The Hindu Business Line : <I>Inside a `driven' organisation </I>

This is `Dell at a glance' from www1.us.dell.com, about a company that manufactures its computer systems in seven locations. Revenues from the `Asia-Pacific' and `Europe, Middle East and Africa' are $6.6 billion and $12.9 billion, respectively.

The "Asia-Pacific business grew 21 per cent in terms of revenue and 27 per cent in unit sales," reports www.newsone.ca in a story dated February 17.

"China sales grew 28 per cent in terms of units. India - where Dell recently announced preliminary plans for a new factory - grew 43 per cent and South Korea grew 78 per cent."

Dell is a `driven' organisation, writes Steven Holzner in How Dell Does it, from Tata McGraw-Hill (www.tatamcgrawhill.com) .

The book tells the story of a company that is just about two decades old and yet leading the pack in a highly competitive industry, with a 17.6 per cent worldwide market share.

`Going direct to the customer' has been the hallmark of the company, and has served it well, by saving 25 per cent to 45 per cent of mark-up on every machine.

"The middlemen allergy at Dell is deep," notes Holzner.

When the company's sales staff felt threatened by the Internet, Dell explained that customers often customised their PCs online, and called only to actually order. The "Internet was not a threat, but a source of highly qualified leads."

Cost is a key component of the Dell mix. "Cutting costs at Dell is an obsession, and the customer, for the most part, is the winner."

Fortune magazine described `the Dell Effect' in the computer business, thus, in June 2005: Dell "spots a market where others are making fat profits, figures out how to deliver the same stuff for less, and then drains the profits right out of the pool."

Quality is important too. "Dell is sometimes dismissed as simply a discount tech manufacturer," writes Holzner. But it does good technical work, he adds.

"Dell can take standard components and drive them like few others can."

Dell, therefore, waits "until the components that go into a product are standardised and available from a number of suppliers at competitive prices."

It knows "when to step into markets and how to take them over as market sectors moved from innovation to standardisation."

As a result, R&D spend is less than 1 per cent of sales, compared to 6 per cent in HP and IBM. Michael Dell, the founder, would say. "Our job is not to reinvent the things that an Intel or a Microsoft are creating... Our job is to understand what the customers' requirements are." To him, `magic' lies at the intersection of technologies and customer needs.

In a ComputerWorld interview Dell's CTO Kevin Kettler had shared `one of the best-kept secrets' - that the company has core teams working with silicon designers to meet customer requirements.

"We are down at very low levels with chip set architectures, chip set partitioning, processor interfaces, processor architectures."

Essential lessons for accountants are in a chapter titled `have zero tolerance for inventory'. First of three golden rules at Dell are: `Disdain inventory'. The other two are `listen to the customer,' and `never sell indirect'. But how little is inventory? "In 2000, Dell had about 6 days' worth of inventory; in 2005, in its Austin factory, it's down to 5 to 7 hours. In some areas, it's 2 hours." That way, the company's target of $80 billion in sales by 2009 may need revision... upward.

Must read.

Before addresses vanish!

Most of today's Internet uses IPv4, and it is now nearly twenty years old, informs www.ipv6.org, the site with information on Internet Protocol Version 6 or IPv6. Isn't IPv4 working okay?

Yes, it "has been remarkably resilient in spite of its age, but it is beginning to have problems," such as shortage of addresses.

"Conservative studies estimate the IPv4 address-space exhaustion by February 2041, and the exhaustion of the IPv4 unallocated address pool by April 2020.

More aggressive models predict even earlier dates such as 2009." Thus informs Deploying IPv6 Networks, from Cisco Systems (www.ciscopress.com) , authored by Ciprian Popoviciu, Eric Levy-Abegnoli, and Patrick Grossetete.

In IPv4, the address has a fixed size of 32 bits, allowing up to 2 to the power 32 addresses (roughly 4 billion), such as `203.199.211.197'. In Version 6, bits used are 128, with space available for longer.

The authors point out that there is waste in the current IPv4 addresses; for instance, "only 3 per cent of the allocated addresses were actually in use." IPv6 isn't the final solution; it is only an evolutionary step for IP, opine the authors.

Is IPv6 more secure than IPv4? "IPv6 is neither more nor less secure than IPv4," say the authors. "Both protocols face most of the same threats. "The relatively small-sized IPv6 deployments of past years did not render them uninteresting to hackers." The book deals with characteristics of different threats, and best practices to ward them off.

For example, to minimise attacker's chance to discover active hosts, the authors advise, "Do not assign easy-to-guess addresses to key systems and network elements. Stop Internet Control Message Protocol (ICMP)-based scanning. Implement edge security measures. Enforce host and application security."

Part II of the book has deployment case studies. "With a presence in more than 40 countries, AC Corporation's business is founded on innovation that delivers the best set of agricultural products and services," begins one such case. "While visiting Japan, the CEO saw a demonstration of IPv6. Back from his trip to Asia, he asks the IT team to study the impact of this new technology.

He is interested in the potential application of some of the new industrial and consumer devices, such as IP video surveillance cameras and industrial sensors... "

A book you can't wait to read till after the boss returns!

Tailpiece

"My first program was to print, `Hello World' with a difference."

"Such as, in various fonts?"

"No, with a `Miss' in the middle!"

Books2Byte@TheHindu.co.in