Strengths and Weaknesses

Strengths

• Conservative, reliable design
• Most functions built into motherboard: graphics, sound and Ethernet as well as various i/o ports.
• Designed to be simple to deploy and maintain. Nearly all necessary drivers load from Windows CDs.
• Large organizations deploy them in quantity. Used units can be very inexpensive because supply exceeds demand.

Weaknesses

• Onboard video with limited memory unsuited to graphics-intensive applications such as gaming or modeling
• Low profile desktop models have limited expansion capability: 3 pci slots, no AGP or PCI-x, one bay for optical drives, one hard disk drive, two memory slots. Small form factor models are even more restrictive with slim optical drives and low-profile expansion cards.
• Memory modules must meet very specific specifications. Generic memory often does not work.
• Intel chipsets support less memory expansion than competing chipsets.
• No provision for overclocking
• Motherboards and power supplies are proprietary design.
• Electrolytic capacitors in some models are disproportionately likely to go bad and need replacement

[edit] Name

OptiPlex is a portmanteau of "opti" (meaning optimal) and "plex" (meaning parts or units.)^[1]

[edit] Chassis

The newest OptiPlex models break from Dell's proprietary form factors and follow, for the most part, the BTX standard.

The OptiPlex series comes in various sizes which have evolved as the style of chassis has changed.

[edit] Classic beige

In the classic beige chassis:

[edit] Midnight-gray

In the recent^[update] midnight-gray chassis (with the flip-up door):

[edit] BTX

Current^[update] model BTX chassis:

[edit] Models, in relative chronological order

Dell routes technical support queries according to component-type and to the level of support purchased. Dell Inc brands its service agreements at five levels for their business customers:^[60]

1. Basic support provides business-hours telephone support and next business-day on-site support.
2. Silver support provides 24×7 telephone support and 4-hour on-site support after telephone-based troubleshooting.
3. Gold support provides additional benefits over and above Silver support, including: customer-declared severity; priority access to support; expedited escalation of support; 4-hour on-site support in parallel with telephone-support.
4. Platinum Plus support provides additional benefits to Gold Support, including: performance benchmarking; real-time tracking; custom planning and reporting; a dedicated technical account-manager.
5. 2-hour on-site support, offered in some cities: mostly limited to major metropolitan areas.

Dell's Consumer division offers 24x7 phone based and online troubleshooting rather than only during business hours. Gold Technical support is not offered for customers purchasing through the consumer department, and neither is Same-Day Onsite response.

On February 4, 2008 Dell launched a revamped services-and-support scheme for businesses named "ProSupport", offering customers more options to tailor services to fit their needs. Rather than take a one-size-fits-all approach, Dell has put together packages of options for each category of its customers: small and medium-sized businesses, large businesses, government, education, and health-care- and life-sciences.

Dell now offers separate support options for IT staff and for non-IT professionals. For the latter, the company offers "how-to" support for software applications, such as Microsoft Office. Dell also offers collaborative support with many third-party software vendors. For IT departments, Dell offers "fast-track dispatch" of parts and labor and access to a crisis-center to handle major outages, virus-attacks, or problems caused by natural disasters.

Besides offering response-options for handling problems, Dell has launched "Proactive Maintenance", which offers assessment and recommendations for updating drivers and firmware and for the application of customer-approved patches and system-updates. Dell also offers assessment-services for storage area networks, as well as for Dell's computing hardware.

The new offerings replace Dell's tiered services-structure in which customers could choose from a variety of service levels, such as platinum, gold, or silver. The latest system takes a more customizable approach to support.

