Chapter 2

While a freshman pre-med student at the University of Texas, Dell started an informal business putting together and selling upgrade kits for personal computers[10] in Room 2713 of the Dobie Center residential building. He then applied for a vendor license to bid on contracts for the State of Texas, winning bids by not having the overhead of a computer store.[11][12][13]

In January 1984, Dell banked on his conviction that the potential cost savings of a manufacturer selling PCs directly had enormous advantages over the conventional indirect retail channel. In January 1984, Dell registered his company as "PC's Limited". Operating out of a condominium, the business sold between $50,000 and $80,000 in upgraded PCs, kits, and add-on components. In May, Dell incorporated the company as "Dell Computer Corporation" and relocated it to a business center in North Austin. The company employed a few order takers, a few more people to fulfill them, and, as Dell recalled, a manufacturing staff "consisting of three guys with screwdrivers sitting at six-foot tables". The venture's capitalization cost was $1,000.[14][15]

In 1992, aged 27, he became the youngest CEO of a company ranked in Fortune magazine's list of the top 500 corporations.[16] In 1996, Dell started selling computers over the Web, the same year his company launched its first servers. Dell Inc. soon reported about $1 million in sales per day from dell.com.[17] In the first quarter of 2001, Dell Inc. reached a world market share of 12.8 percent, passing Compaq to become the world's largest PC maker. The metric marked the first time the rankings had shifted over the previous seven years. The company's combined shipments of desktops, notebooks and servers grew 34.3 percent worldwide and 30.7 percent in the United States at a time when competitors' sales were shrinking.[18]

In 1998, Dell founded MSD