Dell wants US$60B by 2006

As Dell prepares to celebrate its 20th anniversary this year, founder and CEO Michael Dell doesn't see his company slowing anytime soon.

Dell told investors at Needham & Co.'s Growth Conference that he expects his company to reap US$60 billion in revenue in fiscal 2006, up from US$35.4 billion in 2003.

Further, he wants to increase Dell's 5 percent share of the US$800 billion worldwide IT market, and he thinks growth in handhelds, printers, and services will get him there.

Among the points raised during Dell's appearance: Dell says he expects each product line to be profitable and stand on its own. 'We don't believe in the idea of cross-subsidisation.'

While the company has entered consumer electronics, Dell says it'll remain primarily a business-technology seller. About 18 percent of Dell's revenue comes from consumer electronics, and that's unlikely to change muchoon, he says. 'The X factor is how quickly the digital consumer-electronics market will grow.'

Revenue from product-support and warranty services is growing twice as fast as sales from any other part of the company, Dell says. Of course, it's comparatively easy to get high growth rates from a new venture than from the company's more mature PC- or server-making businesses.

Interestingly, Dell says he wants to apply the same formula that works for products to services. 'Services aren't as tricky or mysterious as they appear to be,' he says. 'In fact, many processes are repeatable.'

Dell says there's still some cost he can squeeze out of the company's famously lean supply chain. 'Has Dell's efficiency peaked? We believe we can always improve every aspect of our business.'

Needham analysts see the company's management strategy, something they refer to as 'two in a box,' as a key strength. Not surprisingly, Dell agrees:
 
President and chief operating officer 'Kevin Rollins and I have a partnership and run the company together. Kevin is more operationally oriented than I am. I'm more entrepreneurial.'