Manufacturing

In the 1980s Dell became a pioneer in the “configure to order” approach to manufacturing – delivering individual PCs configured to customer specifications. In contrast, most PC manufacturers in those times delivered large orders to intermediaries on a quarterly basis.^[50]

To minimize the delay between purchase and delivery, Dell has a general policy of manufacturing its products close to its customers. This also allows for implementing a just-in-time (JIT) manufacturing approach, which minimizes inventory costs. Low inventory is another signature of the Dell business model – a critical consideration in an industry where components depreciate very rapidly.^[51]

Dell’s manufacturing process covers assembly, software installation, functional testing (including "burn-in"), and quality control. Throughout most of the company’s history, Dell manufactured desktop machines in-house and contracted out manufacturing of base notebooks for configuration in-house.^[52] However, the company's approach appears to have started to change. The 2006 Annual Report states “we are continuing to expand our use of original design manufacturing partnerships and manufacturing outsourcing relationships.” The Wall Street Journal reported in September, 2008 that “Dell has approached contract computer manufacturers with offers to sell" their plants.^[53]

Assembly of desktop computers for the North American market takes place at Dell plants in Austin, Texas (original location), Lebanon TN and Nashville, Tennessee (opened in 1999), Winston-Salem NC (opened in 2005) and at the Miami, Florida facility of its Alienware subsidiary. Dell servers come from Austin TX. Dell has moved some of its desktop assembly into Mexico (near the border with El Paso, Texas) for computers that sold in the United States.^{[citation needed]}

Dell assembles computers for the EMEA market at Limerick in the Republic of Ireland, and employs about 4,500 people in that country. Production at the Limerick facility will cease in 2009 and will relocate to facilities in Poland and Asia. European Manufacturing Facility 1 (EMF1, opened in 1990) and EMF3 form part of the Raheen Industrial Estate near Limerick. EMF2 (previously a Wang facility, later occupied by Flextronics, situated in Castletroy) closed in 2002,^{[citation needed]} and Dell Inc has consolidated production into EMF3 (EMF1 now contains only offices^[54]). Dell’s Alienware subsidiary also manufactures PCs in an Athlone, Ireland plant. Construction of EMF4 in Łódź, Poland has started^[update]: Dell started production there in autumn 2007.^[55]

Dell opened plants in Penang, Malaysia in 1995, and in Xiamen, China in 1999. These facilities serve the Asian market and assemble 95% of Dell notebooks. Dell Inc has invested an estimated $60 million in a new manufacturing unit in Chennai, India, to support the sales of its products in the Indian subcontinent. Indian-made products will bear the "Made in India" mark. In 2007 the Chennai facility had the target of producing 400,000 desktop PCs, and plans envisaged it starting to produce notebook PCs and other products in the second half of 2007.^{[citation needed]}

Dell moved desktop and PowerEdge server manufacturing for the South American market from the Eldorado do Sul plant opened in 1999, to a new plant in Hortolandia, Brazil in 2007.^[56]

Dell began manufacturing in Limerick in 1991 and went on to become Ireland's largest exporter of goods and its second-largest company and foreign investor. On January 8, 2009, Dell announced that it would move all Dell manufacturing in Limerick to Dell's new plant in the Polish city of Łódź by January 2010.^[57] European Union officials said they would investigate a €52.7million aid package the Polish government used to attract Dell away from Ireland.^[58]

Scope and brands

The corporation markets specific brand names to different market segments:

• Business/Corporate class: including OptiPlex, Latitude, and Precision, where the company's advertising emphasizes long life-cycles, reliability and serviceability:

• OptiPlex - office desktop computer systems
• Vostro - office/small business desktop and notebook systems
• n Series - desktop and notebook computers shipped with Linux or FreeDOS installed
• Latitude - commercially-focused notebooks
• Precision - workstation systems and high-performance notebooks. (Some of them including Linux pre-installed.^[46])
• PowerEdge - business servers
• PowerVault - direct-attach and some network-attached storage (NAS)
• PowerConnect - network switches
• Dell/EMC - storage area networks (SANs)
• EqualLogic - enterprise class iSCSI SANs

• Home Office/Consumer class: including Inspiron and XPS brands, emphasizing value, performance and expandability:

• Dimension (discontinued) - consumer desktop systems.
• Inspiron - budget desktop and notebook computers.
• Studio - mainstream desktop and laptop computers.
• XPS - high-end desktop and notebook computers.
• Studio XPS - high-end design-focus of XPS systems and extreme multimedia capability
• Alienware (XPS Extreme) - high-performance gaming systems rivaling HP's gaming division, VoodooPC
• Adamo - high-end luxury laptop to compete with the MacBook Air.

