Computer giant Dell is transitioning from being a direct PC seller and is now including retail. Dermot O’Connell is the new country manager driving this change in Ireland.
In March 2002, as I strolled down a street off New York’s Central Park, a flurry of activity a few yards ahead caught my attention. People with quizzical expressions formed a guard of honour. A middle-aged man in a baseball cap exclaimed: “Did you see who that was? That was Michael Dell!”
Ahead, an entourage of suits disappeared into a hotel. Having already met Mr Dell on two occasions in Limerick and Dublin, I was amused rather than disappointed at not seeing the man in person. But the incident affirmed to me that business success in the US carries the same cachet and elicits the same kind of reception as if a rock god was seen waltzing down Grafton Street
At the time, Dell was at the height of its power. To Irish people, its influence couldn’t have been more profound and fascinating. Here was a company started in a 16 year-old’s bedroom that went on to sell computers via phone and internet, create 4,500 jobs in Ireland and is now the country’s largest exporter.
In 2002, Dell couldn’t have seemed more invincible and was making the shift from being purely a PC seller to becoming an enterprise player selling complex business services.
Since then, the company has been beset by tough SEC accounting investigations, seen its share of the PC market slide and Michael Dell was forced to return to the CEO role to guide the company back onto a more profitable path.
One of the most profound changes Dell himself brought about for the company has been the previously unthinkable move into the retail business through alliances with DSG, Tesco and Carrefour.
Driving this change in Ireland is Dermot O’Connell, a 14-year Dell veteran who has been in the country manager role for less than a year. O’Connell describes the move to retail as one of pragmatism rather than sacrilege.
“The move is perfect for first-time buyers of PCs who would like to see devices physically before making a buying decision. This is a bigger factor in developing world markets than in Ireland alone.
“Most Dell PC buyers in developed economies would be second- or third-time PC owners. A big part of our customer base would spend their time reading blogs and buying online. However, the biggest spenders in retail environments are first-time buyers of computers. In future, we expect our revenues to be a combination of new adopters and mature users.”
O’Connell’s background in Dell was originally in tech support before moving into more complex professional services and the creation of Dell’s global infrastructure consulting services group.
His career mirrors the evolution of the company and recent acquisitions highlight this new direction. “For most of Dell’s history, it never made acquisitions. In the past two years, it acquired several companies, including storage company Equilogic, software as a service company Silverback and remote IT management company Everdream.
“These acquisitions will give Dell the ability to meet business IT trends, as well as the ability to remotely fix customer PC issues,” O’Connell comments.
While Ireland boasts major players such as Hewlett Packard, Dell, Intel, IBM, Microsoft and Google as key employers, O’Connell says more should be done to boost PC penetration and broadband usage and ensure the nation’s place at the front ranks of the digital economy.
“In schools specifically, a more strategic approach by the Government is required. Putting computers in schools is fine but most of them are turned off. My daughter’s classroom has a PC that’s not being used.”
In recent years, Dell has rolled out 6,000 workstations with CAD (computer automated design) software among Irish schools, allowing woodwork and technical drawing skills in schools to transition from the old A3 and T-square regime.
“This ‘top-down’ approach is what’s needed. The schools are a good start but they need support and training and teachers need to use them in their lessons. There is talk of a more top-down approach at government level and hopefully we can expect some action soon.”
On the business front, O’Connell says the picture is rosier as businesses and government bodies in Ireland are at the spearhead of most new developments in IT.
“In particular, green IT technologies like virtualisation – running various business applications on one server rather than having one server per application – will reduce the number of servers businesses use, cutting down on CO2 emissions. We predict a dramatic increase in the number of Irish organisations adopting virtualisation in the next five years.”
O’Connell predicts server and storage spend in Ireland will grow by 16pc to reach €350m in 2008.
“Irish semi-state bodies are mandating that when they buy IT, it must be absolutely greener and energy efficient technology. A lot of consideration goes into space, power and cooling. In the general business world, however, while people are ideologically green they will only make buying decisions that make economic sense.
“In Ireland, server virtualisation will catch on because there is a growing realisation that there’s a lot of waste – only 20pc of the average server is currently being used.
“This will change. If you told an Irish managing director that he had to put five times more petrol into a car to keep it running, he wouldn’t be happy.”
By John Kennedy