Dell tweaks financing model to meet unique SA tech needs
● One of the biggest technology manufacturing companies in the world regards South Africa as a model for how businesses grow into the use of hi-tech products and services.
As a result, Dell Technologies, formed in 2016 from the record $67-billion merger between Dell and EMC Corporation, has introduced a tailor-made financing model in this country through its Dell Financial Services division.
“South Africa is now a location that shows us how to service the broader region,” said Aongus Hegarty, president for Europe, Middle East and Africa of the company’s core subsidiary, Dell EMC.
Speaking to Business Times on the eve of this week’s Dell Technologies World expo in Las Vegas, he said the company, working with a local banking partner, had introduced a financing cost model rather than a capital expenditure model to fund South African businesses’ technology evolution.
“If they can’t justify investment in new technology today, they can still get the benefit of that tech today and grow into it over time.”
Hegarty said the model was geared towards the next four to five years, based on consumption, “almost like the way you pay for electricity”. This allows for seamless growth in technology use if there is significant growth in the business.
The strategy is closely linked to the theme of digital transformation, which underpinned most of the proceedings at the event. Company founder and CEO Michael Dell pointed out that businesses globally were in the midst of an intensive technology investment cycle.
Reimagining technology
“Every customer I meet is reimagining how they use technology,” he said. “Technology is now at the very top of the agenda for business leaders everywhere, because today technology strategy is business strategy.”
Hegarty argued that South Africa was no different, but that financial constraints meant business visions tended to be more long term.
“So you put forward a vision that’s 10 years ahead, but you still need a 12- to 24month strategy, and you need to get the technology impact today,” he said. “Our South African customers are very much about business outcomes and how to enable those.”
Hegarty said he worked closely with Doug Woolley, Dell EMC general manager for South Africa, and Mohammed Amin, vicepresident for Middle East, Turkey and Africa, to “unlock the potential of our $4-billion-ayear [about R51-billion] investment in research and development”.
South Africa also represented a success story in seamless integration of the Dell computer and EMC storage businesses, as a territory where “the business synergy came together from day one”, said Hegarty.