Dell's Enterprise Unit Drove Largest Single-Year Revenue Increase in FY 2011
Dell enjoyed the largest single-year revenue increase in the company's history during its fiscal year 2011 fourth quarter, it announced Feb. 15, with the company's enterprise unit delivering the lion's share of the revenue and profit growth.
Dell reported a profit of $927 million during the quarter, on revenue of $15.7 billion. While Dell has recently been moving deeper into the consumer mobile device market, it is the company's enterprise assets that continue to secure its bottom line.
Its profit for all of fiscal year 2011 was $2.6 billion, on revenue of $61.5 billion. Revenue for its large enterprise unit grew by 26 percent sequentially, and its small and medium business unit saw record profitability, up 12 percent during the quarter. Its consumer unit, however, was up 11 percent during the quarter, though down 8 percent year-over-year, which the company attributed to last year's particularly strong results, following Microsoft's Windows 7 launch.
"Our consumer business was modestly profitable at 2 percent," Dell Chief Financial Officer Brian Gladden said during a call with media and analysts. In a statement released before the call, Gladden said that Dell is "pleased with the sustainable operational improvements we've made across the company, including in our consumer business."
In November, the media shone a spotlight on Dell's stumbles in the consumer space, after a company restructuring reportedly led to the resignation of Ron Garriques-an executive Dell had hired from Motorola and tasked with strengthening its consumer image and product line.
Garriques was on board, for example, during the launch of Dell's first tablet, the Streak, which featured a 5-inch display-a size that proved unpopular, as critics generally found it small for a tablet, but large for a smartphone. In industry parlance, it received a thumbs down for "pocketability."
Dell recently introduced its Venue and Venue Pro smartphones, and said during the call that it will enter the 10-inch tablet space later this year with a device running Google's tablet-savvy version of Android, 3.0, or "Honeycomb." The company officially tipped its hand about the tablet at a press event Feb. 8, though it gave no real details beyond the OS and screen size.
The company's focus during the last quarter was more intensely on building out its enterprise portfolio, Dell CEO Michael Dell said during the call. Expanding its solutions and services portfolio, Dell recently acquired SecureWorks, a provider of information-security services; Boomi, a software-as-a-service platform for exchanging data between cloud-based and on-premises applications; and Insite One, a provider of cloud-based medical archiving solutions.
Dell said that the company is "narrowing its focus" on three broad areas that it "has to win": computing; data center and information management; and services and all things cloud.
"If FY11 was largely about getting operationally fit, then FY12 is going to be about leveraging this division of health and strength to move more aggressively and accelerate our transformation as a services and solutions company," Dell said. "Customers are now seeing Dell in a fresh light. We're heading into the new year with strength and optimism."