In the notoriously competitive technology industry, Dell Computer remains the golden boy. Currently ranked number one in the US desktop computer market and number two (after Compaq) in Europe, it has placed the Republic at the centre of its European activities since it established here seven years ago. Now it is on course to become one of the State's biggest employers.
In January, Dell announced a massive increase of its workforce, involving more than 3,000 new jobs, in a £180 million expansion which was the largest announced in the State's history. With 80 per cent of the additional 3,000 staff expected to be employed by Christmas, Dell is well ahead of its target, already employing 3,400 people in the Republic, of which 2,800 are in Limerick.
The announcement today of a further 1,700 jobs will eventually bring its total employment figure in the Republic to some 6,000 people, assuming, as the company itself notes, that market conditions remain strong in the years ahead. The most tangible sign of the company's commitment to Ireland is the decision to build a third manufacturing plant here, adjacent to the existing main facility in Raheen, Limerick, involving a further investment of some £90 million.
Limerick has been the main beneficiary of Dell's presence here, and it recently came to the rescue of the AST plant at Castletroy, which closed earlier this year and was taken over by Dell as its second European manufacturing plant.
Since its establishment, the company has grown at more than three times the industry rate on a unit shipments basis. Mr Michael Dell, at 33, has doggedly steered his company upward since he set up from home with $1,000 (£714) in 1984, at the tender age of 19. From humble beginnings buying excess computer parts from retailers and upgrading PCs for resale, today he is worth $6.4 billion and is the computer industry's longest-tenured chief executive officer.
The unique ingredient he brought to the business was the extremely simple but hugely cost effective "direct model" - building computers to order and selling directly to customers, thus cutting out the middle man. This strategy meant Dell never built up huge piles of unsold inventory. It also developed "just-in-time" delivery of all computer components to its factories, so paid-for materials would never be lying around factories for months.
Dell's other advantage is its ability to respond immediately to technological advances. As there has been continuous movement - with computer chip processing speeds doubling at regular intervals - Dell has always been first to market with fully-operational PCs. This has given it a reputation as being the most up-to-the-minute PC manufacturer.
The competition never reckoned on direct buyers accounting for nearly a third of the PC business. Now Mr Dell expects his company to aim for an 810 per cent share of the $250 billion PC industry by 2000. While most other major PC makers - except Gateway 2000, a company whose Dublin plant US President Bill Clinton visited yesterday - are experiencing a difficult period, Dell has continued to prosper. In its most recent quarter, Dell posted profits of $346 million on sales of $4.33 billion, reflecting a 54 per cent rise in sales over the same period last year. Its last annual results showed sales of $15 billion and it now employs 20,800 people worldwide.
The Internet has also proven to be a trump card for Dell. The company now has online sales of more than $5 million a day, seven days a week. Mr Dell intends to conduct half the company's business via the Web by 2000. Now Dell is expanding its range of products into servers and workstations, and introducing a range of Internet-based ordering and service options for larger accounts.
Ireland acts as Dell's gateway to the European market, with the Limerick base accounting for 25 per cent of total sales. A further expansion of its Irish operation is evidence of Dell's reluctance to tamper with what has proven to be a very successful formula. If the job promises for the city are to be realised, Dell will have to continue its record of remarkable growth.
