Dell Technologies has posted a strong quarter, with remote work driving up client systems and VMware revenues but servers and storage experienced declines. But it’s impatient for PowerStore sales to ramp up and solve its mid-range storage problem.
Dell’s storage sales in the third quarter ended October 30 were flat at $3.9bn, while group revenues grew three per cent to $23.5bn.
In the earnings call yesterday COO Jeff Clarke said: “Storage demand was mixed, we were pleased with our relative performance given current market dynamics.”
In the third quarter there was continued strong demand for VxRail and PowerMax products, with double-digit orders growth in both for the third straight quarter. Dell EMC retained top position with 27.9 per cent market revenue share, according to IDC. PowerEdge server orders were up single digits sequentially.
Dell claims the leading market share in external enterprise storage, storage software, all-flash arrays, purpose-built backup appliance, converged systems, as well as server units, all according to IDC.
CFO Tom Sweet said in the earnings call that although PowerMax and HCI did well the company “continued to see softness in other areas of core storage, including midrange.” That’s where the new PowerStore, launched in May, is positioned.
Clarke added: “PowerStore is so important for us, getting our mid-range trajectory on a take-share trajectory, which quite frankly it’s not with our performance.”
Dell’s results presentation noted “PowerStore is trending in the right direction and we expect it to ramp through the rest of this year and into FY22.”
Clarke said: “We delivered nearly double the [PowerStore] orders revenue achieved in the second quarter, albeit on a small base, we are still early in the ramp. … more than 15 per cent of the PowerStore customers are new storage buyers. We feel great about the future of PowerStore and our storage leadership.”
Clare said PowerStore in its first three quarters is ahead of XtremIO and VxRail in their equivalent ramps. Also the number of competitive takeouts Dell had in Q3 over Q2 with PowerStore nearly doubled.
Clarke added: “We expect it to continue to ramp in Q4 and all through next year and that ramp is the key to our success in growing our storage business as we have strong success in the above -$2,050 segments and has actually taken share there.”
Midrange share shrink
Answering a question about possible storage mis-execution, Clarke denied it had happened but admitted: “Our midrange is shrinking. I think we’ve mentioned that each of the previous three quarters this year. And it’s why PowerStore is important. PowerStore is the catalyst. I think we’ve said this for the past couple of years in anticipation of the product. It is the catalyst for us to change our share trajectory in the midrange, which is the single largest segment in storage, that’s why it’s important.”
He said he and Sweet “are impatient with the team. We want to see a more accelerated ramp.”
Pure Storage CFO Kevan Krysler said yesterday: “We’re just not seeing PowerStore. I mean, the little we’re seeing of it is not being terribly successful.“