Dell announces Internet alliances

Wednesday, June 28th 2000, 12:00 am
By: News On 6

Firm wants to broaden offerings by teaming with Microsoft, AT&T

NEW YORK - Dell Computer Corp. announced partnerships with AT&T and Microsoft Network at the PC Expo trade show on Tuesday in a move to broaden its offerings in the expanding Internet economy.

AT&T and Dell will sell Internet access to small businesses. They plan to launch the service, branded DellEPro, in late summer.

With only 26 percent of small businesses online, the market is ripe for such a service, said Michael Dell, Dell's chairman and chief executive. AT&T estimated a $28 billion market for small-business Internet service.

In the fall, Dell will introduce a co-branded Internet service with Microsoft Corp. called Dellnet by MSN. The companies said their alliance is geared toward the"plug-and-play" consumer who wants to be on the Web within minutes of turning on the computer.

Mr. Dell was careful to say that the company will continue to offer AOL in its preconfigured product lines.

Mr. Dell said the Round Rock, Texas, company will not play favorites among operating systems or service providers as the company executes a growth strategy detailed for Wall Street in April.

"Dell wants to provide the broadest range possible for our customers," he said.

Mr. Dell also supported Microsoft chairman Bill Gates in the software giant's uphill battle with antitrust regulators.

"The Justice Department isn't exactly an expert in the software business. We're not big fans of government involvement in business," he said when asked about the case.

Mr. Dell is a supporter of Texas Gov. George W. Bush, who has criticized the Justice Department for its aggressive stance in the antitrust case. Mr. Bush is expected to be the Republican presidential nominee in the fall election.

Mr. Dell said he does not like commenting on the Microsoft case, and he welcomed a return to the topic at hand: Dell's financial future.As the semiconductor industry enjoys a robust demand, companies such as Dell must worry about shortages of parts, which drive up prices and shrink margins.

Mr. Dell said that although the supply of certain PC components is constrained - and Dell"is not getting as much from Intel" as it would like - the company is prepared for any fall-out.

"It's nothing that will have a material effect" on company earnings, he said.

Dell is expected to grow by at least $8 billion this year, which would mean full-year revenue of $33 billion for the 2001 fiscal year.Dell's stock closed down $1.19 on Tuesday to $47.81 on the Nasdaq stock market.

Some analysts, including Richard Gardner of Salomon Smith Barney, say Dell's reliance on Intel could affect revenue while the company is building momentum in the sale of the computers that make up the backbone of the Internet. Much of that growth will come from the server and storage markets, where Dell mdash with its direct sales model - can offer lower prices.

Mr. Dell rebuffed suggestions that Dell looks more and more like a company that packages other people's products instead of creating them.He pointed to a relationship with International Business Machines Corp., announced last year, that essentially created a research and development unit with IBM engineers for Dell.

"There isn't a technology at IBM that we don't have access to," he said.

The relationship with IBM was cemented late last year when James T. Vanderslice, a career IBMer known for his strategic thinking and storage expertise, decided that he liked the Dell model so much that he wanted to be part of the company. He is a co-vice chairman with Kevin B. Rollins.

Dell executives held their PC Expo meetings uptown at the well-appointed, well-air-conditioned Four Seasons hotel. There, Mr. Dell said reports of the death of the PC are wildly exaggerated.

But in Manhattan, as about 90,000 technology buyers jammed into a steamy Javits Center, the talk was about anything other than the PC. Expo goers kicked the tires on any number of the latest gadgets and software packages.

Sweat beading on his brow, Theodore Barth, a Brooklyn tax consultant, examined a scanning device from WizCom Technologies of Acton, Mass."We're looking at it to replace highlighters. You can go into a meeting and scan the important stuff and download it into your Palm or PC," he said.

Randy Green, president of the company, said the QuickLink pen has become popular with an odd mix of professionals since its introduction in March.

"We have sold a lot of them to the clergy - ministers and rabbis," WizCom president Randy Green said."Don't ask me to explain why the clerics like them."

"Dell wants to provide the broadest range possible for our customers."