Michael Dell, who started a computer business in his college dorm room and turned it into the world's biggest personal computer company, said Thursday that he would step down as chief executive of Dell Inc but would remain chairman.
Kevin Rollins, Dell's president, will become the chief executive and join Dell's board. The change will be effective in July, just after the 20th anniversary of the company's founding.
"This is a recognition of the great job that Kevin has been doing at the company," Michael Dell said in a telephone interview on Thursday. "It creates a positive dynamic for him in the company and with customers."
Michael Dell said that he would continue to spend just as much time at work as he does now, doing largely the same things. While both executives are involved in major decisions, Dell looks a little more at customer issues and technology while Rollins focuses on operations and strategy.
"This is a pretty subtle shift, to tell the truth," Dell said.
Dell said the move had nothing to do with calls by some corporate reform activists for companies to split the chairman and chief executive jobs. On Tuesday, the Walt Disney Co, under pressure from dissident shareholders, stripped its chief executive, Michael Eisner, of the chairman's title. Dell has not come under this sort of investor pressure.
"The encouraging thing about this, given all the turmoil at Disney, is what a peaceful transition of power this is," said Andrew Neff, an analyst at Bear Stearns. He said that the change was positive for Dell because it reassures investors that Rollins will not leave to become chief executive at some other company.
Rollins said the promotion was not a result of an offer from any other company.
T.R. Reid, a company spokesman, said that Michael Dell had only started to discuss the idea of shifting the chief executive title to Rollins with directors in the last week in advance of a board meeting on Thursday in New York.
Michael Dell is following the lead of several other prominent technology executives who gave up the chief executive spot at their companies. In 1998, Craig Barrett took over as chief executive of Intel from Andrew Grove. And in 2000, Bill Gates handed the chief executive job at Microsoft to Steve Ballmer. Both Grove and Gates remained chairman at their companies.
Rollins, who had been a partner at Bain & Co, a consulting firm, joined Dell in 1996 as the senior vice president for strategy. He became Dell's president in 2001, and his office shares an always-open sliding glass door with that of Michael Dell.
"Michael is very secure and he doesn't feel like he has to have every title," said Steven Milunovich, an analyst with Merrill Lynch. "He and Kevin have complementary skills and they both work together."
Dell, based in Round Rock, Texas, has become the largest and the only consistently profitable company in the personal computer business. It has mastered the business model of selling computers directly to customers who order over the telephone or the Web. It builds computers to order, keeping the cost of its inventory low. This approach makes it possible for the company to offer better service and lower prices.
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