• Peripherals: Dell has also diversified its product line to include peripheral products such as USB keydrives, LCD televisions, and printers.

• Dell monitors LCD TVs, plasma TVs and projectors for HDTV and monitors

• Services and support:

• Dell On Call - extended support services (mainly for the removal of spyware and computer viruses)
• Dell Support Center - extended support services (similar to "Dell On Call") for customers in the EMEA. The Solution Centers also support hardware for customers outside of warranty.
• Dell Business Support - a commercial service-contract that provides an industry-certified technician with a lower call-volume than in normal queues; it covers hardware- and some software-support.
• Dell Everdream Desktop Management - "Software as a Service" remote-desktop management. Lyndon Rive, Elon Musk and other partners sold Everdream to Dell.^[47]
• Your Tech Team - a new^[update] support-queue available to home users who purchased their systems either through Dell's website or through Dell phone-centers. These customers gain access to a specialized queue. Customers can request a technician with whom they have worked previously, and the technicians can troubleshoot a wider range of problems — including some that would fall under the "Dell on Call" category. Data backup and virus removal remain out-of-scope for this queue.

Dell also offers Red Hat and SUSE Linux for servers; as well as "bare-bones" computers without pre-installed software (available on n Series by default and by request on XPS and Inspiron systems) at significantly lower prices. Due to Dell's licensing contract with Microsoft, Dell allegedly^{[citation needed]} cannot offer those systems on its website and customers have to request them explicitly. (Dell does offer those systems via its web site. ^[48] ). Dell has to ship such systems with a FreeDOS disk included in the box and must issue a so-called "Windows refund" or a merchandise credit after sale of the system at the "regular" retail price.

• Discontinued products/brands:

• Axim - PDAs using Microsoft's Windows Mobile (discontinued on April 9, 2007^[49])
• Dimension - home and "small office, home office" desktop computers (discontinued July 2007; replaced by Inspiron and Vostro desktops)
• Dell Digital Jukebox - MP3 players (discontinued August 2006)
• Dell PowerApp - application-based severs
• Dell Omniplex - 486- and Pentium-based desktop and tower computers previously supported to run server and desktop operating systems.

First attempt (2000)

In 1998 Ralph Nader asked Dell (and five other major OEMs) to offer alternate operating systems to Microsoft Windows, specifically including Linux, for which "there is clearly a growing interest"^[18][19] Possibly coincidentally, Dell started offering Linux notebook systems which "cost no more than their Windows 98 counterparts" in 2000,^[20] and soon expanded, with Dell becoming "the first major manufacturer to offer Linux across its full product line"^[21] However, by early 2001 Dell had "disbanded its Linux business unit."^[22]

The reason(s) for such a quick reversal remain the subject of debate. Court documents accused Microsoft of coercing OEMs to drop Linux:

Microsoft executive Joachim Kempin described his plan of retaliation and coercion to shut down competition from Linux: "I am thinking of hitting the OEM harder than in the past with anti-Linux actions" and will "further try to restrict source code deliveries where possible and be less gracious when interpreting agreements — again without being obvious about it," continuing "this will be a delicate dance"^[23]

While in a 2003 interview Michael Dell denied that Microsoft pressured Dell Inc. into doing an about-face with regard to desktop Linux, citing a lack of sales: "unfortunately the desktop Linux market didn't develop in volume. It's more of a server opportunity" but adding: "We continue to offer Linux on the desktop and there is nothing else to say."^[24] However, a 2004 report noted that Dell no longer offered pre-installed desktop Linux:

So what does it mean "factory installed Linux"? If you want Dell to install Linux for you, first add on $119. But here is the annoying part. They won't send you a computer with Linux pre-installed. They sell you the computer and the boxes of software on the side, and then they make an appointment to send you someone who comes to your house or business and installs it there.^[25]

