Dell Sees Jump in Server, Networking Sales in Q4
The numbers, which offset continued weakness in PCs and mobile devices, are encouraging signs in Dell’s efforts to be an IT solutions provider.Dell is beginning to show gains in its efforts to move away from a contracting PC market and become more of an enterprise solutions provider, a transformation that Dell executives hope to accelerate with their $24.4 billion plan to take the company private. The world’s third-largest PC maker saw revenues fall 11 percent in the company’s fiscal fourth quarter—to $14.1 billion—over the same period in 2011. Profits during the three months also declined 31 percent, to $530 million. However, the revenue numbers still exceeded analyst estimates, and while some business units showed expected decline—desktop PC revenues fell 14 percent, mobility revenues, including notebooks, declined 25 percent, and the consumer business saw revenues drop by 24 percent—there were notable gains in areas that Dell is actively courting. In particular, Dell’s server and networking sales ramped up 18 percent over the same period in 2011, hitting $2.62 billion, the company said Feb. 19. Revenues connected to Dell’s Force10 Network business—the company bought Force10 in 2011—grew 100 percent, according to Brian Gladden, Dell’s senior vice president and chief financial officer.
Individually, server revenue grew 5 percent, and the company’s 12th-generation PowerEdge servers now account for 80 percent of all PowerEdge systems being sold. Gladden said the company is seeing particular strength in hyperscale data center environments. Dell’s networking business saw sales rise 42 percent, and the company’s Quest software unit exceeded its revenue target of $180 million to $200 million.