Monday, February 06, 2006

Dell Affirms India is the Best Service Providing & Manufacturing Base

Last month-end, Texas-based Dell, only the world’s largest computer maker said it would be setting up its fourth call centre on the Indian sub-continent, and is scouting for suitable land for a manufacturing plant in Asia’s third-largest economy.

With 10,000-employees on its payroll in India, Dell along with compatriots like General Electric have set up huge business process outsourcing units on the sub-continent, home to a vast pool of low cost English speaking workforce. Companies like Dell, which develops software in India and Nokia are all geared up to set up Indian manufacturing bases, that will fuel the local market demand in India’s $700-billion economy with an 8% growth forecast for 2006.

India is not only a resource base for talent, but is now also a market space.” Kevin Rollins, Dell’s chief executive, told reporters. “Our intent is to be here for the long term. The time is right to consider setting up a manufacturing site in India.

And, India’s telecommunications and information technology ministry expects planned foreign investment in its booming sectors to double to $22-billion in 2006, as global firms establish bases here. Also, in the pipeline are Dell’s plans to double the number of the 300-product development engineers, it currently employs in India by 2008.

Presently, with only a miniscule share in India’s exploding market, Rollins in a meeting with the Indian Prime Minister Manmohan Singh did not disclose any figure amount for his company’s planned investment, the timing or the probable site for the proposed manufacturing plant. “We have a 3 to 4 percent market share in India.” said Rollins, adding Dell’s target was to raise it, initially to the 10 percent, the company enjoys in much of the rest of Asia. According to his estimate, the next 3 to 5-years will see India with a purchasing power to buy 10-million desktops a year, up from 4-million units, currently. “India is a huge market in its own right.” said he.

But, Dell will have to compete with global players such as Hewlett Packard, International Machines, including local giants HCL Infosystems and Wipro. Still, commercial demand for computers in India is soaring as the Indian government and thousands of companies computerise their processes. Cheaper finance, rising salaries and falling prices, a direct fall out of competition is fuelling retail demand for desktops.

With call centres in Bangalore, India’s answer to California’s Silicon Valley, the southern city of Hyderabad and the northern city of Mohali, Dell’s fourth call centre unit will be situated in the tech hub of Gurgaon, on the outskirts of Delhi, and will add 1,000 more employees to Dell’s India payroll by end-2006. India will be the only country in Dell’s 30-site contact network that supports customers in all geographic regions.

According to Romi Malhotra, Managing Director of Dell’s Indian operations, the company will raise its head count to 15,000 employees in the next couple of years. India’s information technology and call centre industry directly employ 1-million people, and indirectly three times that number in jobs that range widely from transport and security to catering and housekeeping.

McKinsey, a consultancy firm co-authored a report in December 2005, that forecasts India’s business services and information technology exports to surge by more than 25% a year, totalling $60-billion by 2010. Worldwide demand for outsourcing services such as insurance claims and payroll processing has helped India’s off-shoring / outsourcing industry to grow at a compounded annual rate of 56% since 2000. “Our teams in India have integrated well with Dell's operations.” Rollins said, adding he expected the firm’s global sales growth to exceed industry growth during 2006.

No doubt, that should put a cork in the mouth of all the naysayers who continue to prophesise that off-shoring / outsourcing to India is not to the advantage of the American economy. If Dell from a miniscule 3 to 4% is planning to up its ante by 10% and more, does that not prove it has found its Indian based operations to be functioning better than envisioned. Young Indians have shown the Doubting Thomases of the world, they have it in them to put their country on the fast track to continued and steady growth. Whereas, the British Raj left the sub-continent an emptied husk, new growth and offshoots are raising their heads to the sun, as the world salivates and hungers for a taste of them. The young Turks, the young guns of India are working to fill its empty and stolen coffers, they have wiped the sneer off the faces of those that dared. More power to them, may the force be with them. Not only have they removed India from the map of the Hippie Trail, once again, they have put it on the map of the world.

India, is no longer The Jewel in the British Empire’s Crown, it is the most coveted jewel of the Global Crown.
For details read here.

The article is sponsored by A-1 Technology Inc, dealing in software outsourcing, offshore outsourcing and offshore software development.