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Techaisle Blog

Insightful research, flexible data, and deep analysis by a global SMB IT Market Research and Industry Analyst organization dedicated to tracking the Future of SMBs and Channels.

Dell India: Priming for IT leadership position

Intense India Focus

Indian government's Digital India campaign is getting the attention of almost everybody in the IT industry, be it the multinationals or the local players. Sensing the vast potential, Dell started early with its governing body inaugurating the entire launch of Digital India in Delhi. Summing up his excitement, Alok Ohrie, President, Dell India said, “It is one of those campaigns which I believe is going to really position the country to a point where clearly it will continue to become stronger as an economy and would help realize the dreams of the nation with regards to it being a knowledge based economy. This is one initiative from the government that's going to really energize spend on IT and it is also going to be a big play for most of the players in the IT industry”.

Dell in India is also beyond just domestic operations. Almost all business functions that exist globally are represented in India including an R&D setup of about 2,500 engineers and PhDs. The India-based R&D unit seems to have played a big hand in the development of Dell’s 13G server technology.

Capitalizing on privatization

Immediately after privatization, Dell executives saw the potential for an accelerated pace of execution of various initiatives at a global level as well as a whole lot of flexibility and encouragement to try new go-to-market models. This agility is what Dell India needed and as per its executives “has benefited Dell India big time”. In fact, they are quick to point out that the India operations have grown a little faster than the global business, “our growth in India versus the competition is five to six times faster”.

Midmarket businesses in India are listening and are accepting Dell’s end-to-end solution story and are expecting an advisory role and a consultative approach from Dell in their engagements. Many digital commerce businesses are also looking for Dell to help them define a blueprint for future with regards to IT deployment. Being private with an end-to-end solution orientation Dell’s India sales organization is neither getting limited nor getting constrained in its alignments with customer business objectives, nudging the customers to a future ready infrastructure capable of delivering a future ready enterprise. Playing an advisory role is also forcing the sales organization to be creative in its solution design, unrestricted as it does not have any legacy to protect.

The new GTM

In early 2014, Dell India rolled out a new GTM strategy for the India market. The new GTM strategy was first piloted in India and provides customers with a choice of being with Dell, either direct or indirectly through a partner. It is a GTM model that lends itself extremely well to improving Dell India’s engagement across different customer segments. This strategy brings a change from Dell India’s direct approach in the past with Dell introducing three RTMs: 1/Dell Led for direct sales engagement, 2/ Partner Led for business accounts with special pricing and products; and 3/ Distribution Led for consumer IT products.

Within the GTM model there are three different RTMs (routes-to-market). First is the Dell-led RTM which is Dell’s direct engagement with end-customers. Some of the account managers’ training modules have been modified to help them have deeper, richer, more mature conversations with customers in the form of advisory roles and consultative approaches. However, Dell-led RTM does not mean that partners are shut out from engaging in the same account along with Dell. The partners bring complementary skill-sets to work along with Dell solution experts. Dell asserts that it is more than willing to work with a partner and hence Dell has named the RTM as Dell-led and not Dell direct.

Within the Dell-led RTM, Dell has further segregated accounts into two: one that is more of reach, development & penetration consists of Dell India’s existing accounts and where a lot is already known about the customer; and in the other are those accounts that Dell calls as activation. There are close to 2,500 accounts in Dell-led RTM which are split into four geographies - the north, south, east and west.

The second RTM is the Partner-led RTM for business accounts with special pricing and products. Apart from the 2,500 accounts, the rest of the named accounts have been identified for partners to engage with by identifying, developing and addressing the opportunities. Dell is in a support mode in these opportunities.

The third RTM is distribution-led RTM focused on consumer IT products. This RTM was developed to expand reach into customers in tier 3/4/5 cities as well as customers who are not IT savvy. Dell currently has five distributors in India and a web of local distributors to reach into remote areas of India.

Disappearing Partner Conflict

Dell is recognizing the need to erase the perception of consistent channel conflict and hopes that the three different RTMs will help. Alok Ohrie points out, “anomalies have been removed through the new GTM model and it is a very, very predictable model for the partners”.

Techaisle’s India analyst, Gitika Bajaj and Arun Mishra crisscross the entire country directly meeting with channel partners. Not every Dell channel partner is happy but from an overall perspective there is obviously tremendous momentum and Dell’s RTM has legs. Comparing Dell with its closest competitors, channel partners say that “Dell's responsiveness is impeccable when a deal is being struck at the end user level”.

Ajay Sawant from Orient Technologies, a Dell partner says “till 2013 we were competing with Dell. There has been a big change since then, from being a competition to a collaborator. Dell has made us more powerful with Dell-led RTM Model and we appreciate Dell’s strategy of a different route to market.'' But he also provides some words of caution, “Dell partnership is a collaborative journey which is long and tough''.

RS Shanbag from Value Point technologies echoes the sentiments of some other channel partners, “….innovative approach, exciting journey, great support. '' He sees deal registration process as one of the most critical areas and a big differentiator.

Quota Partner concept

In the past 2 years Dell has been strategically appointing partners in A, B, C and D class cities of India. Dell carried out a concerted, concentrated and collaborative approach to engage these partners who had been working in a very traditional manner with Dell’s competitors. These are called Quota Partners. At last count, there were 138 such partners and are among the top systems integrators in India. Quota Partners source systems solutions directly from Dell and to facilitate the process Dell introduced a mobile application “Mobile DR” wherein partners can place orders, track progress, and manage their benefits.

Continued Consumer Concentration

Dell in India has a very large business in the consumer segment. It has a vast network of retailers - multi-vendor retailers, large format retailers and Dell exclusive stores. By the end of 2015 there were 825 Dell exclusive stores covering 609 cities in India where customers can walk-in, get all possible product details, have a touch and feel experience.

To support the consumer business, Dell has a fairly large manufacturing setup which is about an hour and a half drive from Chennai in Southern India. The factory is built on 100 acres land and has a manufacturing capacity of about three million units. Almost half of that capacity is currently utilized for selling within the Indian domestic market. Dell India is in discussions with the government to see how an ecosystem of smaller manufacturing facilities could be set up to feed into Dell’s manufacturing.

Dell is also in discussions with the Indian government to see how the regulations could be simplified with regards to exports. If it comes through Dell’s India factory would serve not only domestic customers but also become part of international supply chain.

Still a Box Pusher?

For the longest period of time, Dell has been known as a box pusher. For every solution, either there was a PC or a server or both. Although its product portfolio has evolved but in every media or customer interview that Techaisle does, the question still comes up. In the India context, Dell is consciously not spending time to massively change that perception but is hoping that through increased one-on-one selling within the enterprise and the mid-market customers or even the small businesses Dell will able to educate not only the customers but also channel partners by presenting a more modern solution oriented and consultative sales approach.

Many midmarket customers that Techaisle has spoken with recently say that they find the new Dell to be a lot more solutions oriented, a lot more systematic, problem solving oriented company and very clearly helping them in building their future ready infrastructure.

Midmarket battleground

The midmarket has become a battleground with almost every IT company having set its sight on the segment. To gain share and penetrate into the midmarket segment Dell has identified 130 solution partners. These are partners who, apart from having very good solutions are very focused on solution selling. These partners have also developed good human capital which they are able to leverage in customer engagements. Dell is “letting them loose” to find and develop midmarket customers. In addition, Dell has created a channel financing program with extended payment plans for these most important solution partners. This helps in better margins and improved competitiveness. Dell calls it the “Dell strong program”. Ajay Sawant, a Dell partner, said that Dell’s concept of channel financing is a fantastic value addition.

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