Don’t see significant impact of Dell-EMC merger on jobs in India: Tom Sweet
Senior VP and CFO of Dell Inc. speaks of Dell's prospects in India, his perspective on the EMC acquisition and challenges that both firms face
Mumbai: Tom Sweet, who was appointed senior vice-president and chief financial officer of Dell Inc. in early 2014, has been visiting India at least twice a year for the last 10 years. His current visit follows Dell’s $67 billion buyout of EMC Corp. in October last year. In an interview, he spoke about Dell’s prospects in India, his perspective on the EMC acquisition and the challenges that both companies face going forward. Edited excerpts:
Last July, you said Dell is aiming to cross $3 billion revenue in India in a year or two. Do you expect to meet the target? What’s driving growth here?
Yeah, I think, we continue to make good progress against that target with teams clearly working very hard. You think about our data centre business, our storage business and software capabilities that we are continuing to advance. Couple that with the growth of the Indian economy (and the fact that) there is a lot of infrastructure (like data centres) being built out as companies continue to build their footprint and serve the population of India.
Other than our PC (personal computer), server and data centre businesses, we are partnering with a number of companies in areas like digitization and Digital India, which is all about getting people connected both from a device and from a network perspective. It is a great opportunity for us, and around smart cities, which again is around security and the digitization of some of the services there.
We have a very large R&D (research and development) footprint in India. (India is the only country, outside the US, where Dell has networking, storage and server R&D). We also have a strong software presence here. There is also a lot of core Dell IT capability here, which also creates and helps on the innovation side. Our employee count is over 27,000 people in India and growing.
Having been 16 years with Dell, you were part of the process when the company went private in October 2013. What strategy changes have been made since then?
That sort of goes back to our decision in the 2006-07 time frame to accelerate the growth of our other capabilities, besides our PC and server businesses. Clearly, we’ve seen a growth in our data centre capabilities, our solution capabilities. We’ve added networking, we’ve built on our storage business, we’ve added software, and we’ve added services. We have been able to architecturally put together blueprints and other sorts of technical solution capabilities that our customers are gravitating towards.
We’ve also moved from primarily a direct business to building on our channel business. This has allowed us a longer and deeper reach into our customer base, a better coverage model across India and across the globe to be fair. The storage and networking capability we’ve built has allowed us to have a richer conversation with our customers. This coupled nicely with types of technology shifts in the cloud and in how computing is being used.
Now we are moving to other areas like our Internet of Things initiative and around helping our customers embrace the digitization stream.
Analysts say you spent too much money on buying a company like EMC instead of opting for a digital-age company. They also say the move can stunt R&D at EMC and dim the cloud prospects of VMware (an EMC unit)?
We obviously don’t think we paid too much and we obviously think the combination of EMC and VMware is a great business and going to continue to be strong. So, I won’t get into a point-by-point conversation on that. We thought about the value proposition and the pieces around the EMC transaction. It is all around building the core building blocks of the data centre or the infrastructure business. It also gives me what is called the third platform of computing, which is around cloud, virtualization and the EMC capabilities. Analysts typically agree that the core of the data centre and infrastructure businesses is going to be very good over the next 10-15 years.
Integration will remain one of the biggest challenges given that both Dell and EMC are huge and complex entities.
You have already highlighted the fact that it is two very large companies, so we think this integration is a multi-year one. We are first and foremost focused on making sure that we continue to provide our customers with a great experience. The challenges are around ensuring that we can sell our entire suite of products to our combined customer set, and that we behave and act as one company. We also must ensure that our employees and team members understand the values and strategic direction of the new company. Obviously, this entails a lot of work to do on processes, IT systems, legal entity structure, etc. All of these are what we are working on, and we’ve got teams for the task.
Mergers are typically followed by lay-offs. EMC has already announced job cuts globally.
Those were cuts they (EMC) had already decided upon—a series of cost actions that they were going to do as part of repositioning for their business even before the Dell-EMC transaction was announced. Having said that, when you put these two large companies together, there are certain areas where we are going to have overlaps. But we have communicated that we are going to be very thoughtful and disciplined about it.
I don’t see a significant impact in India, given some of the capabilities we have here in terms of our large engineering footprint. We at Dell have a very strong global business office that does a lot of our global business services. So the thing we tell our employees is to continue to execute your business and do your job well and control what you can control, and we will be transparent and upfront about if and when there are any sort of job-shaping activities. But it’s not significant in the scheme of things.
Dell is reported to have put Perot on the block. Why?
Well, I am not going to really comment on anything in that area. I am here to talk about Dell’s growth, so I’ll just leave that; we’ll see how that goes.
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