HYDERABAD: Dell International Services India Pvt Ltd (Dell India), part of the $56 billion global computers giant Dell Inc, plans to focus on BFSI (banking, financial services and insurance) and SMB (small and medium sized businesses) sectors to cross the coveted $1 billion mark.
Having crossed $500 million mark, Dell India expects to grow at around 70% in the next few years, taking advantage of its domestic manufacturing facility at Chennai set to take off in 2-3 months, its Managing Director, Romi Malhotra, said. He was here to inaugurate the second Dell Computer Centre with 20 desktop computers that imparts computer education to under-served students with Hope Foundation.
“We have already emerged leader in the corporate sales segment and the next focus would be on BFSI and SMB sectors. We have identified BFSI and SMB sectors as growth drivers and have set up an exclusive team for this. We are well on course to reach $1 billion mark,” he said, while declining to give any timeframe to achieve this robust target.
A recent study by AMI Partners pointed out that the SMBs in India are planning to spend more than $8 billion in 2007 to beef up their IT infrastructure, representing a growth of 24% over last year.
The financial institutions and banks in India are estimated to invest over $2 billion during current calendar year to upgrade their IT infrastructure, representing an increase of 18% over last year’s spend of $1.7 billion, according to a recently-released Skoch Consultancy report. The IT spends by BFSI sector in India is expected to touch around $3.5 billion by 2010, the report said.
The number of computers in India has grown rapidly in the last three years to reach 22 million in 2006 from 9.5 million in 2003.
Dell India’s Chennai manufacturing facility for desktop computers, set up at a cost of $30 million with a production capacity of 400,000 units per annum, is set to go on stream in the next 2-3 months. “Following this, we expect to market our desktops at competitive prices since we save on the air freight charges and import duties that we are paying for importing products from our Malaysian facility. We will pass on the cost advantage benefits to the customers in India,” Romi Malhotra said.
Dell, known for its direct online sales business, has recently tied-up with Wal-Mart to sell its PCs through retail stores across the US market. The company will work on similar model in India as well, apart from other sales channels. Dell India, which currently employs 14,000 professionals across four centres in the country, plans to reach a size of 20,000 in the next couple of years, Malhotra said.
Harmendra Gandhi, an analyst with the Mumbai-based Bric Securities Ltd, said, ”The IT spends in the Indian SMB segment have been recording phenomenal rise of late with more and more players on their way to adopt the standards prescribed by their global customers. Dell, which is predominantly known for its direct online sales model, may have to evolve different sales channels to penetrate into the Indian SMB market. Further, the established players in the SMB segment would give Dell a tough time since other dominant players have a wider array of deliverables which Dell does not have.”