Dell Technologies is one of the largest technology brands in India, with over $3 billion of revenues being generated from the market. With the growing importance of India, the company now has a special focus on India with a country head who will now lead not just Dell Technologies business but also recently merged VMWare business. In a conversation with BusinessLine, Alok Ohrie, President and Managing Director, Dell Technologies, India talked about how the new structure is helping the company and the demanding challenge that they are facing in the consumer segment.
How is the new integrated structure impacting Dell Technologies’ India growth story?
When we merged the two large organisation, which is Dell and VMWare, it was clear that we had to focus on customers and not bring any disruption as we engaged with them with a broader portfolio.
We created an enterprise segment and a commercial segment. We’ve seen amazing benefits in running the business in that structure. It was the beginning of May that it was decided that at an APJ level there will be an integration of two segments under one leader. There is, however, no other change. The new structure brings in a lot more clarity with regards to where the additional opportunity of growth lies, and it helps us to invest in those areas in a much broader way. It also simplifies some of the other engagement related activities that are there in the market.
Do you expect a boost in the business post the reduction in the corporate tax base in India?
I think it is a bold step. Base tax rate coming down to 22 per cent will result in Rs 1.45 lakh of fiscal benefit that’ll flow back into the market in terms of economic activity. For all companies, the need of the hour is to transform their business digitally and that’s something everyone has realized. Most of the companies will invest back into the business all the savings that they see because of the tax cut. When the investments are talked about, it is my expectations that IT investments will be a high priority. I feel in India, a lot of that money will flow into IT product deployment.
Taxation has also been lowered in manufacturing. Do you see yourself expanding your manufacturing base in India?
Currrently, utilisation levels of manufacturing plants for anyone with PC manufacturing in India is still not 100 per cent. The industry is waiting for demand to get to a point where it requires additional production lines or investments. I wouldn’t link cut in corporate tax to a boost in manufacturing in India. Demand is an issue. Demand for PCs and notebooks in India is about 12 million units a year for the entire industry. That is 1/5th of China which is at about 65 million units. We are hoping that as customers deploy more solutions, get into hardcore digital transformation; there’ll be a more substantial demand for PCs and notebooks. But currently, the demand is an issue.
Has government interventions and focus on digitisation not helped in demand growth?
The demand is going up. The growth rate has been 7-8 per cent CAGR over last 4-5 years, but that’s not enough but that’s not enough to require any expansion in production capacity.
What is your roadmap for growth in India?
Not all customers of ours have all our products. So there’s an opportunity to cross-sell or up-sell within our existing customer base. We are focussing on expanding our portfolio with them. That’s one approach we’ve taken.
Then we are going to markets where we haven’t been present in before. We are going to tier 3, tier 4 markets, and even expanding within tier 1 markets and covering them better. There the focus is to improve our coverage of the market. Our experience on both is extremely pleasant that’s why our growth levels are strong.
We see many product lines converging and growth coming in from tier 4 and tier 5 cities. That put together, makes us bullish about the Indian market. On the consumer side business, we have reached 800 stores. Indian consumers are becoming a lot more tech-savvy and comfortable with online shopping, and that’s seen a significat uptake in last 3-4 years. For B2B business, we’ve reached 84 cities now.
Source: The Hindu