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TR: Do you have a central research lab? Also, about two years ago, you started Dell Ventures, which makes strategic investments in startups and other firms. Where does that fit into this broader picture of how you assemble research?

Dell: We’ve always had some small group that has done research. It’s gotten to be a formal organization in the last couple of years-a Dell Labs group. But it’s not a huge group. Their role is to think beyond the product road maps, which end between 18 months and two years out. They also have a technology council, where we review key promising areas and determine whether we should continue research in those, or whether we should skip them and learn something else. And they do quite a bit of experimentation with things. So they’re off playing around with handhelds and wireless and voice, you name it.

Dell Ventures can also play a significant role in pioneering and testing new concepts, new technologies, new ideas. For us, Dell is not an ingredient company; we’re a systems company. We provide solutions to our customers. So, take batteries as an example. We don’t have any factories that make batteries. We don’t have any plans to make them. But we know where all the batteries are made. We consume 20-plus percent of the worldwide production of batteries that go into products like ours and have some very small number of people who understand the chemistries that go into batteries. And if we felt that the industry wasn’t investing enough, battery development would become an issue for us.

But, instead, we see a lot of experimentation. And when we see, for example, one company with a lot of production capabilities and another with a lot of technology, we put them together. We just did this with a CRT [cathode-ray tube] innovation. We found a company that had a semiconductor replacement that offered smaller size, longer life, reduced cost, better focus and lower voltage levels than the cathode we’d been using. We invested in the company, and we hooked them up with our CRT providers to get this thing designed in. We don’t want to buy the company. Why buy the cow when all you want is the milk? We’ll take a piece of that company, make sure that invention gets into our products, and probably our products first, so we get some differential advantage-and go on and look for the next one.

TR: What has you most excited about the future of computing?
Dell: A lot of the things we’ve done at Dell, in terms of supply chain and collaboration and information flow-integrating these kinds of systems-has helped to democratize the market by bringing down prices. Owning a personal computer is now widely accessible.

But the industry is really very much in its infancy. We still have a long way to go in terms of improving our products and making them easier to use. In the future it’s going to be easier to connect disparate systems together and get to the next level of productivity-and that’s very, very exciting. There will always be big, underpenetrated markets just looking for improved productivity, regardless of economic conditions. So I have lots of optimism for productivity in the future.

I’m also excited about wireless Internet access. We live in a mobile world. People are constantly on the move, but their fundamental needs don’t go away when they leave their homes or offices. They want to stay productive, and they want to keep in touch. Wireless technology lets them do that.

TR: What’s the biggest lesson you’ve learned about innovation?
Dell: To encourage it and allow it to happen. If you try to do it all from the center of the company, it doesn’t work. You have to break things down into focused units that have clear objectives, so everyone in the company is driving to innovate within their particular customer area. We have to carefully decide how we’re going to allocate our resources. And we have to allow for a measure of experimentation. When you stop experimenting, you’re dead-because then you have no ideas, you have no breakthrough thinking.

A couple of years ago, one of our teams came in and said, we got this idea-just bear with us a second-we want to take a 15-inch LCD [liquid crystal display] screen and put it in a notebook computer. I said, “What are you talking about? That’s not a notebook, that’s a portable desktop.” They said, “No, no, this will be a high-end notebook, and it’s going to be 10 percent of the market.” Well, it was risky, both in technological terms and market acceptance. Would the product be too heavy? Did our customers really want a large screen on a notebook? But we took the risk, and the idea turned out to be a huge success. We have plenty of examples where we’ve innovated and failed, but we have more where we’ve succeeded.

TR: What’s your personal role in all this?
Dell: When I see things that I think are important, I’ll push on-with wireless, say, and also by nurturing things when they’re in the skunk works stage and don’t necessarily have the organization’s full support.

I’m the agitator for progress and change.

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