[edit] Ubuntu on Dell systems

On February 26, 2007 Dell announced that it had commenced a program to sell and distribute a range of computers with pre-installed Linux distributions as an alternative to Microsoft Windows. Dell indicated that Novell's SUSE Linux would appear first.^[26] However, Dell on February 27, 2007 announced that its previous announcement related to certifying the hardware as ready to work with Novell SUSE Linux and that it (Dell) had no plans to sell systems pre-installed with Linux in the near future.^[27] On March 28, 2007, Dell announced that it would begin shipping some desktops and laptops with Linux pre-installed, although it did not specify which distribution of Linux or which hardware would lead.^[28] On April 18, 2007 a report appeared suggesting that Michael Dell used Ubuntu on one of his home systems.^[29] On May 1, 2007, Dell announced it would ship the Ubuntu Linux distribution.^[30] On May 24, 2007, Dell started selling models with Ubuntu Linux 7.04 pre-installed: a laptop, a budget computer, and a high-end PC.^[31]

On June 27, 2007, Dell announced on its Direct2Dell blog that it planned to offer more pre-loaded systems (the new Dell Inspiron desktops and laptops). After the IdeaStorm site supported extending the bundles beyond the US market, Dell later announced more international marketing.^[32] On August 7, 2007, Dell officially announced that it would offer one notebook and one desktop in the UK, France and Germany with Ubuntu "pre-installed". At LinuxWorld 2007 Dell announced plans to provide Novell's SUSE Linux Enterprise Desktop on selected models in China, "factory-installed".^[33] On November 30, 2007 Dell reported shipping 40,000 Ubuntu PCs.^[34] On January 24, 2008 Dell in Germany, Spain, UK and France launched a second laptop, a XPS M1330 with Ubuntu 7.10, for 849 euro or GBP 599 upwards.^[35] On February 18, 2008, Dell announced that the Inspiron 1525 would have Ubuntu as an optional operating system.^{[citation needed]} On February 22, 2008 Dell announced plans to sell Ubuntu in Canada and in Latin America^[36] From September 16, 2008, Dell has shipped both Dell Ubuntu Netbook Remix and Windows XP Home versions of the Inspiron Mini 9 and the Inspiron Mini 12. As of 2009^[update] Dell ships the Inspiron Mini 9 and the Inspiron Mini 12 laptops with Ubuntu version 8.04.^{[citation needed]}

[edit] Personnel

On January 31, 2007 Michael Dell returned to the company as CEO. As chairman of the board, Mr. Dell had had significant input into the company's operations during Rollins' years as CEO. However with the return of Michael Dell as CEO, the company saw immediate changes in operations, the exodus of many senior vice-presidents and new personnel brought in from outside the company.

Departures announced include:

• Kevin Rollins, CEO^[37]
• James Schneider, CFO^[37]
• John Medica, senior vice president, consumer products^[38]
• Joe Marengi, senior vice president, Americas^[38]
• John Hamlin, senior vice president, worldwide online operations^[39]
• Paul McKinnon, senior vice president, human resources^[38]
• Rosenda Parra, senior vice president/general manager, home and small business group^[40]
• Glenn E. Neland, senior vice president, procurement^[41]

Additions announced include:

• Michael Dell, CEO and co-Chairman of the Board (previously Chairman of the Board)
• Don Carty, CFO and co-Chairman of the Board (previously Board member)
• Michael R. Cannon, former CEO of Solectron, as President, Global Operations^[42]
• Ron Garriques, who formerly headed Motorola's mobile phone unit, as President, Global Consumer Group^[43]
• Stephen F. Schuckenbrock, Senior Vice President, Global Services^[41]

Mr. Dell announced a number of initiatives and plans (part of the "Dell 2.0" initiative) to improve the company's financial performance. These include:

• elimination of 2006 bonuses for employees with some discretionary awards
• reduction in the number of managers reporting directly to Mr. Dell from 20 to 12
• in a noted departure from previous years, "build, partner, and buy" to increase services capabilities
• reduction of "bureaucracy"

On April 23, 2008, Dell announced the closure of one of its biggest Canadian call-centers in Kanata, Ontario — terminating approximately 1100 employees, with 500 of those redundancies effective on the spot, and with the official closure of the center scheduled for the summer. The call-center had opened in 2006 after the city of Ottawa won a bid to host it. Less than a year later, Dell Inc planned to double its workforce to nearly 3,000 workers and to add a new building. Journalists cited a high Canadian dollar and suggested high pay-rates as among the reasons for the cuts.^[44] The company had also announced the shutdown of its Edmonton, Alberta office, losing 900 jobs. In total, Dell announced the ending of about 8,800 jobs in 2007-2008 — 10% of its workforce.^[45] On January 8, 2009 Dell announced the closure of its manufacturing plant in Limerick, Ireland with the loss of 1,900 jobs and the transfer of production to its plant in Poland.

