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Dell: Fiscal 4Q17 Financial Results

Off course, adding EMC boosts hugely storage revenue.

Storage revenue of Dell

(in $ million) 4Q16 4Q17 FY16 FY17
Revenue 562 4,783 2,217 8,942
Growth   751%   303%

Dell, Inc. reported financial results for 4FQ17 ended February 3, 2017.

It’s not easy to compare the evolution of Dell in storage following its EMC acquisition.

The company announced revenue of $8,942 million – including EMC – up 303% from FY16. That’s a huge increased but storage revenue of EMC for FY ended in December 2015 was much more: $16 billion.

Maybe here is part of an explanation by David Goulden, president of infrastructure solutions group: “As a reminder, the change in the legacy EMC fiscal year from December to January along with our focus on working capital efficiency has caused a change in backlog, especially at the end of the calendar quarter. And this change will also result in a change in sales linearity, particularly in the first calendar quarter of 2017.”

Also, for the quarterly reports, results prior 3FQ17 do not include EMC.

For most recent Dell’s three-month period, the Y/Y growth for storage is even higher, 751%, at $4,8 million, but 4FQ16 does not include EMC and 4FQ17 includes EMC.

For last quarter, Dell’s infrastructure solutions group generated $8.4 billion of revenue, which includes $3.6 billion in servers and networking, $4.8 billion in storage, and an operating income of $1 billion.

Al-flash array Q4 demand grew almost 100% to a $4 billion run rate and nearly $400 million for VxRail hyper-converged infrastructure. Dell EMC XC web-scale converged appliance demand grew triple digits Y/Y.

We believe we are nearly the size of the three next competitors combined as we continue to capture the market shift to all-flash,” according to the firm. “In converged infrastructure, our Vblock integrated infrastructure business also had its largest quarter ever with demand growing high-single-digits on a calendar basis. We remain the industry leader with well over 50% market share, as customers continue to look to us to make infrastructure easier while using best-of-breed products.  (…) Hyperconverged solutions have been a major growth initiative this year, and with the strength of our Dell EMC XC, VxRack and VxRail portfolio, we believe we are now the market leader on a calendar Q4 demand basis with strong triple digit growth. (…) Within our appliance offerings, the demand for our Dell EMC XC solution grew triple digits as customer engagement remained strong. Our VxRail offering is seeing significant growth and ended the year on a nearly $400 million demand run rate basis, only 10 months after the product was introduced. The rapid growth is driven by customer demand for a fully integrated solution optimized for VMware environments. We expect the momentum to continue in Q1 with the introduction of our Enterprise Hybrid Cloud on VxRail and global availability of PowerEdge inside VxRail. Also within our hyperconverged portfolio, our VxRack solutions continue to gain traction in larger environments as we create a new category for data center scale hyperconverged infrastructure.”

The company added: “In our ISG business, we exited the year with leading share positions in server units and storage revenue. Additionally, we are also number one in revenue share in converged infrastructure, all-flash arrays and purpose-built backup appliances. (…) but we did see softness in traditional external storage arrays.

No more information on traditional storage businesses, probably much less impressive, were officially revealed by Dell.

Dell’s fiscal yearly storage revenue*

(in $ million) FY11 FY12 FY13 FY14 FY15 FY16 FY17
Revenue 2,295 1,943 1,699 1,518 1,437 2,217 8,942
Growth 5% -15% -13% -9% -9% 54% 303%

 * ended in January, FY including EMC

To read the earnings call transcript

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