By now we all should have been browned, blackened, and finally burned to a carbon slice. We'd be toast, they told us, if we failed to adopt one of those disruptive business models making the rounds. What CEO didn't tremble at the thought of being Amazoned? Or Pricelined? Or Delled? In the last case, they still do. Dell's is one of the few boom-time business models that's not only survived the bust but looks better for it. In one of the worst PC markets in history, Dell gained enough share lastyear (from 12 to 15 percent) to become the number-one company in the business. At a time when every one of its major competitors is losing money in PCs, Dell is making it, keeping margins flat while waging a price war that's destroying its rivals. And the company's share price held up in the bleakest slump the industry has ever seen.

Blame Dell for pushing Compaq and Hewlett-Packard into each other's arms. And for the woes at Gateway, which couldn't make money at those prices. And Dell is responsible for IBM's decision to leave the consumer PC business in 2000: "Price wars in a commodity business are really dumb," grumbled IBM's then-chair, Lou Gerstner. Only if you can't consistently make money, Michael Dell said on the way to the bank. PCs may be a commodity, but what Dell really sells is the network economics of connecting customers to suppliers. And it's proving more radical and hard to copy than once thought.

The simpler virtues of this model are well known. Dell's combination of direct-to-consumer sales and just-in-time manufacturing means practically no inventory – and unparalleled success in matching product offerings to consumer demand. Over the past five years, Dell has expanded this model beyond PCs, gaining on competitors in servers, storage, even communications equipment – all categories once thought, wrongly, to be immune from the brutal reductionism Dell applied to the vanilla PC.

| Photo by Raymond Meeks/Virtú "Things just don't happen as fast as people predict," says PC pacesetter Dell. "You can see them struggling with the change."

But the PC wipeout has also revealed another side to Dell. The direct model it pioneered isn't just the most efficient way to make personal computers; it is also a particularly ruthless form of corporate Darwinism. Dell isn't just a PC industry super-predator – it also kills off its own straggling product lines with savage speed. If Michael Dell's essential insight was that you can't second-guess consumer demand, his recent corollary is that those same market forces should dictate corporate direction, too.

Almost uniquely among high tech firms, Dell forbids internal subsidies. No loss-leaders, no prolonged grace periods, no long bets on trends yet to emerge. Michael Dell is too smart to think he's smart enough to predict the future; he assumes that the world of IT increasingly resembles a global financial market, where the aggregate knowledge of all participants exceeds that of any particular player. Let others dream up products never before imagined and risk their futures on that vision. Dell is content to ask consumers what they want and then sell it to them.

Likewise, Dell spends little on R&D and doesn't even pretend to be a technology innovator. Instead the company uses its clout to get early access to its partners' most innovative products and components, then employs its exquisitely sensitive market-testing machine – a combination of its Web site and direct-to-consumer sales – to dictate what comes next. If new products sell, they are built to order and shipped. If they don't sell, they may never be made at all. It's perfect business theory, applied perfectly to corporate planning. It's Dell's real innovation, and it has been hardened by fire.

Yet despite fanfare over the Dell model, there have been few followers. Michael Dell long ago came to be seen as a prophet of a more efficient way of doing business – an Internet-enabled Henry Ford figure for the new economy, with the Round Rock plant as his River Rouge. And just as the implications of Ford's assembly line stretched far beyond the auto industry, the impact of Dell's model extends beyond PC makers. For years, executives from all walks of industry have made pilgrimages to Austin, hoping to bring back a formula they could apply to their own companies. "If this works for computers, it's going to work for automobiles, furniture, carpets, appliances, anything," predicted Larry Bossidy, CEO of now-defunct AlliedSignal, to Fortune in 1999. By then, Dell was hosting a DirectConnect Conference for more than a thousand eager acolytes; one consultant advised companies to "be the Deller rather than the Dellee of your industry."

Today, however, nobody outside of the computer business has Delled or been Delled just yet. The obvious candidates, such as Cisco or Sun, depend too much on their reseller and consultant networks to go fully direct – and innovate too much to abandon forecasting entirely. In PCs, only Gateway has come close, although it could not make the model work well enough to avoid the need for retail stores that pulled in customers at the cost of creating dreaded inventory. Compaq and HP talked a lot about doing it Dell's way but couldn't bear the pain of burning their retail channels. The one clear lesson from Dell is that the system only works in pure form. Try to straddle the two worlds – direct as well as retail sales – and you get the overheads of both without the clarity of either.

A revolution of one is no revolution at all. So what is Dell? A one-off phenomenon, lucky enough to exploit a combination of factors that turn out to be unique to the PC industry? Or a truly ascendant business model so disruptive that it can be adopted only through wrenching change and not the piecemeal attempts tried by others so far? Michael Dell is confident of the answer, but he knows it will take a while to play out. "These things just don't happen as fast as a lot of people predict," says Dell. "We've had a number of customers who've come time and time again, and you could see them struggling with the change."

There have been small steps. Ford, Honda, and other leading automakers teamed up on a built-to-order project dubbed 3DayCar but ran into communications problems with suppliers. Maytag had better luck letting consumers order on the Web but pay a local retailer. Much as GM launched Saturn as a separate firm to learn how to build and sell cars nontraditionally, other established companies will set up subsidiaries and spin-offs to manage migrations to direct sales. The Dellification of a Ford, or a Siemens or a Toshiba, is only a gutsy CEO away.

What's the only American-born post-bubble business model that rivals Dell's? Don't look to Silicon Valley or Route 128 – it's in Arkansas. Every bit as integrated and influential with its suppliers as Dell is, Wal-Mart is an even tougher negotiator. The world's most profitable retailer represents the ultimate channel; Dell is the antichannel.

For companies more dependent on channels than on customers, Wal-Mart's future is the future. For those that care more about customers, Dell looks like destiny. For would-be Dells, giving customers easy tools for collaborative design, configuration, and simulation is the most obvious first step. Treating suppliers like full and equal partners is an even more culturally demanding next step.

The challenge is the channel. It's time to choose or lose.

The Dellification of a Ford, or a Siemens or a Toshiba, is only a gutsy CEO away.

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