DELL CONFIDENTIAL 1

Veit DenglerVorsitzender des Vorstandes/CEO, Dell, Slowakei/Slovakia

Off-shoring in Zentral- und Osteuropa im Vergleich mit IndienOff-shoring in CEE in Comparison with India

DELL CONFIDENTIAL 2

Off-Shoring in Central and Eastern Europe

CEE ECONOMIC FORUM – VEIT V. DENGLERVelden, September 20th, 2007

DELL CONFIDENTIAL 3

Executive summary

OFFSHORING TO CENTRAL AND EASTERN EUROPE IS A KEY BUSINESS IMPROVEMENT LEVER

DELL CONFIDENTIAL 4

Off-shoring to Central and Eastern Europe countries

RECENTANNOUNCE-MENTS

NEW CAPTIVE SETUPS

EXPANSION OF OUT-SOURCING PROVIDERS

LARGE OUT-SOURCING DEALS

CENTER OF EXCELLENCE FOR BANKING BACK OFFICE IN WROCLAW

CREDIT SUISSE UPS INBEV

F&A CENTER IN WROCLAW

F&A/CONVERGED SERVICES CENTERS IN PRAGUE AND BUDAPEST

NEW SERVICE CENTER IN BUCHAREST

WIPRO LOGICACMG CONVERGYS

NEW CALL CENTER IN BRNO

BILLING, CUSTOMER SUPPORT SERVICE FROM BUDAPEST

F&A OUT-SOURCING TO GENPACT BUCHAREST AND KOLKATA

NOVARTIS

DELL CONFIDENTIAL 5

Off-shoring to Central and Eastern Europe countries

ALMOST 80 NEW CENTERS IN EASTERN EUROPE ANNOUNCED IN 2006/07

2006/07 ~40,000 ADDITIONAL FTE

OFF-SHORED TO EASTERN EUROPE IN 2006/07, OF WHICH 10,000 IN NEW CENTERS, 30,000 IN EXISTING CENTERS

SEVERAL MAJOR GLOBAL OUTSOURCING CONTRACTS INCLUDE EASTERN EUROPE AS TARGET LOCATION

DELL CONFIDENTIAL 6

Executive summary

OFFSHORING TO CENTRAL AND EASTERN EUROPE IS A KEY BUSINESS IMPROVEMENT LEVER

DELL IS A GOOD EXAMPLE OF MOVE OF KNOWLEDGE JOBS TO NEW LOCATIONS

DELL CONFIDENTIAL 7

"Came for cost, stayed for quality"

TRANSACTION FACTORY

KNOWLEDGE HUB

CORPORATE/REGIONAL HEADQUARTERS

TRANSACTION CENTER FOR WESTERN EUROPE

EUROPEAN/GLOBAL CENTER FOR CORE COMPETENCIES

EUROPEAN/GLOBAL CENTER FOR CORE COMPETENCIES

Examples Lufthansa (Cracow) Zurich/Capgemini

(Cracow) P&G/HP (Bucharest)

Delphi (Cracow) Siemens (Wroclaw) SAP Labs (Sofia)

Dell (Bratislava) JCI (Bratislava)

FASTER MOVE TO KNOWLEDGE-INTENSIVESERVICES DRIVEN BY COMBINATION OF FACTORS

Talented workforce with good functional knowledge Cultural proximity/accessibility/timezone

overlap Language capabilities

DELL CONFIDENTIAL 8

DELL Evolution in Bratislava

Technical Support with up to 300 FTE for German language area

Dell launched operations in Slovakia in November 2002

Center with up to 900 FTE to support full range of customer-facing functions

Expanded by 2004 to include German-language Sales and Customer Care

Over 1600 FTE by end 2007 covering a wide range of front and back office functions

