Dell Tech­nolo­gies

Rev­enue and profit mo­men­tum im­proved through­out the year while nav­i­gat­ing a chal­leng­ing com­po­nent cost en­vi­ron­ment

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Dell Tech­nolo­gies had a re­ward­ing 2018. The FY’18 con­sol­i­dated GAAP re­sults showed 28 per­cent growth over 2017, de­liv­er­ing US$78,660 mil­lion, against US$ 61,642 mil­lion in 2017. The FY’18 con­sol­i­dated non-GAAP re­sults had a sim­i­lar story. FY’18 de­liv­ered US$79,929 mil­lion, against US$ 62,822 mil­lion in 2017, a growth of 27 per­cent. Its In­dian rev­enue for 2018-2019 is es­ti­mated at ap­prox USD 2,600 Mn. There was strong top-line ve­loc­ity all year, de­liv­er­ing ~$80B in rev­enue. Rev­enue and profit mo­men­tum im­proved through­out the year while nav­i­gat­ing a chal­leng­ing com­po­nent cost en­vi­ron­ment.

Ex­ter­nal feed­back re­gard­ing the in­te­gra­tion has been pos­i­tive. A sur­vey con­ducted by IDC found that 91% of cus­tomers felt that Dell and EMC have de­liv­ered on the pre-merger promises. It also in­creased the global cov­er­age by in­vest­ing sig­nif­i­cantly in the sales team and chan­nel pro­gram.

The In­fra­struc­ture So­lu­tions Group (ISG) rev­enue growth was driven by servers and net­work­ing. Servers and net­work­ing rev­enue was up 27% Y/Y. Stor­age rev­enue was down 11% Y/Y. The OpInc per­cent­age de­clined 350 bps over the prior year, pri­mar­ily due to a higher mix of servers and to a lesser ex­tent, higher com­po­nent costs.

As for the ISG Group, Dell EMC and VMware were named lead­ers in the first-ever Gart­ner Magic Quad­rant for Hyper­con­verged In­fra­struc­ture. Gart­ner ranked both Dell EMC and VMware highly in the 2018 Magic Quad­rant for HCI, po­si­tion­ing both Dell EMC’s VxRail ap­pli­ance and VxRack rackscale sys­tem as well as VMware’s vSAN soft­ware as lead­ers in the cat­e­gory.

Dell EMC also ex­panded the server ca­pa­bil­i­ties for soft­ware-de­fined, edge and high-per­for­mance com­put­ing. It ex­panded the 14th gen­er­a­tion of the Dell EMC Pow­erEdge port­fo­lio with three new servers – the Pow­erEdge R6415, R7415 and R7425 – with ca­pa­bil­i­ties to address the de­mand­ing work­load re­quire­ments of to­day’s mod­ern data cen­ter, in­clud­ing soft­ware-de­fined, edge and high-per­for­mance com­put­ing.

Dell EMC also an­nounced the ex­pan­sion of its mar­ket-lead­ing con­verged in­fra­struc­ture port­fo­lio. Dell EMC un­veiled the next-gen­er­a­tion Dell EMC VxBlock Sys­tem 1000, an all-in-one sys­tem de­signed to sup­port work­loads of all types that in­cludes a sub­stan­tially broader choice of world class stor­age ar­rays, data pro­tec­tion and com­pute than pre­vi­ous-gen­er­a­tion VxBlock Sys­tems.

As for the Client So­lu­tions Group ( CSG) per­for­mance, the com­mer­cial rev­enue was up 9% Y/Y due to ASP ex­pan­sion for note­books and work­sta­tions, as well as dou­ble-digit rev­enue growth in dis­plays. The con­sumer rev­enue grew 6% Y/Y, driven by growth in ASPs for note­books and XPS prod­ucts. OpInc was up 70% Y/Y as the team did a good job off­set­ting com­po­nent cost head­winds through repric­ing and also fo­cused on at­tach­ing higher-mar­gin ser­vices and S&P.

For FY’19, the com­pany in­tends to grow above the mar­ket and drive share gains, with a par­tic­u­lar fo­cus on stor­age and client. It will look to gen­er­ate strong cash flow and de-lever the bal­ance sheet. It will look to drive prof­itabil­ity in ISG as it bal­ances server ve­loc­ity and prof­itabil­ity, and ac­cel­er­ate stor­age and data pro­tec­tion ve­loc­ity.

—ALOK OHRIE Pres­i­dent & MD, Dell Tech­nolo­gies

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