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India becomes fastest-growing, third-largest market for Dell

The Economic Times:  December 19, 2014

Bengaluru: Michael Dell's decision to take Dell private last year has started showing signs of change for the company in India, where it has grown to become a $2-billion entity. Growing at close to 50% in the last one year, India has now become Dell's third largest market in terms of revenue after the US and China.

"Our pace of growth makes India the fastest growing market for Dell globally and India has now emerged as the third largest market for Dell, next only to the US and China," Alok Ohrie, managing director at Dell India, told ET. "India is also the largest workforce for Dell outside of the US and representative of every single business of Dell.

The company has been rapidly growing in most of the segments it is present in. As per market research firm IDC's latest India PC market report, Dell has inched closer to the top position in the third quarter of 2014 with 22% market share, trailing HP by 3.5% in terms of total number of units.

For the same period last year, the company was the third largest player with only 11.8% marketshare. "In the server business, we have grown at an even faster rate," Ohrie said.

The growth has been driven by the company's aggressive expansion in smaller towns and cities, using partners to sell its products instead of selling everything directly to the customer, and due to IBM's exit from the entry-level server business.

Dell India has completely revamped its go-to-market strategy in India post privatisation—trying to offer integrated solutions to enterprises as it attempts to fill in a void created by IBM's exit from commoditised x86 server business.

"We are in a very unique position because now we are the only company in the IT industry with truly end-to-end solutions, starting from tablets to cloud computing and everything in between. That is our biggest strength in the market," Ohrie said.

Dell went private in November last year after CEO and founder Michael Dell acquired the company with the help of private equity firm Silver Lake Partners for $24.9 billion. In an interview with ET in January, Dell said "Privatisation just gives us an enormous amount of freedom to execute in the way we believe is the right way and that is for me incredibly energising.

With its new aggressive go-to-market strategy, Dell has expanded its presence from 15 top cities to 45 cities in the country. The company is also now using distributors to sell its PCs, notebooks and entry-level servers and storage. This has given the company access to additional 1,000 towns in India.

"In the last 6-12 months, Dell has been moving up the value chain, targeting solutions like virtualisation, cloud and mobility to large enterprises in India," said Naveen Mishra, research director at Gartner. "They are trying to have more feet on the ground, which has helped them win some large deals."

Not only did the renewed strategy help the company expand its presence in the country, but has also enabled them to sell larger IT solutions to companies instead of selling just servers and storage—thus improving profitability as well.

"The model has expanded our IT solutions capability by the addition of new partners with different skills that we did not have. We can now offer everything together as an end-to-end solution," Ohrie said.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

x IBEF : India Brand Equity Foundation