Texas-based computer technology giant Dell became the largest merchant to join the bitcoin ecosystem late last week when it announced a partnership with Coinbase and launched a 10% discount for bitcoin customers.
The news was greeted with applause by the bitcoin ecosystem and proliferated widely through the mainstream media given Dell’s strong brand recognition and status as an early success story from the PC computing era.
Now, speaking to CoinDesk in a new interview, Paul Walsh, CIO of Dell Commerce Services, has provided more insight into his company’s decision to begin accepting bitcoin payments, a first of what he acknowledged could become his company’s more extensive involvement in the space.
Perhaps most notably, Walsh indicated that Dell doesn’t consider itself to be an early adopter of bitcoin. Rather, he suggested that Dell believes merchants are already broadly moving toward accepting digital currency as a payment option, and that the decision simply finds Dell keeping pace with the times and the needs of its existing customers.
Walsh told CoinDesk:
“We’ve got to ensure we know where the market is going and what’s happening everywhere. We have regular communication with our customers, we understand exactly what they’re looking for [and] where they may have friction in their path, we look to see if there are any big innovations that would benefit our customers.”
Dell became the largest public company to go private last year when original founder Michael Dell closed a $25bn deal to regain its leadership.
According to the company’s last public filing, it earned $56.9bn in 2013, with the largest gain in revenue increase in its enterprise solutions and services business.
Improving customer service
For now, Walsh said the company’s main goal for its bitcoin program will be to remove friction during the customer purchasing process and make it easier for its existing customer base to transact with Dell.
Walsh suggested that Dell believes many of its existing customers already use bitcoin, and that the partnership with Coinbase simply allows the company to better serve these customers.
“I think that customer feedback was one of the reasons we started doing it. That to me says that our existing customers have been using bitcoin, so we want to make sure we’re satisfying those,” Walsh said.
His comments also suggest that Dell believes bitcoin to be a payment method on par with other, more widely used tools, as he added:
“We provide whatever payment offerings you need, whether it be your credit card or PayPal and now with bitcoin, we’re just trying to answer to customer demand.”
Extending services globally
Embracing a similar model as online travel booking giant Expedia and electronics retailer TigerDirect, Walsh confirmed Dell will initially trial bitcoin payments with only US-based customers.
However, Walsh suggested that his company is open to expanding the program, though he did not provide details about any proposals that may be in the works or what metrics Dell will evaluate before coming to this decision.
Walsh explained:
“We wanted to start up with the US base, and from that, we’ll see where we wanted to move next. The big thing here is being able to be a lot more agile in terms of addressing our customers’ needs.”
Emphasizing innovation
Walsh also framed the decision as one that would help return Dell to its roots as an innovator in technology. Throughout the conversation, Walsh emphasized how it is prioritizing innovation, and how bitcoin simply provided the latest way that Dell can show its dedication.
Walsh said:
“The first thing to provide a payment method for our business and bitcoin is a great example of how we can show some innovation. We’re always going to be looking for new, innovative ways to ensure we’re driving the right experience.”
In recent years, the company has come under fire in the mainstream financial press for failing to adjust to the decline of PC sales that has resulted from increased smartphone use.
Possibilities ahead
While Walsh gave the impression that Dell is primarily focused on bitcoin as a payments play, the company may be uniquely positioned to exploit other potential market opportunities in the space.
For example, Dell has a professional Data Center Solutions team currently working on cloud computing and optimizing hyperscale data centers, tools that could no doubt position Dell to enter or serve the now booming industrial bitcoin mining space.
Still, while Dell could have an evident competitive advantage in the space, Walsh suggested the idea is not currently on the company’s radar, saying:
“We’re familiar with [bitcoin mining]. It’s not something we’re looking at at this time, but we are familiar with it.”
Notably, Dell recently decided to shelve plans to build additional data centers in Europe, choosing instead to focus on data center management.
The company had earlier planned to purchase $1bn worth of data centers as recently as 2011.
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