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Michael Dell on What Really Spurs Demand

"The tech rebound: Hope and caution" (Editorials, May 5) suggests several factors contributing to increased spending on information technology. A better measure of our industry's health and effectiveness is customer demand for computer systems, not how much they're spending. That's because the continuing shift in customer preference to standards-based technology -- and away from expensive proprietary systems -- is further reducing the total cost of computing. The trend, which occurred in PCs years ago, is now extending into servers and data storage, making high-performance computing more affordable and available to businesses and public institutions. For costs as much as 90% lower than those for proprietary systems, organizations are achieving levels of computing power they otherwise may never have been able to acquire.

While the rate and degree of growth remains uncertain, we believe demand will increase over time as the capabilities of standards-based technology continue to evolve. The ripple resulting from productivity and efficiency will be felt throughout the global economy.

Michael Dell

Chairman and CEO

Dell Computer Corp. (DELL)

Round Rock, Tex. Smart, ambitious, and thoughtful are all good labels for Merrill Lynch (MER) Chief Executive Stan O'Neal ("The new Merrill Lynch," Finance, May 5). But not insensitive. Stan was a resident adviser when I was a freshman at General Motors Institute (now Kettering University), and I remember vividly how he dealt with a scared 17-year-old kid from Puerto Rico who was flunking calculus and adjusting to the GM culture. In his trademark "cool" style, Stan listened carefully, cut through the mishmash of emotion and fact typical of the adolescent mind, and delivered career and life management advice that has served me well for many years. Stan O'Neal is undoubtedly as sensitive as any CEO of a major corporation needs to be. He just does not abide fools.

Jos? Antonio Rosa

Weatherhead School of Management

Case Western Reserve University


It is ironic and a bit sad that the firm that became a household name by bringing Wall Street to Main Street now focuses on the "super rich" -- $10 million-plus -- and banishes the small investor to call centers. You are certainly correct in your assessment that such a dramatic change in corporate strategy is fraught with risk. If E. Stanley O'Neal's "bet the farm" approach is successful, he can become the Jack Welch of Wall Street. But if not, thousands of loyal Merrill Lynchers will have needlessly lost their jobs, and Merrill will indeed become takeover bait.

Marvin Clark


What Stan O'Neal did was not a regular tuning of charges vs. revenues. O'Neal realized that damaged accounts cannot generate any more excessive and lucrative commissions, so he transferred them to concentration centers. Then he turned against his financial consultants and canceled, in a dictatorial manner, a decade-old commission-sharing scheme without any kind of compensation.

All commission and trailer revenue generated by accounts that dropped below $250,000, then $500,000, then $1 million, went exclusively into Merrill's pocket.

What Merrill gained in the last period is exactly what the financial consultants lost on revenue sharing. Now O'Neal is running a company that has an increasing number of suing investors and the most unmotivated production team.

George Nakhle

Dubai "Colleges in crisis" (Special Report, Apr. 28) stated that only 1% of entering freshmen earn a B.A. after five years at a for-profit institution. You failed to note that only a very small percentage of those students were seeking a baccalaureate degree. In fact, the graduation rate of degree-seeking students in the for-profit sector compares very favorably with those of public and private nonprofit institutions. Much of the dynamic growth in the for-profit sector in recent years has been in associate- and baccalaureate-degree programs. From 1995 to 2000, the number of degree-seeking students attending for-profit institutions increased by 52%.

Nicholas J. Glakas


Career College Assn.

Washington, D.C.

Your article showed a photograph of the University of Phoenix juxtaposed with a dismal industry statistic on undergraduate graduation rates for private, for-profit colleges. The percentage of University of Phoenix students who earn bachelor's degrees after five years is 63%, which is a very strong completion rate compared with figures you cited for all other sectors -- community colleges (7%), public four-year colleges (47%), and private colleges (62%).

Terri Hedegaard Bishop

Senior Vice-President, Public Affairs

University of Phoenix

Phoenix Re Robert Barker's "AT&T Wireless: A bad call by the board" (BusinessWeek Investor, May 5): Yes, the AT&T Wireless (AWE) Board did modify the bonus plan last year, but for all the right reasons. As the head of the board's compensation committee told Barker, the wireless industry last year was expected to grow up to 50% faster than it actually did. As a result, all wireless companies had to revise their earnings and customer-growth targets. Our compensation committee decided on a midyear restart of the AT&T Wireless bonus plan to give our employees an incentive in the second half of the year to help the company grow. We met our revised 2002 targets and completed our next-generation nationwide network ahead of schedule and on budget. Mr. Barker also failed to mention that the total compensation of AT&T Wireless' chairman and CEO dropped by 30%.

Adele Ambrose

Executive Vice-President

Public Relations and

Investor Communications

AT&T Wireless

Redmond, Wash.

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