Dell Q1 revenues up but servers and storage sales are down

Dell posted $21.9bn revenues for the first fiscal 2020 quarter up three per cent on last year, and net income $329m (-$538m). However storage revenues fell a little and server revenues fell a lot.

Revenue falls were in Dell’s Infrastructure Solutions Group (ISG) where revenue for the first quarter was $8.2bn, 5 per cent down year-over-year. The company reported a 9 per cent decline in server and networking revenue to $4.2bn. There was also a 1 per cent decline in storage revenue to $4.bn.

These results brought Dell’s servers and storage revenues closer together:

The other parts of Dell’s empire did much better:

  • Client Solutions Group revenue for the first quarter was $10.9bn, up 6 per cent
    • Commercial revenue grew 13 per cent to $8.3bn
    • Consumer revenue was down 10 per cent to $2.6bn
  • VMware revenue was $2.3bn for the first quarter, up 13 per cent, with profits of $505m, down 46.4 per cent from last year’s $942m.

Dell attributed the ISG performance to lower-than-anticipated industry demand, principally in China, and certain large enterprise opportunities. In both, Dell walked away from deals that required heavy discounting to win the bids .

Storage focus

Storage demand remained solid but revenue was down due to an order backlog.

Dell said it has had four consecutive quarters of storage share gains. It said it is the leader in storage software with 14.9 per cent share, the number one all-flash array provider with 27.9 per cent share, and number one HCI provider with a 28.6 per cent share. VxRail revenues grew by triple digits.

It doesn’t yet know if it grew server share in the quarter, waiting on IDC numbers, but it was leader in units and revenue, and thinks it grew market share.

The company anticipated storage sales will rise still further when the new unified mid-range products arrive by the end of the year.

Storage supplier comparison

We can compare Dell’s quarterly storage revenue history with other suppliers’ storage-only revenues.

Supplier quarters normalised to HPE’s.

Dell EMC is the clear top storage supplier, followed by Western Digital, then Seagate. The top three are trailed by NetApp and ten HPE. Below them in our chart are a pack of other suppliers such as IBM (storage hardware only), Nutanix, Commvault and Pure Storage.

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