All things considered, Dell's third-quarter results next week are expected to show the computer manufacturer is having a good year.

The company's share price has recovered well from its September low, reflecting a performance at odds with many of its competitors. Meanwhile, its custom-built European manufacturing facility in Limerick has been basking in the glow of being the most efficient of all the company factories.

The events of September 11th occurred in the middle of Dell's third quarter, but the company stuck to the guidance figures issued in August.

"We were already well down a path in making the adjustments within the company," says Nicky Hartery, the man at the helm of Dell Ireland which supplies Europe, the Middle East and Africa (EMEA).

Mr Hartery grew up on a farm in Kilbarry, outside Waterford, and runs a 400-acre stud farm in west Limerick - a short commute from his office at the Raheen Industrial Estate in Limerick. He has two employees to watch over the thoroughbred horses and Hereford and Black Angus cattle.

A softly spoken, easy-going manner gives no hint of the ruthlessness a Dell senior vice-president needs to contribute 20 per cent of Dell's annual turnover of $32.5 billion (€36 million), or 5.5 per cent of all Irish exports, and maintain pole position for the two manufacturing plants in Limerick.

"Being number one is always a tenuous position because everybody else is trying to get by you, so you've got to work a lot smarter to stay there, and that is what the intention is," he says.

Earlier this year, the first sign of trouble for the company in its 10-year history in the State came when 200 voluntary redundancies were sought from administrative staff in Limerick in May as part of a worldwide reduction of 4,000 staff. At the time, staff were told by Mr Hartery that the measures were to pare productivity costs to a minimum.

In the event, some of the staff were able to take their six weeks' pay per year of service and join the queue for production line work. A further 125 were made redundant from Cherrywood, Dublin, and Bray in June.

"We looked out six to 12 months and said 'how do we need to be positioned to be competitive so that we can deliver the value and continue growing our business, and be prepared for the next take-off whenever the next take-off occurs?'

"When you look at no-value and low-value activity, it is really important to eliminate them because they are not doing anything for the customer."

But the measures may not have been so much a digging-in as a battle cry against competitors in a depressed market. For the past two weekends in October, 400 contract staff were brought in to Limerick to fill orders. Worldwide, the strategy has worked - at the expense of reduced profits. Earnings per share and prices are down, but PC shipments and market share are up.

The company has been the world's number one PC manufacturer since April.

Not surprisingly, Mr Hartery adopts a sceptical view of the Hewlett-Packard/Compaq merger.

"We would be happy with the merger of HP and Compaq because we would see a lot of fertile ground for us to take opportunity.

"You have companies which are contracting or exiting and then new markets which are coming. We have been able to work diligently to take advantage of those opportunities that have come up. The level of pain that has been here has not been as significant."

The developing markets are the eastern European countries where he believes new Dell factories could be built.

"As the direct markets grow in central or eastern Europe, it will be important for Dell to have a position in those countries at some stage, doing the fulfilment for products and so forth. Will there be a time when Dell will have a factory in central Europe or eastern Europe? Potentially there will be a time. Yes."

In the meantime, Dell has a 10.4 per cent market share in EMEA, "so there is plenty of opportunity to grow".

He likens the products - desktops, work stations, laptops and servers - to cars. As long as you have disposable income, you will want to change them. Companies typically operate on a three-year depreciation cycle for their IT equipment.

"Every three years that budget comes up for renewal. Looking at that now, technologically you are probably out of date in that three-year period as well, because of software changes.

"When you come into the crisis-type situation that we are looking at today, people may delay six months. But it is more of a delay than a cancellation."

Over the next year, IT companies will be looking to companies that upgraded in 1999 to avoid any Y2K problems. They will also be relying on Microsoft's new XP operating system to revive the 11.3 per cent drop in computer sales since September 11th.

"Every time you have had a major launch by Microsoft, it kind of kick-starts another round in the computer world."

Dell's presence in Limerick means the city has something like an addict's dependency on the company. Of Dell's annual £87.8 million (€111.5 million) wage bill in the State, £62.7 million is paid to the 4,000 staff in Limerick, while an estimated 1,500 more people are involved in sub-supply operations. That translates into a lot of mortgages.

Does Mr Hartery think of the day when he will have to pull the plug on the whole operation?

"It's not something I think about for the simple reason that the whole process we are driving through here is to create a better future for the employees that are here . . . If we continue to re- invent ourselves, then everything should be fine. When we stop re-inventing ourselves, it is a big problem."

Worldwide, alliance-building has become part of that process. On October 22nd, the company said it would market EMC's Clarion mid-range data storage line in a five-year pact aimed at creating $5 billion worth of business.

But why has Dell not developed its own mid-range storage equipment? "It's a question of, I guess, the technology and the R&D element of it, and our need to grow at the pace we are growing at, and that fills out a section of our server business which we would not be strong in today. So it allows us to leap-frog quickly into that area and bring to our customer base a product that is already available there."

The alliance is also part of a strategy to diversify from the company's dominance in the PC market. The focusing on notebooks (laptops) and the developing of servers and storage has occurred over the past two years.

"Particularly, we have started to grow dramatically in the server and storage area. That is, kind of, our play of the future - server storage and services."

The European Expert Centre, based in Bray, is focused on the server business, providing an online diagnostic service.

"What you find when you look at the price of a server today - it is affordable. People will gravitate to more storage density, more speed, more capacity."

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