Dell Malaysia expecting a ‘flattish’ 2016

  • Grew this year in local currency, partly due to strengthening of US dollar
  • Says new Dell PowerEdge servers are the key to addressing SME pain points
Dell Malaysia expecting a ‘flattish’ 2016

US technology giant Dell Inc is expecting a rather ‘flattish growth’ in Malaysia for next year, as companies increasingly feel the effects of the volatile currency exchange rates.
“I think the shock of the implementation of the Goods and Services Tax (GST) will be over. The challenge now is the foreign exchange (forex) volatility,” said Dell Malaysia general manager K.T. Ong.
Malaysia rolled out its GST, a consumption-based tax regime, on April 1. While it affected ICT sales in the first few months, the market has mostly corrected itself, according to the National ICT Association of Malaysia (Pikom).
“The problem with doing business is not the high or low forex rate – it is the uncertainty,” said Ong.
“If the US dollar can remain stable at one level, then it will be easier for companies to plan their budgets. Now, companies are very cautious,” he told a media briefing in Kuala Lumpur on Dec 17.
Nevertheless, Dell Malaysia remains optimistic of its outlook over the longer-term, especially once the forex rate stabilises.
“I think the market will get used to it. Also … in order for a business to flourish and grow today, you need to adopt IT.
Dell Malaysia expecting a ‘flattish’ 2016“We are in an era where technology trends are changing the way we work,” said Ong (pic), claiming that Dell Malaysia managed to register growth for 2015.
“In terms of the US dollar, our growth this year was flat, but in terms of the ringgit, we recorded growth,” he added.
Ong said Dell Malaysia’s revenue growth was driven by a few factors, including a pre-GST “shopping spree,” when companies rushed to buy IT products before the new tax regime kicked in.
“Prior to April, 2015, everyone rushed to buy. After April, demand went down because people had already bought a lot,” he said.
Ong however admitted that 2015 was a challenging year for Dell Malaysia, some of its partners, and its customers.
“There were vendors that were hit pretty badly. There was not much growth in US dollar terms. However, these were all within our expectations,” he said.
“One of our customers’ biggest challenges in 2015 was the forex rate, as there are those who had fixed their budget a year ago – at that time, the allocation may have allowed them to buy 500 PCs, now the same budget can only buy them 300 PCs,” he added.
To help customers to overcome these challenges, Ong said Dell Malaysia would have to come up with alternative solutions.
“For example, if customers have desktops that are three years old and do not have enough of a budget [to purchase new ones], we will suggest that they increase their warranty by another one to two years instead.
“So we do have programmes for customers to overcome situations like this,” he added.
New PowerEdge servers
Dell Malaysia expecting a ‘flattish’ 2016Ong was speaking to the media at the launch of new Dell PowerEdge 13th generation servers, which he declared would address some of the pain points faced by small and medium enterprises (SMEs).
The servers, which include the Dell PowerEdge R330, R230, T330 (pic) and T130, are the company’s first-ever single-socket rack and tower servers aimed at SMEs and remote offices, as opposed to the preceding dual-socket servers.
The new servers come with the latest Intel processors, DDR4 memory, and OpenManage software that would make it easier for users to deploy and run the systems, according to the company.
“These single-socket rack and tower servers make it more cost-efficient for SMBs and remote offices to own one,” said William Tan, head of enterprise solutions at Dell Malaysia.
“An entry-level model can be cheaper than a [high-end] laptop,” he quipped.
Tan said that the ICT adoption amongst Malaysian SMEs was still at a relatively low rate.
He said that in developed countries, the ICT adoption rate amongst SMEs was around 50%, but that the adoption rate in Malaysia may be as low as 10%, although he did not cite his source.
Ong is hoping that this adoption rate can be boosted to the 30% range over the near term, as this would help Malaysia become more competitive regionally, and globally.
He said that one of the keys to growing the SME segment is to create greater awareness of how ICT can help owners improve their business by lowering costs and extending their customer reach.
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