Michael Dell returns as CEO at namesake company; Rollins out

Dell has lost market share in recent quarters to HP

Dell Inc. said late today that founder and Chairman Michael Dell is returning to the role of CEO, effective immediately. He replaces Kevin Rollins, who has resigned and is leaving the board.

Dell will also continue as chairman of the company.

"The board believes that Michael's vision and leadership are critical to building Dell's leadership in the technology industry for the long term," Samuel A. Nunn, presiding director of Dell's board, said in a statement. "There is no better person in the world to run Dell at this time than the man who created the direct model and who has built this company over the last 23 years."

Dell has lost market share to a reinvigorated Hewlett-Packard Co. in recent quarters.

Michael Dell founded the company in 1984 and has served as the chairman of its board since its founding. He also served as CEO until 2004.

"Dell has tremendous opportunities ahead of it," Dell said in a statement. "I am enthusiastic about Dell 2.0, which includes our plan to provide the best customer experience, build a strong global services business and ensure our products deliver the best long-term customer value."

He went on to praise Rollins: "Kevin has been a great business partner and friend. He has made significant contributions to our business over the past 10 years. I wish him much success in the future."

The company also announced that it expects its fourth-quarter results to be below the average of Thomson First Call estimates for both revenue and earnings per share.

The announcement of Rollins' departure was made public after the close of financial markets in the U.S.

Charles King, an analyst at Pund-IT Inc. in Hayward, Calif., said the CEO switch comes for Dell at a key time, just as Microsoft Corp.'s releases of Windows Vista and Office 2007 mate with powerful new dual-core processors from Intel Corp. and Advanced Micro Devices Inc. Those advances are "shaping up to be a big thing for PC vendors," King said. "If a change was going to be made, now would be a good time to do it."

The consensus in the IT world so far is that the adoption of Vista will be fairly slow, he said, so PC vendors will have to be ready later when demand kicks in. "The strategy for 2007 is probably pretty much in place ... but it's important for them to have both feet on the ground and ready for the 2007 holiday season, where they'll probably see the biggest boost for PC sales," King said.

"Michael Dell is a smart guy," King said. "The next 12 to 14 months will be about as important as it gets for a PC vendor."

Computerworld's Todd R. Weiss and Reuters contributed to this report.

Copyright © 2007 IDG Communications, Inc.

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