XIAMEN, Fujian - Dell Inc, the world's third-largest personal computer maker by market share, will set up a regional headquarters for its services business in the city of Xiamen, as part of its efforts to seek more growth from the services market in China.

Over the past few years, major hardware makers, such as IBM Corp and Hewlett-Packard Co, have gradually turned to the software and services sectors to fuel growth as profits for hardware sales dwindle.

"Dell is investing a vast amount of money in the services business globally, and China is the major strategic center of the future," Kirk Williams, vice-president of Dell Services, said after the company signed a Memorandum of Understanding with the local government on Monday.

He said that although many companies are moving to western China due to reduced costs, Dell choose Xiamen, Fujian province, because many of its customers are still in the costal areas.

Dell's services business increased by 24 percent in China last year, according to company.

Williams declined to give an estimate of Dell Services' future performance in the country, but he said there will be "very large growth over the coming two or three years".

A latecomer in the services market, Dell Services will focus on specific industries to provide tailor-made services, Williams said, instead of offering "standardized services" for "everybody".

The company is also looking for potential partners in China for acquisitions to expand its footprint in the country.

"It's an important way to grow a business. If we grow in a normal way it's not fast enough," Williams said.

He added that it's hard to find the right company, and Dell is "still looking".

Last year, Dell made a push into the services market with a $3.9 billion acquisition of IT services provider Perot Systems Corp and, through the latter, bought the technology consultancy BearingPoint Management Consulting (Shanghai) Ltd.

However, Perot, the core of Dell Services globally, had little presence in China.

The Xiamen headquarters, which will be responsible for the company's services business in China, will have about 600 employees. Dell already has a manufacturing base in Xiamen, Fujian province.

The company also opened a factory and service center in Chengdu, Sichuan province, last year.

Dell's announcement came after it said last week it will set up more than 1,000 retail stores for commercial customers and double its after-sales service centers in China this year.

China Daily

(China Daily 03/01/2011 page16)