Dell diversifies out of PC sector, introduces new business services

BEIJING - Dell Inc, the world's third-largest PC maker by market share, introduced new commercial network servers in China and said it is no longer a personal-computer company.

"We're not a PC company," said Michael Dell, Dell founder and chief executive, on Tuesday at an event promoting the new servers in the US. "We're an end-to-end solutions company."

The company has followed a plan of transformation for several years now, changing itself from a hardware maker to an information-technology company. Of the 110,000 employees at the company, Dell said 47,000 now work in business services.

According to its latest financial report, the US-based company's enterprise-solutions and services divisions had $18.6 billion in revenue in the year ending Feb 3. Its consumer unit, meanwhile, saw sales revenue decrease by 2 percent to $3.2 billion during the quarter that ended on the same date.

"Within the context of a $3 trillion global market in information technology, consumer is $250 billion," said Dell. "The commercial business is $2.75 trillion. We tend to focus more on that."

Dell is not interested in selling inexpensive PCs, but the PC market is still important in China, said Steve Felice, Dell president and chief commercial officer, on Tuesday. He said China is the second-largest market for Dell following the US, and the market is the origin of about 10 percent of Dell's global sales revenue, to which hardware sales still contribute greatly.

According to the US-based technology research company International Data Corp, China spent about $148 billion on information technology last year, of which about 70 percent primarily were allocated to hardware.

"It just reversed to a mature market, if we take a look at the Chinese market, the hardware proportion is much higher than in the US," said Michael Yang, Dell vice-president and Dell president in China.

China, with a population of 1.3 billion, has a consumer market that is much bigger than other countries'.

Of the company's global sales, about 20 percent come from consumers and about 80 percent from commercial buyers. About 50 percent of the company's profit comes from information technology.

Yang said the Chinese and US markets differ greatly.

He said in the "last quarter we had a 15 percent growth rate in the Chinese market, led by the growth of all countries and regions, while hardware still played a crucial role in the market".

"Dell continues to invest significantly in its enterprise capabilitiesit's clear that the company is laser-focused on growing its share of the enterprise market," said Matt Eastwood, group vice-president of the enterprise-platform research division at the research company International Data Corp.

China Daily

(China Daily 02/29/2012 page16)