Dell on track to hit the $3 billion revenue mark in India: CFO Thomas Sweet
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Mumbai: Dell Technologies, the company that was formed when Dell Inc. acquired EMC Corp. for $67 billion, remains bullish on its “long-term” growth prospects in India, which is the company’s third-largest market.
“I think we are on track to hit the $3 billion revenue mark in this country in a couple of years,” Thomas Sweet, executive vice-president and chief financial officer (CFO), Dell Inc., said in an interview last week.
Explaining why he is bullish on the Indian market, Sweet reasoned that the country now had “a government that is pro-growth, pro-development, and which is also pro-technology in helping to enable that growth and the government’s mission”. Further, he claimed that the Dell-EMC combine in India is growing faster than the domestic IT market growth.
According to Nasscom’s Strategic Review 2017 report, in FY2017, India’s domestic IT-BPM (information technology-business process management) market is likely to grow 8.5% year on year to reach $38 billion (excluding e-commerce).
To accelerate the pace of growth globally, Dell rolled out a distribution, or the so-called channel strategy in February. According to Sweet, half of the company’s revenue is routed through its distributors and his company hopes to increase their output with the recent reorganization it initiated to bring together the distribution partners of the erstwhile Dell and EMC companies.
What the company did two months back, according to Sweet, was to merge the EMC and Dell sales forces (which existed as separate entities before the merger) into two units. One is an enterprise sales unit that would now focus on the top 3,000 customers, and the second is a commercial sales organization that will focus on an estimated 500,000 clients. Sweet said he is “pretty pleased” with how the combined sales units have shaped up so far.
The company also plans to sharpen its focus on its digital transformation push. Dell Technologies breaks up digital transformation into three parts, according to Sweet: IT transformation-how IT can support what the business needs; security transformation-how a company can tackle multiple threats; and workforce transformation-how an organization makes its employees more productive in a mobile environment.
In the past couple of years, most large technology solution providers such as Hewlett Packard Enterprise Co. (HPE), International Business Machines Corp. (IBM), Accenture Plc., Oracle Corp., Cisco Systems Inc., Microsoft Corp. and others have been competing fiercely for the increasingly lucrative digital transformation pie. According to research firm International Data Corp. (IDC) forecasts, global spending on digital transformation technologies is projected to be more than $1.2 trillion in 2017—an increase of 17.8% over 2016.
“There is clearly a greater focus among our customers on digital, but most of them are currently focused on IT transformation,” said Sweet. According to him, companies are looking to modernize their IT infrastructure to support cloud-native applications. In cloud computing, companies can consume IT services and only pay for the applications or infrastructure they use rather than buy the equipment upfront, thus reducing capital expenditure (capex).
One change in the way technology adoption occurs in companies, according to Sweet, is the growing involvement of top management, especially when it comes to digital. “We are seeing more C-suite executives, particularly the chief executive officers (CEOs), chief operating officers (COOs) and CFOs, participating in the conversation on digital as, increasingly, they are seeking business solutions and business model evolution,” he said. The focus for CFOs, he said, continues to be on return on investment, even as most of them are also ready to bet on emerging technologies that are still not mature in order to future-proof their organizations.
Sanchit Vir Gogia, chief analyst of Greyhound Research, said that while the Dell-EMC combine has done a good job of “integrating the channel network” of both the organizations, managing the reskilling of the partners and introducing customised solutions tailored for specific industry segments may require an intensive focus, especially in the short term. “If they can manage this aspect well, they can have an edge in the digital transformation infrastructure market, where companies such as HPE and Lenovo have been showing renewed aggression of late,” he concluded.