Bangalore: The Indian arm of Texas-based computer maker Dell Inc., Dell India Pvt. Ltd, says its revenue increased by 50% last year to touch $600 million (Rs2,370 crore) by the end of October. Dell’s fiscal year runs from February to January. Last year, the company had said it would like to get revenues of $1 billion from India, but did not specify a time frame to achieve this.
Dell India appears to have achieved the 50% growth in revenue in spite of slipping a place to the fifth position in the Indian PC (personal computers) market. Dell has fallen behind Hewlett-Packard India Sales Pvt. Ltd, HCL Infosystems Ltd, Lenovo India Pvt. Ltd, and Acer India Pvt. Ltd in the overall PC market (desktops and notebooks) in 2007, but expects to do well in the small and medium business (SMB), banking and financial services and government sector, through its famed direct selling model unlike its competitors.
“Overall, at 50%, we are growing faster in India than most other competitors. Now our strategy is to penetrate the SMB and government segment which is largely untapped where we may have a mere 2% market penetration. We are moving from being a product- driven company to a solution-based company,” says Paul-Henri Ferrand, president, Apacs, Dell Asia Pte Ltd. Dell recently got empanelled with the Directorate General of Supplies and Disposals, enabling it to be one of the approved IT vendors to compete for government business.
Dell has traditionally focused on the large corporate segment. But, last May, it turned its attention on other segments such as government, SMB and consumer. According to Dell, there are 1.2 million SMBs in the country that are buying IT. “Our forecast is that there will be another million SMBs who will be buying IT for the first time,” adds Ferrand.
Diptarup Chakraborti, principal analyst at Gartner India, attributes Dell’s success to its direct selling model and local manufacturing base in Chennai.
“It has started getting good wins in the government sector after adding AMD-based products which are priced low. Dell has also added more people while increasing investments in marketing and branding, targeting smaller cities with direct selling,” says Chakraborti.
Dell customers include the likes of Indian Oil Corp. Ltd to which it sold servers; Indian Institute of Chemical Technology , where it has set up a large high performance computing cluster and Railways; and Electronics Corp. of Tamil Nadu Ltd to which it has hawked PCs, notebooks, servers and storage equipment.
While other players such as HP, HCL and Acer have taken the channel route, Dell continues to sell directly.