Dell CEO: Direct Model Is Religion

What about that argument that, while the direct model works well in regions where the Internet is well-established, it may not work so well in emerging markets, where there isnt as much access to the Internet and face-to-face contact can be more important?

Lets pick a big one: China. Last quarter, we grew 46 percent in China, faster than anyone, [and had] 29 percent revenue growth, and excellent P&L—emerging market. So it works everywhere. It works anywhere; theres really no barrier by country. Brazil—growing like a weed. India—great business.

So we dont have a major emerging market that were having struggles with, so I dont think youll see us change much as we go into new markets. In fact, what well probably do is expand into more, because [the direct model] works.

In fact, well expand into more emerging markets because weve been doing it on a very systematic and sustained level. Emerging markets pose no problem.

Do you think Dells reputation alone is big enough to get you into any market?

It is the ones we want to. We have 10,000 people in India today. India knows who Dell is. In China, were the largest non-Chinese small computer systems company. They know who we are fundamentally, but we only have 7 percent market share. We have the opportunity to grow and expand and do well in China. We have no concerns about that whatsoever.

What do you see as the biggest challenge in sustaining the success youve had in the enterprise?

We dont have a problem with the large corporate [customer]. Were already pretty dominant there. I think the issue is to continue to move into the enterprise-class products, with servers and storage.

Weve done a great job with servers, but now with the addition of blades … this coming year weve got probably the best lineup of enterprise-class products, bar none, in a long time. Its really been to just evolve the products, bring out blades, bring out the dual-core architectures, bring out a whole new set of storage products, bring new systems management capability, and then finally bring a set of services to surround that hardware and meet the customers needs.

Its not going all the way to network design and outsourcing, but its getting to the level of where you can provide all of the services a customer needs to install, to maintain and to perform in those environments, even if its a migration, a professional service or a kind of an outsourcing with a little "o," like we do with the Dell Managed Services.

Every one of those does a great job with profitability and allows us to get one step further into the enterprise, where we already have a 40 to 50 percent share.

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