Electronics Manufacturing – M528




INTRODUCTION

Dell was founded in 1984 by Michael Dell. It was formerly known as PC’s Limited before it changed its name. All of its products are sold to end-users, which could range from a novice home user to a corporate enterprise. Their products are sold over the phone and internet. This option of individually providing end-users with their required product, gives the illusion that the system is being built for individual purpose (when it is actually the individual ‘creating’ a system based on the options available to them).
The direct consumer-manufacturer relationship between Dell and its consumers means it cuts out the ‘middle man’, i.e. the retailers etc, however, this could be an advantage in that it saves time and cost involved in that department; or a disadvantage, as it could mean that Dell are under-estimating their consumer needs, i.e. their products will only be based on their assumptions of what they think their costumers need (Dell, 2007).
Although the final product might say ‘Dell’ on it, there are a series of components (from several partners/suppliers) that make up the end product. Dell partners with a series of suppliers (or partners) to create a good balance between making their end products as productive and cost-effective as possible.


DELL AND ITS PARTNERS

Dell has numerous amounts of partners, as it provides such a vast variety of services. Its partnerships range from hardware suppliers to software suppliers, from internet service providers to packaging suppliers.
The aim of this article is to analyse the relationships between Dell and just three of its partners. It would also be reflecting the effect of their partnerships with Dell. It would also be looking into answering a series of questions on what the effect on Dell would be if it decides to boycott one of its partners, either to favour expansion, or due to low-profit. This article will also be looking into why Dell, for example, have two major suppliers of their processors (AMD and INTEL), rather than just sticking to one of them.
Partnerships between companies exist for a wide range of reasons, as the three partners I am examining are three well established partners, one of the major reasons other companies might want to start a relationship with them could be for prestige purposes. Since each of these companies already has their ‘trusted’ place in the society, a relationship with them would mean a share in this trust.
Initially, this article will be analysing the relationship between Dell and each of the chosen partners (AMD, Microsoft, and Google).


DELL AND AMD
Dell started selling AMD chips individually, although they have now evolved into selling AMD-based computers. Dell was once an Intel-based company, however in 2006; it announced its partnership with AMD. Although this might be seen as a sudden switch, the main question in mind, is the reason as to why Dell waited so long to partner with AMD, as most of Dell’s other major competitors have been ‘buddies’ with AMD for a considerable amount of time.
With Intel monopolising the processor market, it means that AMD have major competition to deal with.



WHY THE SWITCH TO AMD

The sudden switch from Intel to AMD by Dell was due to a variety of reasons. With Dell having two major processor suppliers, could mean that there might be less risks of disappointment (in relation to the phrase “putting all your eggs in one basket”). Also, this might help keep either of the suppliers on their toes, as a laid back attitude will not be tolerated from either party (as competition is in the horizon).
Dell is always competing with all the other major computer sales companies, thereby a switch/partnership with AMD puts it back into the competition, as it has had its fair share of misfortunes lately (Wikipedia, 2007, para.13), (so why wait for over 20 years to achieve this switch?). Competitive pressure has played a major factor in this decision (Bangeman, 2006, Para. 2), as the other companies have benefited from selling systems with cheap processors from AMD, which Intel was unable to provide to them.
Dell is hoping that this new partnership with AMD will help to boost its system sales, and on Dell website, the cheaper computers are usually with the AMD processor installed in them, while the more expensive ones have Intel processors in them. Although this could be seen as a performance strategy, the real is that most of AMD’s processors offer same speed as that of Intel, but as Intel is continuing to upgrade its performance levels (just like the introduction of the Intel core duo, Intel core pro etc.), it means AMD might have to be playing ‘catch-up every time.
Dell is keeping very tight-lipped about any further developments it might have with AMD, so in conclusion, it seems Intel is still the top supplier to Dell for processors, but it seems lately, AMD is closely behind (with the upcoming launch of the Native x86 Quad core processor).

DELL AND MICROSOFT

A look into most, if not all Dell’s systems has some sort of Microsoft software installed in it (well apart from the Linux ones, although this will be reviewed later on in the article). Dell’s alliance with Microsoft is so close that even some sort of tax (Microsoft tax) is paid on most Dell’s computers (Slashdot, 2005).
Microsoft has a major impact on Dell that it sometimes often seems like Dell is a Microsoft-owned company. If a computer is to be purchased to from Dell’s website today, there is a 99.9% chance that it is pre-installed with a Microsoft software, and even the dell website recommends a Windows operating software with its computers.
However, with the constant evolution of Linux machines, Microsoft recently formed an alliance with Novell to make windows programs executable/compatible with Linux machines. Dell recently joined in on this alliance. However, could this be a tactic being used by Microsoft? , as Linux is an already growing company (the tactic of “keep your friends close, and your enemies closer”), and it seems that Dell might have fallen right into the trap. Although, it seems that Dell could benefit from this partnership between Microsoft and Novell, as it means that it is looking into the broader vision of satisfying each of its potential costumers.

