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. Operating from Michael Dell's off-campus dorm room at Dobie Center, the startup aimed to sell IBM-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. 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"), 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.
Dell, Inc. appears to have re-focused on reduced costs rather than on innovation, in line with the company's history of delivering units at the lowest cost possible via its direct-sales model. In an interview with Business Week, Mr. Dell stated "this is a company which can execute quite a bit better on things it already knows how to do.
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Harvard Mark I
In 1939, development began at IBM's Endicott laboratories on the Harvard Mark I. Known officially as the Automatic Sequence Controlled Calculator, the Mark I was a general purpose electro-mechanical computer built with IBM financing and with assistance from IBM personnel, under the direction of Harvard mathematician Howard Aiken. Its design was influenced by Babbage's Analytical Engine, using decimal arithmetic and storage wheels and rotary switches in addition to electromagnetic relays. It was programmable via punched paper tape, and contained several calculation units working in parallel. Later versions contained several paper tape readers and the machine could switch between readers based on a condition. Nevertheless, the machine was not quite Turing-complete. The Mark I was moved to Harvard University and began operation in May 1944.
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