Dell's high hopes for the UK

Dell UK was the first subsidiary of the company outside the US, and remains one of the company's most successful businesses, with a mature market and user base. Now it is growing again, taking advantage of uncertainty around the positions of HP and IBM in Scotland to use that country as a new base.

Dell UK's country manager, Josh Claman, has been with Dell UK for almost a year now, after replacing another US native, Bill Rodrigues, at a part of Dell seen as a useful staging post on the high-flyers' corporate ladder. It was Rodrigues who began Dell's expansion in Scotland, but Claman who will continue it.

ZDNet UK sat down with Claman recently to discuss his expansion plans and why the UK is looking like such a good bet right now for the PC maker.

Q: Dell's UK arm has been around a long time, and has been pretty successful in building up a solid user base. What are the issues in managing an operation from a mature base?
Claman: A lot of the time we spend on tactics and strategy because it is a pretty high market-share country. We have our core markets but I think we are the fastest-growing storage vendor in the UK now. So we think a lot about things like storage and printing and services, whereas in a lot of our low market-share countries there is a lot of that core [market] still to grab.

There are areas where we have very small market share, printers is one, but the reception from our commercial customers has been very good. They want competition in that market. They know they have been paying too much for proprietary technology. In services we have a tiny share. That is an extremely fragmented market. The number one in services, which I believe in the UK is IGS, has about a 6 [percent] share. So it is incredibly fragmented. That is a huge growth opportunity for us.

HP is playing the total cost of ownership model very strongly. How do you react to that?
On the cost side, we have driven costs out of servers. I think that has probably hurt HP and IBM because we have driven aggressively that cost curve. The new dimension in servers is that it is not just price/performance anymore. It's price/performance per watt.

That's a concern but it is interesting that that's a concern for a very small minority of our customers. But for all of our customers, particularly as the cost of fuel goes up, they become much more aware of the cost of computing. Now it is probably a good thing to use a little less power, the cost issue aside, to be a little more "green" about these things.

Data centres have been hugely power hungry forever and that's not just the computing, but the cooling, the environment and so on.

We are addressing that very aggressively and so our latest model servers go much further in terms in price/performance per watt. We have leadership there and in overall power consumption. With Woodcrest we will be better.

Where are you with AMD? We hear different messages.
There has been a lot of speculation. I cannot really respond to you directly. We're planning, we're debating, we're speculating — internally — and what we have announced we have announced. There are certain plans and...

... that has added to the swirl of speculation. It would be irresponsible of me to comment.

How did Dell wind up with a 25 percent share of the Linux market?
In the UK it is higher than that. Linux in the server market is 35 percent in the UK. It's 25 percent worldwide. The earliest adopters of Dell technology in data centres and large environments were really trying to drive a couple of things. They really believed in the standards message. So that was years ago and you saw this share creeping up and then suddenly with Red Hat and some of the other providers there was a robustness around Linux. That gave them a much higher level of comfort after it became commercially viable. Now you see the banks and others experimenting with it, so we think it is just going to continue to grow.

You know, for years we have been tracking "Wintel" versus proprietary OSes in the data centre, and now it is split into three: proprietary, Windows and Linux. Now we're indifferent. And we want to stay indifferent. We certify all open OSes and all standard OSes on our platform and we will continue to do that.

The corporate services business is increasingly important for you, but how do you convince corporate users that Dell is serious about IT services, that it has the resources, the skilled staff, etc?
We never have that conversation. We never have a CIO who says, "It makes me uncomfortable that you don't have 40,000 engineers". We never have that conversation anymore.

They like the benefits of the model. Where we are now is what I call stage three of that investment in that layer of Dell people. So we are hiring, basically as fast as we can. Solution architects, consultants, specialists around virtualisation, data centre deployment, exchange deployments, that whole layer where we are going as fast as we can because it's one of the keys to the model.

So this is version three of the services model. This is really the next wave of investment. And that's an investment based on a lot of success. These are companies that think Dell brings more to the table, not because of the Dell technology but because of the Dell brand. A lot of customers only use Dell in the data centre. They don't use us on the desktop.

How are you doing in terms of building up people, in terms of staffing? Do you find shortages of good IT people?
We are pretty picky about who we hire now. We make each hire count. We have assessment centres and then our hiring process is fairly extensive. But there are a lot of people who want to join Dell. So we are hiring from some of the big SIs (system integrators), from some of the medium-sized channel players, solutions and services people, so it is not an overwhelming problem.

So there has been a lot of movement offshore. How much of that has affected the UK?
Quite a lot of our consumer and very small business has gone to India. Very little of the business I am responsible for has gone to India, although parts have. Back office functions have gone to India, with great success. They are actually better than they were in the UK — because of quality and customer satisfaction. We are experimenting with support for some of our mid-tier accounts and that has been up and running for a year. And that, again, is best of breed in the world in terms of customer satisfaction.

So my view on India is that there is this huge potential, this huge pool of skills, but you have to go at the tight pace. And where Dell has gotten in trouble, and other companies have had the same problems, is by trying to go too far, too fast.

Instead of saying "we are going to do this function and we are going to do it well", just be obsessive about the transitional detail, the training, supervision and the incentives to staff, and meeting the local cultural requirements.When we do that, when we do it at the right pace, we get best of breed results.

So how much customer support goes on in the UK?
Well there is the home market, and some sales and most of the technical support would be in India. In a sector that we call EVU — basically mid-tier, global customers and public — it has been extremely successful.

We have also been developing Glasgow. It coincided with the beginning of my tenure here. About the quarter before that we started moving some people to Glasgow. We moved a lot of technical support into Glasgow for our commercial business. And we moved a lot of sales people into Glasgow and hired a lot in Glasgow. So we went from zero to 500 people, and that will continue to ramp up, and we will have about twice that many in the next twelve to eighteen months.

That has been extremely successful in terms of customer satisfaction and in terms of skills and enthusiasm. There are a lot of good skills. Just from the word go there have been other IT companies coming out. We hit the ground running and we do three months of training, which is a lot in our industry. That is both in technical support and in sales. Then we put them on the floor and has been just a fantastic experience for us.