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Michael Dell said it didn’t take long to realize the value of markets beyond the United States.
“We started the business in 1984,” Dell said during the Dell World 2014 show in Austin, Texas, last week. “In 1987, we were expanding outside of the U.S.”
The CEO was talking to a group of five international journalists—from such places as Brazil and India—as well as a reporter from eWEEK. During a wide-ranging, 45-minute discussion, a confident and combative Michael Dell touched on his namesake company’s role in what he called the “data economy,” competitors such as Hewlett-Packard and Lenovo, and his company’s continuing evolution into a full-fledged enterprise IT solutions and services vendor.
However, the bulk of the meeting centered around Dell’s opportunities in emerging markets, which he said are more vast than they are in such established regions as the United States and Western Europe. These markets have some of the fastest growing companies, a lot of economic growth and many people, he said.
“When you’re talking about the next billion users, they’re not going to come from developed markets,” Michael Dell said. “They’re going to come from developing markets.”
About half of Dell’s revenues come from outside of the United States, he said. Like most other tech vendors, Dell sees the potential in emerging markets like China, India and Brazil, countries with huge populations and growing middle classes that have disposable incomes and businesses that want to compete in a world market and are looking to technology to help them. Michael Dell said that, from Asia to South America, the signs for his company are positive. For example, pointing to Brazil, he said the market there for Dell “looks very favorable.”
The potential can be seen in the much-talked-about Internet of things (IoT). According to Cisco Systems, there are about 25 billion connected devices in the world right now. That number will double by 2020, and continue to rise after that, officials with the networking giant have said. And it’s not just the devices themselves that define the IoT; the amount of data that will be generated by the Internet of things—data that needs to be collected, stored and analyzed—will grow rapidly. Cisco officials predict that by 2018, the amount of mobile data traffic worldwide will hit more than 30 exabytes a month.
It’s a global phenomenon, one that can be seen in countries around the world, Michael Dell said. He pointed to the smart city and smart education initiatives underway in India as examples. Dell’s efforts in becoming a complete enterprise solutions provider—from the PCs and tablets on the edge through the networking, storage and servers in the data center to its cloud offerings—will enable it to meet the changing demands both in the United States and worldwide, he said.
“I’m excited about the … data economy,” the CEO said. “I truly believe all this data can determine outcomes and results. We are just scratching the surface of that opportunity.”
In response to a question, Michael Dell said PCs will continue playing a key role for his company, echoing comments he and other Dell executives made throughout the three-day show. PCs are important for everything from customer acquisition to having a complete enterprise offering. Despite the declining sales worldwide over the past three years—due in large part to the growth in popularity of tablets—PCs are still a fundamental computing tool for much of the world’s population. That is even truer in developing markets, where hardware continues to be a high priority. Businesses in these countries still need networking and other technologies, “but they start with the basics,” Michael Dell said.
“If you give people the tools they need to make them more productive, you give them a PC,” he said. “Maybe not just a PC; maybe a PC and a smartphone. But the PC [is important].”
Michael Dell: Emerging Markets Key to Future Growth
Other topics the CEO discussed included Dell’s competition, its services and its role in the mobile space.
Regarding HP, Michael Dell reiterated what he had been saying throughout the company’s conference: that HP’s decision to split into two companies—one focused on PCs and printers and the other on enterprise IT technology—was done more to satisfy Wall Street and shareholders than its end users. That will be good for Dell as the company sees the chance to lure away some HP customers unsettled by the change.
“No matter how well they do this, they are causing some confusion and disruption in their business,” he said. “So we see this as an opportunity.”
Michael Dell also touched on Lenovo, which is rapidly building up its capabilities in such areas as servers. Lenovo is now the world’s third-largest server maker—behind HP and Dell—after buying IBM’s x86 server business for $2.1 billion. It also is looking to bulk up its smartphone and tablet capabilities through the $2.91 billion acquisition of Motorola Mobility from Google.
And it’s not only the businesses Lenovo’s buying that make it an interesting challenger to Dell and others, but also the fact that it is based in China, a key developing market. While he wasn’t sold on Lenovo’s recent acquisitions—neither IBM’s x86 server business nor Motorola was profitable—Michael Dell focused more on the opportunity in the $3 trillion global IT market. Dell accounts for about 2 percent of the market and Lenovo about 1 percent. There’s a lot of room to grow, he said.
In the services space, Dell engineers are working to expand the company’s ProSupport enterprise support services to all countries to make it easier for businesses in emerging markets to embrace the vendor’s technology, Michael Dell said.
He also fended off questions about whether his company has plans to expand its consumer offerings in such areas as smartphones. That won’t happen, he said.
“You mean enter a business where pretty much everyone else is losing money?” Michael Dell said in response to a question. “We don’t have to be in every business, and just because it’s fashionable to do it doesn’t mean it’s a good idea.”