Grew to a European Business Center by 2006, w/ num. headquarter functions

1

2

3

DELL CONFIDENTIAL 9

DELL Finance in BratislavaValue

Time

Front Office

BACK OFFICE MID OFFICE FRONT OFFICE

Financial Planning &Analysis

Pricing

CreditCollections

Channel Controlling

FunctionalAccounting

Reporting

OPEX Mgmt

Commission Targets

VAT

GL Accounting

AP

Business Controls

Business Analytics

FY’05 FY’07 FY’08FY’06

Back-office Mid-office

DELL CONFIDENTIAL 10

Executive summary

OFFSHORING TO CENTRAL AND EASTERN EUROPE IS A KEY BUSINESS IMPROVEMENT LEVER

DELL IS A GOOD EXAMPLE OF MOVE OF KNOWLEDGE JOBS TO NEW LOCATIONS

CHALLENGES OF OFFSHORING ARE LARGELY EXAGGERATED

DELL CONFIDENTIAL 11

( )

Challenges of off-shoring are largely exaggerated

Activity spectrum and value

ONLY TRANSACTIONAL ACTIVITIES CAN BE OFFSHORED

SAVINGS EXPECTATIONS IN BUSINESS CASES ARE INFLATED

EASTERN EUROPE HAS PLATEAUED, THERE IS NO MORE VALUE TO BE EXTRACTED

SOURCE: MCKINSEY

Location

TALENT AVAILABILITY IS A MAJOR CONCERN

EVOLUTION OF COST LEVELS IS A MAJOR CONCERN

EASTERN EUROPEAN CENTERS END UP HAVING TOO MANY EXPATRIATES

Organization and operations

RAMP-UP SPEED IS USUALLY OVERESTIMATED

TRANSITION IS COMPLEX AND ERROR-PRONE

OFFSHORE CENTERS HAVE POOR PERFORMANCE

DELL CONFIDENTIAL 12

Productivity gap closing

PRODUCTIVITY IMPROVING

Revenue/head/quarter index, Bratislava FY06 = 100

Low cost 1 Low cost 2 Bratislava High Cost 3

147

135

100

204

Q4 FY06Consumer sales

97

141

134

197

Q4 FY07

High Cost 1 Bratislava High Cost 2 High Cost 3

53

100

130

159

Q4 FY06Business sales

94

114

156

172

Q4 FY07

DELL CONFIDENTIAL 13

Wage differences will persist

SOURCE: MCKINSEY

DELL CONFIDENTIAL 14

Executive summary

OFFSHORING TO CENTRAL AND EASTERN EUROPE IS A KEY BUSINESS IMPROVEMENT LEVER

DELL IS A GOOD EXAMPLE OF MOVE OF KNOWLEDGE JOBS TO NEW LOCATIONS

CHALLENGES OF OFFSHORING ARE LARGELY EXAGGERATED

WESTERN EUROPE LIVES OFF THE PAST – NEEDS TO DEVELOP NEW VALUE PROPOSITION FOR ATTRACTING BUSINESS

DELL CONFIDENTIAL 15

Future expansion options under consideration

2POLAND – CO-LOCATE WITH NEW FACTORY SITE? NEW GREEN-FIELD SITE?

SLOVAKIA – WHAT CAN THE LABOR POOL SUPPORT, EVEN IN OTHER CITIES?

1

EGYPT – A BRIDGE TOO FAR AT THIS POINT?5

HUNGARY – HOW WILL COSTS AND THE CURRENT POLITICAL TURMOIL EVOLVE?

3

ROMANIA – IS THE INFRASTRUCTURE & PUBLIC ADMINISTRATION UP TO STANDARDS?

4

In addition, continued

expansion of current sites in Morocco,

India

DELL CONFIDENTIAL 16

Executive summary

OFFSHORING TO CENTRAL AND EASTERN EUROPE IS A KEY BUSINESS IMPROVEMENT LEVER

DELL IS A GOOD EXAMPLE OF MOVE OF KNOWLEDGE JOBS TO NEW LOCATIONS

CHALLENGES OF OFFSHORING ARE LARGELY EXAGGERATED

WESTERN EUROPE LIVES OFF THE PAST – NEEDS TO DEVELOP NEW VALUE PROPOSITION FOR ATTRACTING BUSINESS