Dell and AMD

When Dell acquired Alienware early in 2006, some Alienware systems had AMD chips. On August 17, 2006, a Dell press-release^[15] stated that starting in September, Dell Dimension desktop computers would have AMD processors and that later in the year Dell would release a two-socket, quad-processor server using AMD Opteron chips, moving away from Dell's tradition of only offering Intel processors in Dell PCs.

CNet's News.com on August 17, 2006 cited Dell's CEO Kevin Rollins as attributing the move to AMD processors to cost-advantage and to AMD technology^[16]. AMD's senior VP in commercial business, Marty Seyer, stated: "Dell's wider embrace of AMD processor-based offerings is a win for Dell, for the industry and most importantly for Dell customers."

On October 23, 2006, Dell announced new AMD-based servers — the PowerEdge 6950 and the PowerEdge SC1435.

On November 1, 2006, Dell's website began offering notebooks based on AMD processors (the Inspiron 1501 with a 15.4-inch (390 mm) display) with the choice of a single-core MK-36 processor, dual-core Turion X2 chips or Mobile Sempron.^[17]

Background and origins

While a student at the University of Texas at Austin in 1984, Michael Dell founded the company as PC's Limited with capital of $1000.^[4] Operating from Michael Dell's off-campus dormitory room at Dobie Center,^[5] the startup aimed to sell IBM PC-compatible computers built from stock components. Michael Dell started trading in the belief that by selling personal computer-systems directly to customers, PC's Limited could better understand customers' needs and provide the most effective computing solutions to meet those needs.^{[citation needed]} Michael Dell dropped out of school in order to focus full-time on his fledgling business, after getting about $300,000 in expansion-capital from his family.

In 1985, the company produced the first computer of its own design — the "Turbo PC", sold for US$795^[6] — which contained an Intel 8088-compatible processor running at a speed of 8 MHz. PC's Limited advertised the systems in national computer-magazines for sale directly to consumers, and custom-assembled each ordered unit according to a selection of options. This offered buyers prices lower than those of retail brands, but with greater convenience than assembling the components themselves. Although not the first company to use this model, PC's Limited became one of the first to succeed with it. The company grossed more than $73 million in its first year of trading.

The company changed its name to "Dell Computer Corporation" in 1988. In 1989, Dell Computer set up its first on-site-service programs in order to compensate for the lack of local retailers prepared to act as service centers. Also in 1987, the company set up its first operations in Ireland; eleven more international operations followed within the next four years. In June 1988, Dell's market capitalization grew by $30 million to $80 million from its June 22 initial public offering of 3.5 million shares at $8.50 a share^[7]. In 1990, Dell Computer Corporation tried selling its products indirectly through warehouse clubs and computer superstores, but met with little success, and the company re-focused on its more successful direct-to-consumer sales model. In 1992, Fortune magazine included Dell Computer Corporation in its list of the world's 500 largest companies.

In 1994, when Dell celebrated 10 years of trading, the company changed its logo to the current^[update] version.

In 1996, Dell began selling computers via its web site.

In 2002, Dell attempted to expand by tapping into the multimedia and home-entertainment markets with the introduction of televisions, handhelds, and digital audio players. Dell has also produced Dell-brand printers for home and small-office use.

In 2003, at the annual company meeting, the stockholders approved changing the company name to "Dell Inc." to recognize the company's expansion beyond computers.

In 2004, the company announced that it would build a new assembly-plant near Winston-Salem, North Carolina; the city and county provided Dell with $37.2 million in incentive packages; the state provided approximately $250 million in incentives and tax breaks. In July, Michael Dell stepped aside as Chief Executive Officer while retaining his position as Chairman of the Board. Kevin Rollins, who had held a number of executive posts at Dell, became the new CEO.

