Despite the most severe downturn in the history of information technology things just keep getting better for Dell. The Republic's single largest employer in the technology sector - 4,500 staff work in Limerick and Dublin - just keeps getting bigger
The Texas-based computer giant now rivals HP as the single largest computer equipment vendor with about 16 per cent market share, and almost doubled its turnover to $35 billion (€32.5 billion) in just five years.
At a time when many of its rivals are drowning in red ink, Dell is diversifying into new sectors such as network storage, printers and handheld devices.
Dell's success is making other technology firms sit up and take notice and some are attempting to piggyback on its success. This week Oracle chief executive, Mr Larry Ellison, gave the firm a resounding endorsement in New York at the announcement of an extended partnership between Oracle and Dell.
"If you want higher performance you have to be willing to spend less," said Mr Ellison, in a glib reference to Dell's professed business strategy to deliver technically strong products at a price point below its rivals.
Oracle and Dell will now work jointly to sell their core server and database technologies, the Dell PowerEdge server and Oracle's 9i database, in Europe and Asia.
This will enable customers to deploy Oracle software on Dell servers while maintaining a single point of contact with Dell. Dell will also partner with Oracle Consulting to offer its customers a suite of professional IT services for deployment and maintenance.
Mr Michael Dell, who founded Dell in 1984 with $1,000, bases much of the firm's rapid success on simplicity. "Many vendors in our industry are proposing complex solutions for customers that rely on costly proprietary technologies, extensive and expensive services, and that ultimately limit choice," he told European reporters in New York this week.
The harsh economic climate is accelerating the shift from complex proprietary mainframe computing systems to ones that are based on set standards, according to Mr Dell, who last year set the aggressive goal of doubling the company's revenues by 2007.
To accomplish this target Dell is now turning his attention to Europe and emerging states in Asia, especially China. Despite the general malaise in the technology sector Dell's operations in Europe, Middle East and Africa have continued to expand revenues. And Mr Paul Bell, Dell's European president, describes the firm's achievement of generating $2 billion revenue in the region as a "significant milestone".
"Key to the company's success is enabling the chief information officers of our customers to figure out how to get more for less," says Mr Bell, invoking Dell's catchphrase.
"The values of our direct sales model are that it's an easier, faster and lower-cost structure for doing business," he says. "These are the values that IT leaders want."
Dell's direct sales model enables customers to purchase computer equipment direct over the internet and have their products customised to their individual needs. By bypassing retailers and employing very efficient manufacturing techniques - which demand that suppliers provide it with components rapidly at low cost - Dell has undercut its competitors on price.
Dell's customised manufacturing process, which requires a single employee at its plants to assemble a full product to exact specifications, has also proved technically strong, extremely reliable, and popular with customers.
Market research firm IDC estimates Dell shipped four million computing products - servers, notebooks, PCs - in the European region during 2002, an increase of 10 per cent year on year. The IDC forecasts give Dell 10 per cent market share in the region, significantly below its global market share figures.
Dell says this is because it entered the market in these regions later than it did in the US. However, analysts also believe cultural factors in Europe such as lower internet penetration levels and the different purchasing strategies employed by European firms and consumers - many of which still buy from retailers or channel partners - are impeding its progress.
Yet Dell has so far refused to budge from its direct sales model. Mr Bell says Dell's sales model - which accounts for at least 90 per cent of sales - can work in every region of the world. "We are making it work in many countries that are very different to the US market, including China and Thailand," he says. "We have had more consistency of execution in the last three to four years and we are concentrating on that."
But the biggest threat to Dell's goal of doubling revenues by 2007 are continued economic and geopolitical uncertainty. IDC recently slashed its growth targets for annual IT spending by companies to 3 per cent, down from 6 per cent for this year. And senior executives at some of the world biggest technology firms, including Intel and Xerox, have forecast further economic problems ahead.
When asked about its future targets this week, Mr Michael Dell wasn't willing to give any specific reassurance. "We don't have any desire to make bold pronouncements beyond the ones we've made already," he said.
The firm is expected to issue guidance on its finances shortly. This is likely to show how the war in Iraq is affecting business sentiment.
Nonetheless, diversification will be key to whether Dell achieves its goal. As well as its new deal with Oracle, Dell is also strengthening its ties with data storage firm EMC this week.
In October 2001 the computer firm entered the storage market in partnership with EMC for more sophisticated computing equipment called storage area networks - which enable firms to store large amounts of data on computer equipment.
In New York this week, Dell announced several new customers for its storage products including The Ordnance Survey of Ireland and North Tipperary County Council. The Ordnance Survey will use the Dell/EMC product to support its project to create a national archive of maps and aerial photographs of Ireland.
Generating market share in the fast growing storage market would help Dell to generate revenues. But perhaps one of the most challenging moves for Dell over the next few years will be fulfilling an ambition to grow revenues in the IT services space, a sector that is often identified as Dell's one major weakness.
Mr Joshua Claman, Dell's vice- president of services, says the firm will aim to "commoditise" certain IT services in a similar manner to the way it has in the hardware market.
"We want to "Dellerise" services," he says. "Typically services firms utilise just 70 per cent of their staff at any given time. We expect just 10 per cent inefficiency and will pass on the 20 per cent cost savings to our customers," he says.
Dell will formally launch its new services strategy in Europe within the next three months but has no plans to hire an army of consultants, unlike some of its bigger rivals in the space.
"We will have a thin layer of Dell-badged professional services staff and we will partner with other companies to deliver services," says Mr Claman.
The standardised services that Dell will offer clients include on-site maintenance of IT, telephone technical support and certain other standardised services. But it won't offer the high-end professional services such as IT strategy.
"We don't know how to commoditise that yet. We haven't figured it out yet but we will."
The company faces stiff competition from HP, IBM and Fujitsu, who all currently generate more revenue from their services arms than Dell, according to the research firm Gartner Dataquest. Dell will also have to erode doubts over its ability to ensure quality of service when it is contracting a third-party firm to deliver a specific service to a customer.
But few would bet against Mr Dell pulling off another coup for the company, which has benefited from being in the right space at the right time. And it doesn't look like Mr Dell is planning on handing over the reins of his company anytime soon.
"Running a business like this is always an interesting and challenging endeavour... I'm happy with what I'm doing and enjoying it," he told reporters.
