Jim Vanderslice Vice Chairman

1. Jim VandersliceVice Chairman Boston College November 6, 2002

2. Pioneer and leader in direct business Leader in e-business Fortune 50 Company -- $32+ Billion in Global Revenue Global Company > Operating in 190 Countries World’s #2 Computer Systems Company (temporarily) #1 in Customer Satisfaction Approximately 38,000 Employees Worldwide Market Capitalization of $70 Billion Dell: The Facts

3. Foundation in Direct Model:Fundamentally Advantaged Suppliers DELL Customers Direct Model Competitor Model Suppliers OEM Customers Outsourcing Channel Model advantages unique to Dell & take significant time/cost to replicate • Ownership of value chain/information • Structural costs • OPEX • Manufacturing • Warranty • Customer Experience

4. Executing the Direct Model:Q2FY03 Performance LIQUIDITY $869 million in cash flow from operations 4 days of inventory* $8.6 billion in cash & investments* CCC -37 days* GROWTH Dell units +18%, market down -5% Units #2 WW, #1 US Favorable mix shift to enterprise • PROFITABILITY • Gross margins = 17.9% • Operating Margin = 8.0% • OPEX percent of revenue = 9.9%* • Delivered $0.19 EPS and $8.5 billion in revenues • Repurchased 14 million shares of stock • Shipped record number of units during quarter * Value ties or sets company record

5. Fundamental #1 Take Risks

6. Dell’s Enterprise Success #1 in Servers (U.S.) #2 in Servers (Worldwide) #1 in Workstations (Worldwide) Storage revenues grew 72 percent year-over-year in Q2 Dell EMC and PowerConnect Ahead of Expectations

7. Continue to gain share in all products & segments: #1 in WW Corporate #1 in WW SMB #1 in WW Public #3 in WW Consumer #1 in WW Desktops #1 in WW Notebooks #2 in WW Servers Continue to grow profitable $3.5 billion software & peripherals business Leveraging our Core Business Market Share -- WW Corporate 20% 16% 12% 8% 4% 0% 1995 1997 1999 2001 Source: IDC

8. Fundamental #2 Efficiency Wins

9. Executing the Direct Model:Significant Cost Advantage Operating Expense Over Time (% sales) • Competitor OPEX greater than 2x Dell • Dell focused on maintaining advantage • Translated cost adv. into profitable share gains • WW share incr. from 9.7% in Q1’00 to 15% in Q2’02 • 55% increase in 10 quarters HPQ Source: Company Financial Statements

10. FY03 Initiatives – Warranty Cost Reduction A key focus area for the company is to reduce cost by $1B in FY03. Warranty cost reduction is a major component of this initiative. At the end of Q2 FY03, Dell’s warranty cost reduction projection for FY03 consisted of the following: • Service Labor rates • Product Quality • Improvements • Global Site Optimization • Inventory management

11. Fundamental #3 Speed is Life

12. Historical Cash Conversion Cycle (Q1 FY99 – Q4 FY02) Hewlett Packard Sun Compaq IBM Dell

13. Fundamental #4 Grow or Die

14. Dell Gaining Share in All Regions Dell CY ‘02 Q2 Share Dell CY ‘01 Q2 Share Dell Premium 25% 9% 11% 23% 20% Dell Y/Y Growth 23% 5% 13% 10% 18% Mkt. Position 1 2 4 4 2

15. Selectively identify markets Extending the Direct Model: Method for Extension Direct Model extends into new markets, we: • Fit our economics – large, profitable, standardizing • Leverage our capabilities Enter with low investment • Partnership with existing player • Brand 3rd party products Layer in new capabilities/offerings over time • Take ownership of the value chain • Improve margins

16. Opportunities for Growth:External Storage Storage HW Addressable Market Addressable market doubles with EMC Alliance SAN NAS DAS DELL PowerVault DELL PowerVault 2 DELL EMC and • Standardizing, adjacent to core, leverage existing channel • Addressable market now ~$30 billion • EMC Partnership • Continues to progress; revenues up 65% Q/Q • Introduction of the co-branded CX600

17. Fundamental #5 Exceed Expectations

18. 90 86 86 Dell Compaq 84 84 83 Hewlett Packard 85 82 IBM 82 TBR Category Ranking 80 81 79 79 Gateway 81 78 80 Toshiba 75 70 Source: TBR Customer Satisfaction Study, Q4 01 Desktops Servers Notebooks Category Leader In: 10 of 13 Categories 10 of 15 Categories 12 of 16 Categories Out-of-Box Quality Replacement Parts Availability Price/Performance Total Cost of Ownership Volume Discounts Overall Satisfaction On-Time, Reliable Delivery Overall HW Performance Price/Performance Total Cost of Ownership Volume Discounts Overall Satisfaction On-Time, Reliable Delivery Product Availability Time to Repair Price/Performance Total Cost of Ownership Volume Discounts Significant Lead In: The Customer Experience

19. Fundamental #6 Be Relevant to Customers

20. 1994 $4B Large Customers Small Customers (Business and Consumer) Large Companies Midsize Companies Government Small Customers 1996 $8B Education & Healthcare 1998 $18B Global Enterprise Accounts Large Companies Midsize Companies K-12 Healthcare Higher Ed. Small Companies Consumers Civilian Dept. of Defense & Intelligence State & Local 2001 $32B

21. Companies that Work in Isolation Continue to Overspend Server R&D as Percent of Revenues 19% Sun R&D Inefficiency: 8% 3rd Party R&D 11% 3rd Party R&D In-house R&D In-house R&D Source: Dell, Company Financials

22. Fundamental #7 Listen

23. Linux Customers Told Us …

24. Differentiated Performance 30% 20 10 0 $5B Rev -10 -40 -30 -20 -10 0 10 20% • Dell performance among upper echelon of enterprise companies Operating Income % RevenueGrowth Y/Y - Q2'02

25. Fundamental #8 Build Strong Relationships

27. Fundamental #9 Believe in Yourself

28. Performing in a Weak Market 25% 15% Dell Market Share 0% 12% Unit Growth Market Share WW Market Unit Growth -25% 9% Q4 FY00 Q4 FY01 Q4 FY02 Dell Growth Premium 18% 16% 11% 7% 2% 35% 23% 23% 21%

29. Customers Prefer Dell:Market Share Up +158% Worldwide Unit Market Share All Products – Last 5 Years HPQ down -23% WW Market Share DELL up +158% IBM down -19% Source: IDC

30. Questions& Answers