Dell: Fiscal 2Q11 Financial Results

For storage only

(in US$ millions)	2Q109	2Q11	6 mo. 10	6 mo. 11
Revenues	551	624	1,085	1,178
*Growth*		13%		9%

Dell, Inc. reported its financial results for its fiscal second-quarter 2010 ending in July 31, 2009.

Storage revenue improved 13% from 2Q10 to 211 led by EqualLogic, which grew 63%. It continues to represent 4% of HP’s total revenues.

For small and medium business, storage sales increased 22%.

Dell has three main storage lines: PowerVault, EMC and EqualLogic, all together increasing yearly by 13% on a quarterly basis. If the growth for the period is 14% for PowerVault and 63% by EquaLogic, it means that the EMC products (CLARiiON, Data Domain, etc) is the less successful of the three lines. And this trend will continue in the future following the acquisition of 3par.

Comments

Abstracts of the earnings call transcript:

Steve Schuckenbrock, president, large enterprise:
"Storage was up 14%, and we had a significantly improved profitability, as customers continued to adopt our EqualLogic solutions.
"As a whole, our storage was up 13% to $624 million. More importantly, our storage product mix continues to drive improved operating margins. EqualLogic and PowerVault led revenue growth up 63% and 14% respectively. We continue to see adoption of EqualLogic across a wide array of customers, small, medium and large. And EqualLogic scales very well through all of those needs."

Michael Dell, chairman and CEO:
"EqualLogic continues to gain momentum and experience wider adoption, delivering over $1 billion in revenue since the acquisition and about $800 million this year.
"The EMC relationship continues. And as we pointed out earlier this week, about 80% of the Dell-EMC relationship fits into the lower end CLARiiON CX-120 product, the AX product, the NAS products and data domain, which are really products that we today do not have similar offerings for. And so there is a strong relationship there that I think will continue for some time. Certainly, there will be places where we choose to partner and places where we choose to compete. But we also see with this proposed 3PAR acquisition a great opportunity to grow the high end of our storage portfolio and continue to make this rapidly growing part of Dell’s overall business.
"The gross margin dollars in storage are up on a year-over-year basis almost as much as the EqualLogic revenues were up."

Brian Gladden, CFO:
"About a year ago, we really changed the focus in our storage business from being a pure reseller to being a real storage business that brings not only our own IP, but IP from our partner EMC through an OEM lens as opposed to just as a pure reseller. And so that’s impacted the revenue line. But what you are seeing is a significant increase in the overall margin execution in our business."