Despite the economic crisis, US company Dell is still optimistic about Latin America for the next few years as it expects firms to continue investing in technology.
it is looking to continue growing in Latin America on the back of expansions in 5G and Edge computing and the company is already carrying out various tests in the region, particularly for private corporate networks.
It is also taking advantage of the multicloud trend to offer platforms that reduce the complexity of management and hoping to gain ground in the cybersecurity area, which is already seen as one of the main focuses of the firm’s investments.
In this interview, Dell’s president for Latin America, Luis Gonçalves, speaks to BNamericas about the company’s outlook for the region.
BNamericas: In which areas do you see the biggest opportunities for Dell in Latin America?
Gonçalves: We continue to see growth opportunities in the more traditional markets, which are the PC and datacenter markets. However, Dell is taking advantage of all its knowledge and products to develop other markets such as telecommunications, 5G and edge computing. These are markets that add to the traditional markets, not only in Latin America, but throughout the world.
BNamericas: Latin America is just beginning deployments of 5G networks, how do you see the operators’ investments in the types of solutions that you offer?
Gonçalves: The telco market is still very incipient. World Bank figures indicate that only 1% of mobile services use 5G, compared with 20% in North America. There is still a lot of room to grow.
What we see with 5G is that the technology allows the opening of networks and the use of elements of the traditional IT industry such as servers, applications, etc. And this also leads to the opportunity for the edge of the network.
We’re not only seeing telcos starting their pilots, but companies also using 5G technology to create their first private networks that connect to public 5G networks offered by traditional operators. There are already lots of pilots that we’re working on with clients, developing capacities, abilities to manage everything and integrating with traditional IT and the cloud.
There’s a tremendous opportunity with 5G and the edge of the network.
BNamericas: Could you tell me more about the pilots that are being carried out in the region?
Gonçalves: I’ll give you the example of an automotive company in Brazil that has already started on a private 5G network that’s connected to its production systems to monitor a quality control stage.
This is connected to a public cloud through a 5G network delivered by one of the providers in Brazil. I can’t share the names for reasons of confidentiality.
The opportunity is already seen as quite solid because [the pilot] started very well, the case study was verified, and now they are going to expand it to other applications within the plant.
It’s a plant located in a remote area of Brazil, where telecommunications arrive in a very limited manner and not only was 5G extended to all those who work in the plant environment, but it was also connected to the cloud and the quality control application.
BNamericas: Besides manufacturing, what other industries are there opportunities in?
Gonçalves: There are other industries, but this is the most obvious case. I think that in everything related to retail, which has large movements of the public and public services, there are also quite obvious use cases.
The technology we offer can be expanded very quickly and it takes advantage of the traditional architecture of virtualization, orchestration and computing and storage capacity.
BNamericas: Initially you mentioned that the biggest opportunities were still in traditional businesses. What do you expect for these new 5G, edge and data areas?
Gonçalves: [Market research firm] IDC expects everything related to traditional business to grow by 9%, more than the increase in the region’s GDP, so there’s still a huge opportunity for companies like Dell.
Now, 50% of all infrastructure to be deployed after 2024 will take place on the edge due to the advance of 5G and edge computing technologies.
If we look at the global market, we have US$750bn in the traditional market and a similar market for 5G and the edge of the network, which is just beginning. In other words, our market could be doubled.
Latin America accounts for close to 5% of the world’s GDP. It’s a region with 650mn people, there’s a lot of room to grow and we’re somewhat behind, so the opportunity is bigger.
BNamericas: Latin America has a complex economic context, but investments in technology don’t seem to be stopping. How do you see the situation?
Gonçalves: I’ll give you some figures. The server business in the region grew 10% in the second quarter of the calendar year. The storage business grew by 8.5%. Dell grew 31% in computing capacity and servers, more than the market, and in storage we grew 16.5%.
The market continues to grow because it continues to invest in technology due to the lag of the pandemic. So, even though we have economic problems, growth of technology should continue to be very consistent. The amounts may vary a bit, but the expectation is that we will continue to grow.
BNamericas: We’ve seen disruptions in supply chains. What’s the situation now?
Gonçalves: The supply is improving, but there are still weaknesses. For us there’s a very intimate and close relationship with suppliers because our business is based on the supply chain. There are no inventories and everything is done in accordance with the needs of customers.
Today there are still areas that are quite affected. It still hasn’t been resolved, but because of our position and our supply chain, we believe that we did well.
BNamericas: What types of areas are still having problems?
Gonçalves: Essentially in datacenter solutions, some of the network area and servers.
BNamericas: Finally, looking toward 2023, what will Dell’s main focus be?
Gonçalves: There are two very important areas. The first is cloud adoption, which continues to grow in Latin America. Most customers have up to three different public cloud providers, but don’t yet have a multi-cloud environment. Each one of these providers has its peculiarities, its rules, its platforms and architectures, which makes the management of these clouds very complex. At Dell see an opportunity to take cloud management platforms that extend even into customer datacenters.
On the other hand, there are also the consumption modalities, because many clients want to consume as services and have a layer where all IT costs are absorbed as services in their private or public cloud. This is what we’re offering.
The second issue is cybersecurity. All companies have realized that data is very valuable and they’re all trying to work on their cybersecurity strategy.
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