By continuously listening to and anticipating its market’s needs, Dell lives up to its founder’s vision—creating technology that’s all about enabling human potential
For the longest time—since its foundation in 1984—global technology provider Dell, Inc. has been known as a Personal Computer (PC) manufacturer. Recent years, however, have seen that the company isn’t just playing in the PC space anymore—it’s been in the solutions business in a couple of ways, too.
The less technologically inclined may be surprised to learn that Dell is now the “worldwide number one IT healthcare service provider.” According to Dell Philippines President Richard Teo, what this means is that Dell wants “to be able to help its customers keep up with the latest trends in technology. When Dell acquired Perot Systems, a major IT player in the healthcare industry,” Teo says the acquisition enabled Dell “to offer technology solutions that lets hospitals in the U.S. to do away with the burden of managing their data and security systems so it can focus more on its core competence—taking care of its patients.”
In the last 36 months alone, Dell acquired 15 companies to further cement its transformation into a commerce solution provider. These acquisitions revolve around technologies in cloud computing, security, data control and system management. “Today’s CIOs and CTOs are concerned about how their businesses need to introduce new lines of business and new lines of products, and their main worries would be how, in all this, would they be able to support their new businesses while maintaining existing applications and data centers. Dell has all of these solutions,” Teo shares.
In the last three years alone, Dell’s enterprise solutions already make up 35 percent of its revenues. This isn’t to say, however, that it intends to slowly let go of its PC business. “That still makes up 70 to 80 percent of our total revenues,” Teo clarifies. “But,” he asserts, “the profit margins for the enterprise service solutions is already more than 50 percent of Dell’s business. We’re moving very fast into the solutions space.”
With the demand for laptops, tablets and smartphones rapidly increasing, does this mean the desktop will eventually meet its demise? Teo doesn’t see this as the case. “There will be a need for both mobile computing and desktops,” he says. “There are limitations to tablets. If you’re surfing the web while sitting in a café, then it’s nice to use a tablet. But if you need to do a lot of entry, you’re more likely to use a laptop or a PC.”
Teo cites the country’s thriving BPO industry as an example: “If you think about the BPO industry, where they take calls from customers, they will be doing data entry on a desktop computer because no matter what, laptops will always come out a bit more costly than its desktop counterparts.”
Dell’s future is really in providing end-to-end solutions. “We’re not giving up our PC business because we believe that it’s important that we continue to innovate solutions at the end devices,” Teo assures. “As a solutions provider, we believe in giving end-to-end. At one end would be the end user/employee who needs to enter data into the system—laptop, PC, tablets, etc. Dell is in that space and will continue to play in that space. At the other end of solutions would be things like data centers, security, and cloud computing,” he shares.
Teo adds that three trends will have a marked impact on Dell’s market leadership: “Cloud computing is one big example of how customers are looking to lower their IT costs by looking for innovative ways to continue computing. That’s one trend that will affect our strategy and what we want to do. The second is data explosion—data is expected to grow 44 times from 2009 to 2016. Customers are concerned about how they are going to lower costs amidst all this data, because data created will always stay there. How do you manage data in the best way? And lastly, end devices. It won’t end with tablets—we’ll continue to see more new devices that allow customers to access data. Right now, there may be a slowdown in the global economy because the U.S. and Europe, but it’s a cycle so those will come back.”
Dell In The Philippines
Dell started in the Philippines in 2005, in a small office in Makati, and it has since quickly expanded its operations. Today, the company houses its 1,600-strong workforce in its office in Eastwood City, where a large percentage of the employees are in the Business Process Outsourcing business. “We have two categories in our BPO business—the captive and non-captive market,” informs Teo.
The first half of Dell’s business in the Philippines, the captive category, refers to Dell’s direct customers. When a customer in the U.S. or Europe buys a Dell computer for their business, and they need technical support, their calls get rerouted to the Philippines. “Our employees are actually serving Dell customers from the U.S., U.K. and Ireland,” Teo informs. “The other half—the non-captive BPO—involves enterprise and corporate solutions.”
More than being a cost competitive base for its BPO business, Teo shares that two reasons play behind Dell’s decision to outsource in the Philippines. “First is the Filipino’s proficiency in the English, as well as a cultural affinity to the Western world; and second is the country’s service culture. It’s a very unique combination—these factors made it the reason why Dell came to the Philippines, and it’s definitely proving to be a great solution for us,” he says.
Published February 25, 2013 in the Business Agenda section of Manila Bulletin