Michael Dell: E-commerce hero?

NEW YORK--Dell Computer (DELL) chairman Michael Dell told the fall Internet World '97 crowd here today that skeptics who think online commerce is a fad or a niche market need look no further than his own company.

Armed with a raft of statistics that foretell a near-future boom in Internet sales and transactions, Dell touted the success of the Dell.com Web site as a important reason for his company's rise through the ranks of the PC makers and challenged others to follow his online lead.

"Find me a business that's not on the Web, and I'll show you a business that's out of touch with the future," he said.

Dell's online sales now project to a rate of $1 billion a year, and several times this holiday season online sales have topped $6 million a day, Dell said. Despite the holiday crush, the company's strength still lies in selling to corporations, but its competitors and some market analysts have recently grumbled that Dell in fact relies more upon system resellers--known in industry jargon as "the channel"--than it lets on. (See related story)

Dell's presentation stepped through the various sections of the company's Web site, from the main consumer pages to custom-designed, confidential pages for large corporate customers. By adding an automated order tracking area, the company saves $8 for each customer who uses the site instead of making a phone call and tying up human resources, the CEO said.

"We view the Internet as an integral part of our business strategy, not just something we've bolted on" as a sales and marketing tool, Dell added.

Despite what he called the "myth of the equal playing field," not everyone will benefit from online commerce. For many companies, it's more challenging than expected to extend business relationships via the Net, because culturally those companies are accustomed to going through middlemen. The Internet cuts a more direct path between business partners, Dell noted.