Dell: Fiscal 4Q20 Financial Results

For storage only

Dell Technologies, Inc. announces financial results for its fiscal 2020 fourth quarter and full year ended January 31, 2020.

For FY20 global revenue was $92.2 billion, up 2%, 4FQ20 revenue was $24.0 billion, up 1%, and non-GAAP revenue was $24.1 billion, up 1%, over 4FQ19.

Infrastructure Solutions Group or ISG revenue was $8.8 billion, down 11%.

Storage revenue was $4.5 billion, down 3%, with double-digit demand growth in HCI, offset by softness in core storage.

Servers and networking revenue was $4.3 billion, down 19%, due in large part to a soft market, particularly in China and in certain large enterprise customers in USA. and Europe. ISG operating income was $1.1 billion or 12.7% of revenue.

Being the ≠3 in the WW storage market, Dell said its maintained its ≠1 position in storage software with 14.8% market share, external enterprise storage with 31.5%, AFAs with 33.4% and HCI with 35.1%.

Jeffrey Clarke, vice-chairman and COO, commented: “Shifting to storage. Roughly 2.5 years ago, we began to take actions to stabilize the business and lay the foundation for growth. We have reclaimed over 300 basis points of share since 2017. One action, we have invested approximately $1 billion on a run rate basis into sales, coverage, capacity and marketing, including critical investment in storage specialists. This year, these specialists will reach full productivity. Earlier this month, we combined into one sales organization, and we will realize the next level of synergies and cross-sell opportunities, like selling more storage and data protection to our server customers.“

“We have made considerable progress simplifying our storage portfolio, moving from over 80 products 2 years ago to roughly 20 today, including our new mid-range storage solution being evaluated now by dozens of customers. And by Dell Technology World in May, we will have refreshed our entire storage product lineup under the Power brand, completing a 2.5-year journey of modernizing our entire ISG portfolio. We have never been more competitive from top to bottom. We are planning to grow FY21 storage revenue at a premium to the market with growth strongest in HCI, followed by core storage and data protection,” he added.

“Two weeks ago, we stood up in front of the entire sales force, we trained them on the Midrange.NEXT platform. They’re excited about it and we will begin selling the product before the end of 1FQ21, and there is no material impact to our revenue plans in storage or the mid-range. We’re actually quite excited. When we think about the mid-range, CY20 storage forecast is actually slightly down. But the mid-range is expected to grow about 4.5%,” he continued. “We have invested a lot in capacity and coverage. That capacity and coverage is increasingly more tenured. We’d head into FY21 with the most tenured productive capacity we’ve had in our storage sellers, period. You couple that with the completeness of the product portfolio or if you prefer the overhaul of the product portfolio that we spent the last 2.5 years modernizing that stack. It’s completed by mid-year. So our belief is, and why it’s part of the gain share plan in storage is a modern competitive portfolio, best-in-class in many areas with the most tenured sales force that we have in storage. That’s our growth plan.”

Thomas Sweet, EVP and CFO, also commented: “Just that as we look at the opportunity to cross sell and the synergy opportunity there between our server buyers and those buyers that buy storage, it’s roughly a 3:1 ratio or something like that of servers to storage. There’s an opportunity there to cross sell with the more tenured sales organization with the coverage expansion that we’re driving. I think we’re – feel good about the opportunity to go mine that customer base and expand the customer base for storage. I think that’s the other thing that, as we think our way through what’s different about FY20 versus FY21, that’s going to be important for the folks on the phone to think about.”

The huge IT firm has 30,000 server customers every quarter, and only half of them buy storage from the company.

Storage revenue of Dell

* Without EMC
**without  EMC for 1FQ17 and 2FQ17 following acquisition for $63 billion

Earnings call result