In 2005, the share of sales coming from international markets increased, as revealed in the company's press releases for the first two quarters of its fiscal 2005 year. In February 2005 Dell appeared in first place in a ranking of the "Most Admired Companies" published by Fortune magazine. In November 2005 BusinessWeek magazine published an article titled "It's Bad to Worse at Dell" about shortfalls in projected earnings and sales, with a worse-than-predicted third-quarter financial performance — a bad omen for a company that had routinely underestimated its earnings. Dell acknowledged that faulty capacitors on the motherboards of the Optiplex GX270 and GX280 had already cost the company $300 million. The CEO, Kevin Rollins, attributed the bad performance partially to Dell's focus on low-end PCs.

In 2006, Dell purchased the computer hardware manufacturer Alienware. Dell Inc.'s plan anticipated Alienware continuing to operate independently under its existing management. Alienware expected to benefit from Dell's efficient manufacturing system.^[8]

On January 31, 2007, Kevin B. Rollins, CEO of the company since 2004, resigned as both CEO and as a director, and Michael Dell resumed his former role as CEO. Investors and many shareholders had called for Rollins' resignation because of poor company performance. At the same time, the company announced that, for the fourth time in five quarters, earnings would fail to reach consensus analyst-estimates.

In February 2007 Dell became the subject of formal investigations by the US SEC^[9] and the U.S. Attorney for the Southern District of New York.^[10] The company has not formally filed financial reports for either the third or fourth fiscal quarter of 2006, and several class-action lawsuits^[11] have arisen in the wake of its recent^[update] financial performance. Dell Inc's lack of formal financial disclosure would normally subject the company to de-listing from the NASDAQ,^[12] but the exchange has granted Dell a waiver, allowing the stock to trade normally.^[13]

On March 1, 2007, the company issued a preliminary quarterly earnings report which showed gross sales of $14.4 billion, down 5% year-over-year, and net income of $687 million (30 cents per share), down 33%. Net earnings would have declined even more if not for the effects of eliminated employee bonuses, which accounted for six cents per share. NASDAQ extended the company's deadline for filing financials to May 4.^[14]

Dell, Inc. (NASDAQ: DELL, HKEX: 4331) is a multinational technology corporation that develops, manufactures, sells, and supports personal computers and other computer-related products. Based in Round Rock, Texas, Dell employs more than 76,500 people worldwide as of 2009^[update].^[1]

Dell grew during the 1980s and 1990s to become (for a time) the largest seller of PCs and servers. As of 2008^[update] it held the second spot in computer-sales within the industry behind Hewlett-Packard. The company currently sells personal computers, servers, data storage devices, network switches, software, and computer peripherals. Dell also sells HDTVs, cameras, printers, MP3 players and other electronics built by other manufacturers.

In 2006, Fortune magazine ranked Dell as the 25th-largest company in the Fortune 500 list, 8th on its annual "Top 20" list of the most-admired companies in the United States.^[2] In 2007 Dell ranked 34th and 8th respectively on the equivalent lists for the year. A 2006 publication identified Dell as one of 38 high-performance companies in the S&P 500 which had consistently out-performed the market over the previous 15 years.^[3]

In 2002, IBM strengthened its business advisory capabilities by acquiring the consulting arm of professional services firm PricewaterhouseCoopers. The company has increasingly focused on business solution-driven consulting, services and software, with emphasis also on high-value chips and hardware technologies; as of 2005^[update] it employs about 195,000 technical professionals. That total includes about 350 «Distinguished Engineers» and 60 IBM Fellows, its most-senior engineers. It should be noted, however, that IBM and some other U.S. firms use the term 'engineer' in a broad sense, applying it to technicians from diverse disciplines who may not be graduates from Engineering Schools of recognized Universities.

A chart showing IBM's revenue and net income, 1980–2005.

A chart showing IBM's patent history, 1993–2005.

