Dell to hire more global managers from India

Dell plans to leverage India more extensively than earlier by getting more management personnel here

Photo: Bloomberg

Mumbai: Dell Services, the information technology (IT) services unit of the $57 billion computer maker Dell Inc., is firming up plans to hire more senior executives from India to steer its global business in a bid to make low-cost countries an integral part of its growth strategy.

“Dell is a technology company, but is moving very aggressively to become an IT services company. India is essential part of this transformation,” said Suresh Vaswani, president of Dell Services, in an interview in Mumbai last week. “We will leverage India a lot more extensively than we have ever done before by getting a lot more management talent here, and will hire more in India, going forward.”

Outside of the US, India is the largest Dell base in terms of headcount with 27,000 people, and a majority of these are employed in the services business, according to Vaswani, who served previously as joint chief executive officer (CEO) of Wipro Ltd’s IT business. He joined Dell in December 2012.

Vaswani reports to the company’s chairman and CEO Michael Dell who has, since then, continued to hire more managers from India.

In June 2013, Dell named Alok Ohrie as president and managing director of its India unit. Ohrie led International Business Machines Corp.'s (IBM’s) systems and technology group in India from January 2010. Earlier, he was president of EMC Corp. for India and South Asia.

Three months later, Dell Services appointed Ashutosh Vaidya as vice-president and global head of its applications and business process outsourcing (BPO) business. And the following month, it appointed Anand Sankaran as president and global head of Dell Services’ infrastructure and cloud computing unit.

Both Vaidya and Sankaran held senior executive positions at Wipro, and now report to Vaswani.

“Anand and Ashutosh are all based out of India, and going forward there will be more global heads for services business based out of India. With the top management spanning across US and India, you can understand the relative importance of India for us,” said Vaswani.

Dell is no longer a listed company, having gone private on 29 October 2013. It has four business units, the largest being its end-user computing (mostly personal computing, or PC, business).

With this business consistently on the decline, both globally and locally, Dell is increasingly taking the route IBM and Hewlett-Packard Co. (HP) did a few years ago by investing its energies on expanding its services business.

Dell entered the services business in 2009, when it acquired Perot Systems (now Dell Services) for $3.9 billion, and now competes with the likes of IBM, HP, Accenture Plc and Indian companies like Tata Consultancy Services Ltd (TCS), Infosys Ltd and Wipro.

“If you look at Dell’s overall operations, we have leveraged India that has R&D (Research and development) capabilities across software and products, and we intend to do a lot more there. A lot of our back-office (work) gets done out of India, in the F&A (finance and accounting) space, we are here to service external customers but also Dell’s internal customers,” said Vaswani.

Dell has been investing to develop India as one of its key global R&D centres. In 2010, it acquired Force10 Networks (Dell has acquired 19 companies till date) and began to develop India as a Dell Networking R&D hub and global centre of excellence. Much of the R&D activity done out of India is in creating intellectual property (IP). There were 37 invention disclosures from India in 2013.

On 24 October, Dell also launched its Dell storage design centre in Bangalore—the sixth of its kind across the globe—and plans to ramp up operations. Dell also has a manufacturing facility in Sriperumbudur, near Chennai. The global analytics team that does market pricing and predictive analytics on customers is based out of India.

Dell, according to Vaswani, is also doing “substantial structural transformation in that business, which means that along with applications and BPO, we also do infrastructure and cloud computing. We have a cost structure and advantage in many other countries like Latin America, that provide the right resources, but India is where we see scale happen”.

With Perot’s acquisition, Dell, which has traditionally been strong in the US healthcare market, “is now investing in BFSI (banking, financial services and insurance)”, said Vaswani, adding, “Banking is a new sector, and has challenges like customer retention, complexities”.

The company’s extension of its partnership with ikaSystems (an alliance which began in August 2011), “coupled with the demand for public and private insurance exchanges, will enable Dell Services to expand its revenue growth in both the public sector and healthcare verticals globally”, Technology Business Research Inc. (TBR) analysts said in a September report.

Dell Services president Suresh Vaswani tells Mint about the company’s India growth strategy.

Dell Services faces competition from service providers like Accenture, HP, Xerox Corp. and Cognizant Technology Solutions Corp., which have all won deals to build healthcare benefit exchanges and offer similar BPO offerings.

Dell Services is also expanding its presence in the small and medium businesses market through its alliance with Corent Technology Inc., TBR analysts added. Here it faces direct competition from the likes of HP and IBM that “are pushing business with large-scale, enterprise clients”.

Application modernization is another “important focus area” for Dell Services, according to Vaswani. In March 2013, Dell Services completed a project with Singapore Exchange to help it improve the speed of a critical application by up to 100%, significantly lowering annual operating costs.

According to Alok Shende, founder director and principal analyst, Ascentius Consulting, Dell’s competitive position in the India IT services market has remained that of a laggard, primarily because Dell joined the market place “late in the game”.

“However, Dell’s software product portfolio has started gaining traction—that’s a niche that is likely to grow above market growth rates. On the other hand, owing to its premium position as a hardware player, Dell has gained intimate understanding of business life-cycle stage of Indian enterprise customers. This foothold and insights-led felicity is likely to assist Dell gain significant IT service cross-sell opportunities in the future,” he added.