DELL AND GOOGLE

Google is the world’s biggest and most popular search engine. Its partnership with Dell means that all Dell’s PCs will come installed with a Google web and desktop-search engine toolbar, however, the PCs that will have them installed on them will be that of small to medium-sized businesses, and home use computer systems.
This deal does not really seem to be of great importance to either of the parties. As Google is already an established company, the only benefit it is gaining from this partnership is that of advertisement (but does Google really need to advertise itself?). Dell’s partnership with Google means that it is less dependent on Microsoft’s services it has once relied on in the past.

EFFECT OF BOYCOTTING ANY OF THE PARTNERS

• As AMD is still such a small fraction of Dell’s PCs, boycotting it, might not play a huge difference on Dell. However, it would only mean that Dell is moving backwards, rather than looking to make its business more successful. As mentioned earlier, AMD provides Dell with the option of selling cheaper systems, and broadening its horizons with some consumers. AMD provides processors to other companies (IBM, HP, Compaq, Philips etc.), so if Dell was completely out of the picture, I believe that it would become more of a less-competitive company (as its partnership with Dell, means its constantly trying to compete with Dell’s other processor supplier, Intel, thereby creating room for progress).
  
  
• Boycotting Microsoft would be a huge blow for Dell, as majority of their systems relies on Microsoft. Dell would be more badly affected, than Microsoft, as it is easy for Microsoft to find another supplier. And with Microsoft’s recent alliance with Linux, it makes it more compatible with most systems, and makes it more marketable. It might also mean that Dell might need to find another alternative, perhaps Linux, or who knows, a kind of Apple-Dell deal might arise. Although this means its systems become very limited to only a certain percentage of its costumers.

• As I personally believe that the Dell-Google relationship is more of a publicity stunt rather than a crucial importance, boycotting each other should not make a huge difference to either company.

POSSIBLE REASONS FOR BOYCOTTING
The reason as to why Dell might want to boycott either of its partners could be for a number of reasons:

• For the purpose of expansion. Perhaps to change its goal from just putting components from other suppliers together, into manufacturing its own. An example of this was when it announced to start providing its own media centre, rather than just focusing on that provided by Windows.

• It could boycott due to low-profit. If a certain development is not proving to be as successful as anticipated. For example, when it decided to welcome AMD processors, rather than just focus on Intel processors.

• A breach in contract could cause boycotting. For example, as Microsoft has such a strong hold on Dell, if Dell’s computers started coming pre-installed with Open Office software, rather than the usual Microsoft Works, or Microsoft Office; this could be seen by Microsoft as a breach in contract.

• Boycotting could also be caused by ethical issues in any of the companies, i.e. if Dell for example discovered that AMD were employing cheap labour programmers, then it could conflict with Dell’s ethics.
  

THE FUTURE WITH DELL

There are still more partnership opportunities with Dell to come (Dell, 2007).

Although each of the partners mentioned, all provide Dell with various different services, it seems they all appear to be competing with each other one way or the other. This could have been because the companies listed above all provide a broad range of services, i.e. for example, Microsoft does not just provide with operating systems, they provide various other applications on a PC, there is a bit of rivalry with Google.


CONCLUSION

Dell has a number of partners, as it is one of the top PC (if not the top) sales company in the world. Therefore, this partnerships with a huge range of companies is not only beneficial to Dell, the partners also benefit from the publicity they receive from working closely with Dell. However, for the bigger companies like Microsoft, the partnership might not seem that important, but I as, if they do not work with the biggest PC sales company in the world? , where else are they going to get their publicity and customer assurance from?

Each of the partnerships mentioned above are just as important as each other, however, the Google partnership does not seem very beneficial. However, with every partnership deal, there comes money, and who can say no to money? Also, as Google receives a certain percentage from every time a user clicks on any of their links on Dell’s computers, there is a bit of profit being generated from there.


REFERENCES
- Bangeman, E. (2006). Dell announces AMD desktops. Retrieved 8th May 2007 from:
http://arstechnica.com/news.ars/post/20060818-7538.html

- Dell – Dell and Microsoft Alliance. (2007). Retrieved 8th May 2007 from:
www.dell.com/content/topics/global.aspx/alliances/en/microsoft_main?c=us&cs=555&l=en&s=biz

- Dell – Dell at a glance. (2007). Retrieved 10th May 2007 from:
http://www.dell.com/content/topics/global.aspx/corp/background/en/facts?c=us&l=en&s=corp&~ck=mn&~section=000

- Microsoft Monitor – Dell Googles. (2006). Retrieved 11th May 2007 from:
http://www.microsoftmonitor.com/archives/2006/05/dell_googles.html

- Needle, D. (2006). Dell, Google take the plunge. Retrieved 11th May 2007 from:
http://www.internetnews.com/bus-news/article.php/3609221

- Singer, M. (2005). Dell is selling AMD chips. But why? Retrieved 8th May 2007, from:
http://news.com.com/Dell+is+selling+AMD+chips.+But+why/2100-1006_3-5940448.html

- Unisys - (2007). Retrieved on 8th May 2007 from the Unisys website:
http://www.unisys.com/about_unisys/partners/alphabetical_listing/dell.htm

- Wikipedia – Dell. (2007). Retrieved on 8th May 2007 from:
http://www.en.wikipedia.org/wiki/Dell

- Wolfe, A. (2007). Retrieved 11th May 2007 from:
http://www.informationweek.com/blog/main/archives/2007/05/dell_joining_mi.html