In 2002, IBM announced the beginning of a US$10 billion program to research and implement the infrastructure technology necessary to be able to provide supercomputer-level resources "on demand" to all businesses as a metered utility.^[15] The program has since then been implemented.^[16]

In the same year its hard disk operations was sold to Hitachi. ^[17]

IBM has steadily increased its patent portfolio since the early 1990s, which is valuable for cross-licensing with other companies. In every year from 1993 to 2005, IBM has been granted significantly more U.S. patents than any other company. The thirteen-year period has resulted in over 31,000 patents for which IBM is the primary assignee.^[18] In 2003, IBM earned 3415 patents, breaking the US record for patents in a single year.^[19]

Protection of the company's intellectual property has grown into a business in its own right, generating over $10 billion dollars to the bottom line for the company during this period.^[20][21] A 2003 Forbes article quotes Paul Horn, head of IBM Research, saying that IBM has generated $1 billion in profit by licensing intellectual property.^[22]

In 2004, IBM announced the proposed sale of its PC business to Chinese computer maker Lenovo Group, which is partially owned by the Chinese government, for US$650 million in cash and US$600 million in Lenovo stock. The deal was approved by the Committee on Foreign Investment in the United States in March 2005, and completed in May 2005. IBM acquired a 19% stake in Lenovo, which moved its headquarters to New York State and appointed an IBM executive, Steve Ward, as its chief executive officer. The company retained the right to use certain IBM brand names for an initial period of five years. As a result of the purchase, Lenovo inherited a product line that features the ThinkPad, a line of laptops that had been one of IBM's most successful products.

As of 2004^[update], IBM had shifted much of its focus to the provision of business consulting & re-engineering services from its hardware & technology focus. The new IBM has enhanced global delivery capabilities in consulting, software and technology based process services—and this change is reflected in its top-line.^[23]

On June 20, 2006, IBM and Georgia Institute of Technology jointly announced a new record in silicon-based chip speed at 500 GHz. This was done by freezing the chip to 4.5 K (−269 °C; −452 °F) using liquid helium and is not comparable to CPU speed. The chip operated at about 350 GHz at room temperature.^[24]. IBM acquires SPSS in July 2009 for $1.2 billion.

Since 1990, the rate of growth of IBM has lagged behind that of the US economy.

IBM's traditional mainframe business underwent major changes in the 1990s, as customers increased their emphasis on departmental and desktop computing. However, the decade of the 1990s began with IBM posting record profits up to that point in its history. This proved illusory as the rental to lease conversion was tapping out, demand for mainframes was waning and corporate downsizing was in full swing. Corporate spending shifted from high profit margin mainframes to lower margin microprocessor-based systems and the growth in IBM's PC business was not nearly enough to offset the company's mainframe revenue decline.^{[citation needed]}

On October 5, 1992, at the COMDEX computer expo, IBM announced the first ThinkPad laptop computer, the 700c. The computer, which then cost US$4350, included a 25 MHz Intel 80486SL processor, a 10.4-inch active matrix display, removable 120 MB hard drive, 4 MB RAM (expandable to 16 MB) and a TrackPoint II pointing device.^[13]

A decade of steady acceptance and widening corporate growth of local area networking technology, a trend headed by Novell Inc. and other vendors, and its logical counterpart, the ensuing decline of mainframe sales, brought about a wake-up call for IBM: after two consecutive years of reporting losses in excess of $1 billion, on January 19, 1993, IBM announced a US$8.10 billion loss for the 1992 financial year, which was then the largest single-year corporate loss in U.S. history.^[14]

That same year, Louis V. Gerstner, Jr. joined IBM and he is widely credited with turning the company around. His strategy to reverse the decision of his predecessor and re-integrate IBM's major divisions to focus on services first and products second, is often heralded as the decision that led the company from the brink of disaster and remains the fundamental underpinning of IBM's strategy today. A byproduct of that decision was a shift in focus significantly away from components and hardware and towards software and services.^{[citation needed]}

Starting in 1995 with its acquisition of Lotus Development Corp., IBM built up the Software Group from one brand, DB2, to five: DB2, Lotus, WebSphere, Tivoli, and Rational.

In 1997 the IBM chess playing computer system Deep Blue, in the match Deep Blue versus Garry Kasparov, was the first computer system to beat a reigning world chess champion.