
Dell has always been the golden child of the PC industry, and with good reason. The company almost single handedly invented the direct from manufacturer business model, and went on to become one of the largest and most successful OEM’s in the world. Dell’s whirlwind success has been studied extensively, but new evidence is suggesting there might be more to Dell’s accomplishments than meets the eye.
On Thursday the US Securities and Exchange Commission released a batch of high level communications between Dell and Intel Executives that hint pretty heavily that the company was reliant on Intel kickbacks for its financial success, and that shareholders were intentionally kept out of the loop. According to the S.E.C, Kevin Rollins, Dell’s chief executive for part of the period in question attributed the companies runaway success with a “tightly controlled supply chain, highly efficient infrastructure and direct relationships with customers”. If this was true, it wouldn’t explain why Rollins communications with founder Michael Dell explained Intel payments as an “addictive drug” that they relied upon to hit quarterly targets.
Suspicion over Dell’s relationship with Intel swirled a few years back when AMD server chips had the edge, and Dell simply refused to play ball. Dell executives claimed that adding a second chip supplier would add complexity into an otherwise perfectly efficient supply chain. It sounds like typical executive double speak, but clearly something didn’t add up.
Dell has been slapped with a $100 million penalty, and even Michael Dell is personally on the hook for $4 million. Does this change your opinion of Dell?