Dell-EMC combination has created over a combined entity that in India alone is over $3 billion in revenue. The acquisition, which took a long time to complete, is now helping Dell India to grow faster than ever and enter new markets with a larger portfolio of products. Alok Ohrie, President and MD, India Commercial, Dell EMC, talked to BusinessLine to discuss how the company is now expanding its reach to 45 small towns to expand its business further. Edited excerpts :
How has the transition towards Dell-EMC consolidation impacted business in India?
We have had 17 consecutive quarters of growth. Last year, calendar 2016 our market share on the clients’ business in the non-consumer side has grown 494 basis points. If you were to take the total market including consumer, it is 221 basis points.
I am hopeful with the kind of importance that government is giving to digitisation per se and driving the agenda of Digital India under that umbrella they have smart cities, Make in India, Start-up India, Skill India, you will agree with me that all of that is going to fuel the growth for the IT industry. Are we prepared for that, that’s a question that you can ask. Are we prepared for that, the answer is yes. And why do I say that because we are investing specifically in resources that are going out to the market and engaging with the key stakeholders.
A lot of PC market growth in India has been driven by government projects. Now that elections are over in most of the States, how do you expect the sales to get impacted?
I think most of the governments are very serious about it, we are seeing some early work happening in RFP…So, RFPs are getting built and some of the States have. Early engagement shows that there is significantly large volume of laptop purchases that will take place this year on account of education buy. One that is already out is from Tamil Nadu for 550,000 units. There are few smaller ones in the range of 50-100,000 units from a couple of other States that are currently being evaluated and assessed. The bids have been submitted. There are some large ones that are also expected.
Michael Dell recently spoke about PC-as-a-service. What kind of opportunity do you see for that in India?
I think there is a great value for that in India, especially for a product. So, today most of the businesses look at this part of their purchase as a depreciation benefit. Three years, 5 years depending on which company you talk to, they will have their own depreciation cycles. There is going to be a bigger compelling reason wherein the refresh cycles of these products will go down dramatically. And as I said it is to, it is going to do with the features. Imagine if virtual reality and augmented reality features start getting included into the desktops and PCs, right. When it becomes as a service, then you can keep asking for a refresh at a shorter period of time.
It’s in the process of getting defined for India as you could imagine there is a financing angle to this. So, we are working with back lining it with couple of financing companies. We have a financial arm. We call it Dell Financial Services, DFS.
Dell-EMC combined you are much larger than $3 billion in India now. Do you see an opportunity?
We are very bullish about the Indian market. We are very encouraged with the response that we have got so far. We are very sure that we will, when we have this conversation maybe a year from now and would have done the entire year, we will again be very proud of what we have achieved. Our first quarter has just got over. I can tell you it is a very strong quarter, very strong quarter, great momentum. No heart beat miss.
Does the competition splitting into different companies kind of help you in some way?
I will say that the competition is distracted. I won’t go and make a comment about a specific competition here. I will say overall competition is distracted. And you see that across all of the competition friends that we have in the market at different kind of challenges, different kind issues that they are grappling with.
The best thing that could have happened to Dell is Michael taking a decision to take the company private, 3 years back. So, October, 2013, when he took the company private, he set the stage for the company to be on a very, very different flight path. A flight path that has helped the company deliver much, much more than the market.
Four years back, client business in India was 10.8 per cent. Last year, we ended the client business and when I say client business, I mean the non-consumer business. We ended the non-consumer business at 26.5 per cent. Four years back our server by revenue market share was in the range of 16-17 percent. Last year, we had ended it at 29 per cent.
So, you know the underlying message that I am trying to leave you with is that the company has thrived in a private equity construct. I think the private people construct have really, really helped the company. Decisions are faster, much quicker and we are investing in the growth areas.
What do you see as the big opportunity areas for Dell in India?
So, on the consumer business side, we will continue to expand our reach in the market. We are already present in 600 towns. We will continue to see how we can improve our availability of our products there.
On the non-consumer front, we are investing to play big in the government space, government and public sector. We have invested big time on BFSI — Banking Finance Security Insurance. And we are investing big what we internally call as Geo expansion, Geography expansion. Geography expansion for us means the next set of 45 cities that we are going behind. These are typically tier-2 and tier-3 cities.
We have a great partner network that has been built and the combined partner network is close to 3,000 partners registered with us. So, that should help us.