Indonesia is an attractive market for top global computer manufacturers, supported by the steadily improving economy over the past few years. Dell is one of several companies competing fiercely to tap the country's huge market. The Jakarta Post had a chance last week to talk to Andreas Diantoro, Dell Asia Pacific regional director for South Asia and emerging markets, about the firm's performance, globally and in Indonesia. The following is the excerpt of the interview:
Indonesia's economy has been rather sluggish this year, but maybe it's a different story in the IT sector. How has business been going lately for Dell here in Indonesia?
Let me just give you a wrap-up of Dell's third quarter results for this year -- worldwide, in the region and for Indonesia.
Worldwide, Dell has managed to meet Wall Street's expectations again, after a bit of a run-down some time ago. Our shares are up 20 percent to some US$26 now. Coming to the region, the Asia Pacific and Japan remain one of Dell's main contributors to growth. In terms of sales revenues, we grew by 16 percent year-on-year.
Coming down again to the South Asia region, which I manage, Dell grew by an average 38 percent. The two main markets here were India -- which grew by 45 percent -- and Indonesia -- at 32 percent. We even saw a 61 percent growth in the second quarter. This is all higher -- nearly twice -- than the average growth for the Indonesian computer market of between 19 and 20 percent.
And how have these latest results translated into Dell's market share in Indonesia?
They're good indicators that the Indonesian market is starting to recognize and accept the Dell brand now -- identifying Dell with their computing needs.
Now if we look at the Indonesian computer market itself, there are basically three market segments: for enterprise computing, for small and medium-sized businesses, and the consumer or home computing market segment.
Dell in Indonesia is now only playing in the enterprise or large corporate computing market segment, and our position in that market segment is already at No. 2. For the whole computer market, we're No. 4, and that's just because we haven't developed the other segments yet. We can say that that's quite an improvement, because a year ago -- when I first joined Dell in November -- we were only No. 5 in the enterprise market segment. For the whole market, we barely made it to the top ten.
So things are going well, with Dell moving up in the market. And we're aiming ahead to be No. 1, though we know it will be an uphill battle against the incumbent market leader, which has managed to establish itself so strongly in Indonesia.
And all of this wasn't at all affected by the case this year of faulty batteries in Dell's notebook computer products?
Well, we admit that the case had indeed affected the market's perception on Dell. People began to perceive that Dell was like this, and Dell was like that -- in a not so favorable notion. But then Dell immediately took action to recall all its notebook batteries. We were the first computer vendor company to do so following the case, and we did it even though the faulty batteries were actually manufactured and supplied by Sony.
Dell recalled and offered replacements for 4.1 million batteries, from some 16 million notebooks we had sold in the past four years. And from the 47 found cases of faulty batteries worldwide, only 3 were Dell-brand notebooks.
In Indonesia, there was one client of ours, a major telecommunications company using some 2,000 Dell notebooks, and we found that none of them were affected. At another major telco firm, we found only dozens affected, and we replaced them all.
And from my own discussions with customers, they appreciated Dell's prompt decision and efforts to go all the way to maintain customer satisfaction. So it all turned out in a positive way for us in the end, and it's impact to our business was not significant.
So what will be Dell's strategy to further improve its business, its image and its market share here in Indonesia?
We've recently moved our South Asia regional headquarters from Singapore to Jakarta. We also see the large potential of the Indonesian market. So we'll be hiring many local professionals from Indonesia to help develop and manage the region.
But establishing a large marketing team and network is not the only importance here, because it all eventually comes down to the sales results. So we're aiming at creating an effective and efficient team, with the highest possible sales revenue per head count.
What about Dell's particular strategy in developing and improving its main enterprise computing market? And will Dell also look into entering the other market segments, particularly home computing, with its trend of media center PCs and game consoles?
What Dell has always been concerned of in its enterprise computing customers is that they should never get themselves locked in to a particular computing technology. And this is exactly what we can provide them with. Dell can provide such solutions, with our open standards system.
Our customers' business is No. 1, its IT is No.2, meaning the IT solutions implemented should always be to support the customers business, and not become a liability.
Just for an example, if a customer chooses a proprietary IT solution, its maintenance alone after three years will be enough for a total upgrade of the whole computing system. With Dell, this is guaranteed not to happen. Possible occurrences of the computing technology becoming obsolete in a too fast manner can also be minimized, as Dell has agreements with all of its suppliers on their technology roadmap.
With Intel for example, Dell has a technology advance notice for the next five years, as compared to other vendors having only three years. So if Intel has lately announced its release of dual-core, and later quad-core processors, all of Dell's products are ready for that. "Future-proof", we call it.
As for the home computing market segment, we're looking at it in the future, but not for now. We'll still be focusing on the enterprise server and storage solutions first, focusing on being a provider for business IT infrastructure. We'll eventually be bidding for the whole computer market, but step-by-step, and I can't say yet when exactly Dell will take on the personal computer market.
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