Dell merges server and storage teams

Dell has combined its server and storage teams in response to a slowdown in enterprise sales in North America and China.

Speaking in a Dell Q4 earnings call, COO Jeff Clarke said: “Earlier this month, we combined into one sales organization, and we will realise the next level of synergies and cross-sell opportunities, like selling more storage and data protection to our server customers… go mine that customer base and expand the customer base for storage.”

The company thinks there are plenty of opportunities to tap. “We have roughly 30,000 server customers a quarter and less than half buy our storage”, Clarke said. “The server component of that buyer base is modestly growing and the storage one isn’t. That has been our challenge.”

Dell Technologies revenue growth slowed in the fourth fiscal 2020 quarter, as surging PC sales offset declining server and storage sales. The company attributed the latter to US and Chinese enterprises buying less. But it had its first profitable year since fy2013, partly because it stopped chasing unprofitable server deals in a declining market.

Q4 revenues were $24 billion, up 0.7 percent, and net income come was $416 million compared to a loss of $287 million a year ago. Full fy2020 revenues were $92.2 billion, up a per cent over fy2019, with $5.5 billion net income contrasting with fy2019’s loss of $2.18 billion. Dell shares declined 5.2 percent in trading hours and 3.6 percent in after-hours trading.

CFO Tom Sweet said: “We delivered full year net income of $5.5 billion and adjusted EBITDA of $11.8 billion in fiscal 2020. I’m pleased with our profitability and remain committed to maximizing Dell Technologies’ equity value for all aligned shareholders.”

Full year profits were given a big boost by an income tax provision in Q2 fy2020, resulting in a $4.5 billion net income for that quarter. But every fy2020 quarter has been profitable, unlike fy ’19 and fy ’18 when every quarter was unprofitable.