In for the long haul

THE FRIDAY INTERVIEW:Aongus Hegarty, Dell vice-president for SME business 

AONGUS HEGARTY may be the most senior Dell business executive in Ireland but, as he strolls around the computer-maker’s Dublin offices, you wouldn’t guess it. Fellow managers and people making coffee in the canteen address the softly-spoken Munster man by his first name.

Hegarty has the same relaxed air when we sit down for a formal interview, even when the painful issue of Dell’s decision to cease manufacturing in Limerick last year, with the loss of 1,900 jobs, comes up.

“The announcement of our closing of manufacturing in Limerick was a difficult decision, very difficult for all our team in Ireland and, of course, very difficult for the individuals affected,” says Hegarty.

Dell moved its PC manufacturing to Lodz in Poland, a decision that was seen as confirmation that Ireland had become too expensive a location for manufacturing operations.

Hegarty agrees that Irish costs, and the fact that Poland is closer to the growth markets in the region for Dell, contributed to the closure. But he also singles out global changes in the PC industry as sounding the death knell for Limerick manufacturing.

“The way in which technology is manufactured and fulfilled is very much in Asia today. All technology companies in the PC industry have their notebooks manufactured in Asia and the Far East.”

Although Dell had been a good employer in the midwest for 20 years, there was a public backlash when the job losses were announced.

Consumers voted with their wallets as within months the “buy Irish” feel dissipated and it lost its position as the top-selling PC brand here.

Dell had been a good corporate citizen in the area, supporting many community initiatives. Given this involvement, wasn’t it inevitable there would be a backlash, even if the US firm continues to employ 1,000 people in Limerick?

“Again, I’d say Dell is still one of the biggest employers in the Limerick region,” says Hegarty.

“It was a very difficult decision and very tough on all the individuals involved. I’m from Limerick. I went to school with many of the folks affected by the change. But we are very committed to Limerick, and the community involvement activities there will continue.”

Dell now has a total of 2,300 staff in Ireland. The 1,000 in Limerick involved in service and support are supplemented by 1,300 in Cherrywood, Co Dublin, who are involved in sales, marketing and support for Europe and beyond.

Hegarty is quick to point out that the company has 100 job vacancies at the moment – half in Limerick and half in Dublin.

He attributes the growth to the way the Irish operations have morphed and changed to suit the technology firm’s strategy.

Five years ago Dell employed 800 people in Dublin who were involved in transactional sales to the consumer and SME markets. Since then, he says, there has been a complete transformation.

“We have innovated in what we do. We’ve moved up the value chain to a much higher level of complexity, productivity and value-add. That hasn’t been something that just happened – we planned towards that change.”

Despite, just about, maintaining its position as the world’s second largest PC maker during 2009, Dell on a global level seems to have lurched from crisis to crisis in recent years, but last year showed signs of recovery.

“It was a challenging year – there was not a lot of growth in the market. But I think the good news is if you look at the IDC fourth-quarter market data for western Europe, Dell in all segments gained share quarter-on-quarter and year-on-year.”

Its fourth quarter results released last month also showed positive signs. Revenue rose 11 per cent to $14.9 billion, well ahead of analyst expectations, and earnings per share continued to grow quarter-on-quarter. On the downside, margins missed Wall Street expectations as consumers opted for lower-priced personal computers and as costs for memory chips and other components rose.

Hegarty says the pick-up in business began in the US and Asia, and has spread to Europe and even Ireland in the last few months.

Dublin is the headquarters of Dell’s sales to small and medium businesses in Europe, the Middle East and Africa, which Hegarty oversees. It’s a role which sees the veteran technology executive, who began his career with Digital in Galway, spend about 80 per cent of his time on the road, much of it meeting customers.

He’s passionate about the role that small businesses, which Dell defines as those with less than 50 employees, can play in economic recovery for Europe.

Not surprisingly, he is full of praise for the recent Innovation Taskforce report which recommended that Ireland support the establishment of thousands of new start-ups.

“I think what’s important now is that we knuckle down to the three or four key things in the short term that we want to do which will lay the foundation stones for the medium and long-term actions.”

While he mentions the establishment of a seed fund to support new businesses with growth potential, he says small firms need to be made aware of existing European funding that is available for innovation. It’s an issue he has raised with European commissioner Máire Geoghegan-Quinn, who holds the research and innovation brief, in particular the need not to tie up firms in red tape when they are seeking funding.

While the issue of grade inflation in Ireland’s third-level institutions has been put on the agenda due to concerns raised by technology multinationals, it’s not something that concerns Hegarty.

“It’s not been our experience, to be frank. We’ve hired over the last number of years, with the transformation and innovation of what we do here, hundreds of people with excellent capabilities and qualifications.”

It seems to be this faith in his workforce that leads Hegarty to suggest that Dell’s future in Ireland is secure.

“We are here, and we will be here for a long, long time. Dell’s commitment to Ireland is still massive, with 2,300 people across a range of disciplines. Of course, Dell and Michael [Dell, its founder and chief executive] had a tough difficult decision at the start of last year. But for me what’s key is looking forward. Building on what we have. Sustaining what we have, and continuing to grow and develop our people, our organisation, our business.”

Hegarty says he makes a point of ensuring Dell’s top brass visit Ireland regularly – his own direct boss Steve Felice, president of the consumer and small to medium business segment, has visited twice in the last 12 months and has even addressed the Dublin Chamber of Commerce.

“Their impression is that Ireland provides excellent people and talent. The performance of our businesses from these locations is excellent,” says Hegarty. “We put a lot of effort into showcasing Ireland.”

“Most certainly I would be very positive about Dell and Dell’s future across Europe and here in Ireland, given the fact that a lot of the business we do here is pan-European.”

On the Record

Name:Aongus Hegarty

Title:Dell's vice-president for small and medium business, EMEA.

Age:42

Family:Married with two sons.

Why is he in the news:Despite having cut 1,900 jobs in Limerick last year, Dell is hiring and has 100 vacancies in Dublin and Limerick.

Something you might expect:The Limerick native cites Munster and Irish rugby, in that order, as his main interests outside work.

Something you might not expect:Hegarty comes from a long line of lighthouse keepers but trained as an accountant.