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Wednesday, 25 May 2011 17:53

Dell enjoys Midas effect of services

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The transition to become more of a full IT services supplier has delivered something of a Midas effect for Dell, allowing the company to increase its margins by 5 per cent over the last year, delivering a 188 per cent surge in earnings per share figures.

Joe Kremer, managing director of Dell ANZ, said that the transition to offer fully fledged solutions to customers, surrounded by a mesh of different services was what had allowed the company to increase its earnings per share figure to a record US49 cents for the first quarter of its 2012 financial year even though its revenues grew by a much more subdued 1 per cent to $US15 billion.

Mr Kremer said that the company's 'Transformational agenda continues to progress.' That agenda centred around the question; 'How can we build solutions rather sell them stuff?'

Mr Kremer said that Dell was 'Not interesting in a big low margin deal.' Such was its push into the services business that it was now managing more than 1 million client units in Australia alone.

That approach coupled with the services push had allowed the company to be; 'Up over 500 basis points on margins year on year.' The company had also improved efficiencies he said, which accounted for the meteoric rise in earnings for the quarter.

Mr Kremer said that the Asia Pacific Japan region had grown even faster than Dell managed internationally but did not provide details.

While the company does not break out local figures - and was even coy about providing a local headcount for the company - Mr Kremer said that Dell had experienced 10 per cent increase in sales to corporate users, 12 per cent increase in sales to the public sector and consumer, and a substantial 27 per cent hike in demand from the small and medium business sector.

The company was continuing to grow its staffing levels having hired 'several hundred people last year,' and a further 100 this year. Mr Kremer claimed that the company was not having trouble finding skilled staff, and was attracting people from rival companies.

Although Australia's leading recruiters are all pointing to a nascent skills shortage, and calling for a relaxation of the rules regarding temporary work visas for ICT workers Mr Kremer said that Dell's reliance on workers on 457 visas was now 'at its lowest level'


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