a subsidiary of HP), and other manufacturers. In the second quarter of 2006 Dell had between 18% and 19% share of the worldwide personal computer market, compared to HP with roughly 15%. By leveraging its business-model, Dell attempts to undercut competitors and offer customers a more attractive choice of personal computers and other equipment.

Dell in late 2006 lost its lead in the PC-business to Hewlett-Packard. Both Gartner and IDC estimated that in the third quarter of 2006, HP shipped more units worldwide than did Dell. Dell's 3.6% growth paled in comparison to HP's 15% growth during the same period. The problem got worse in the fourth quarter, when Gartner estimated that Dell PC shipments declined 8.9% (versus HP's 23.9% growth). As a result, at the end of 2006 Dell's overall PC market-share stood at 13.9% (versus HP's 17.4%).

IDC reported that Dell lost more server market share than any of the top four competitors in that arena. IDC's Q4 2006 estimates show Dell's share of the server market at 8.1%, down from 9.5% in the previous year. This represents a 8.8% loss year-over-year, primarily to competitors EMC and IBM.

Retail in other spheres

Retail in Canada

As of the end of February 2008, Dell products shipped to one of the largest office-supply retailers in Canada, Staples Business Depot. In April 2008, Future Shop and Best Buy began carrying a sub-set of Dell products, such as certain desktops, laptops and monitors.

Direct retail in Eastern Europe

Since some shoppers in certain markets show reluctance to purchase technological products through the phone or the Internet, Dell has looked into opening retail operations in some countries. In April 2007, Dell opened a retail store in Budapest. In October of the same year, Dell opened a retail store in Moscow.

Retail in the UK

Since December 2007 HMV's flagship Trocadero store has sold Dell XPS PCs. From January 2008 the UK stores of DSGi have sold Dell products (in particular, through Currys and PC World stores). As of 2008, the large supermarket-chain Tesco has sold Dell laptops and desktops in outlets throughout the UK.

Retail in Australia

In May 2008, Dell reached an agreement with office supply chain, Officeworks (part of Coles Group), to stock a few modified models in the Inspiron desktop and notebook range. These models have slightly different model numbers, but almost replicate the ones available from the Dell Store. Dell continued its retail push in the Australian market with its partnership with Harris Technology (another part of Coles Group) in November of the same year.