Dell, the $62-billion technology giant, is making concerted efforts to deepen its relation with the small and medium business (SMB) segment in India given that the sector is making purchases of IT products and services despite a challenging economic environment. President and managing director of Dell India Sameer Garde, in an interview with PP Thimmaya, says the company has been recording a growth rate in excess of 25% from SMB segment offering them long-term opportunities. Excerpts:
What has been Dell?s strategy for SMB segment?
In India, 40% of IT market belongs to SMBs or what we call growth market. Our definition is that anybody with 100-5,000 employees falls under this category. There are about 35,000-37,000 mid-market customers who reside in the top 25 cities of the country, but the question is how do we reach out to them. Of these, around 85% of them are in the top 8 cities with the rest in next 17 towns. Today, at Dell we have the database of about 27,000 such customers and we know exactly whom we have to reach out in this growth segment. The first part of our strategy was to expand our coverage and we have put resources which will directly deal with these customers and channel partners. We are also finding that the discretionary spending in this segment is continuing to grow despite the credit crunch. Secondly, we are providing solutions which are easy to deploy though low in value. We have put in a dedicated team for 11 cities as earlier nobody would be much bothered about places like Nashik, Baroda, Kochi or Coimbatore as it was normally left to the channel partners.
What are the size of deals from the SMB segment?
The average ticket size is around R25-45 lakh for core IT products. But what we have realised is that a lot of this spending is very discretionary in nature, so it is important for us. It is also the case of catching them young, as many of them have the potentials of becoming large enterprises in the future. However, I must add that in the large project-based bids, we are witnessing a significant slowdown as customers are postponing their decisions.
Does Dell have the products to cater to this segment?
We have got the full array of products ranging from hardware, software and services. The mid-market typically looks for a lot of reforms in its products and services. This segment is also very aggressively looking at newer technology areas like virtualisation, storage & consolidation, which was generally understood to be the domain of the large enterprises. Even in the area of cloud technologies, many customers are looking at having their non-critical applications put up on public cloud. We also have a large network of engineers who can provide a 24×7 support for the mid-market customers.
Added to this, we also provide services to enterprises that does not necessarily have Dell products for services like managing their data centres. At the end of it, we also constantly monitor the kind of support we are providing to this mid-market segment in terms of quality, service delivery etc.
What growth rates is Dell recording from the mid-market segment?
It has been a phenomenally healthy growth rate and it has been in upwards of 25-30% on a year-on-year basis. One could say that, it is double the growth of our regular business. Today, in Dell India, there has been a sea change in the portfolio of our business. Around 60% of our revenues come from the PC business, but 60% of our profits come from non-PC business.
