M+E Connections

Dell EMC President: Cloud, ‘Software-Defined Everything’ are Driving Server Growth Now

The cloud, as well as software-defined storage and networking, are the main forces driving server growth today, according to Dell EMC President David Goulden.

“The cloud, both public and private, is a very big driver of server growth these days,” he said Dec. 8, during the Dell Technologies earnings call for the third quarter, ended Oct. 28. It was the company’s first quarter of combined company results after the recent merger of Dell and EMC Corp. to form Dell Technologies.

Goulden went on to say: “We see software-defined everything driving server growth” as well, including software-defined storage and software-defined networking. “We see some growth opportunities there. And also [in] things like security,” with factors including big data driving growth in that area, he said.

He added: “We do see a shift going on” and “I think we’re actually now better-positioned to lead into that shift than we were before” the merger.
Third-quarter Dell Technologies revenue grew 28% to $16.2 billion from $12.7 billion a year ago. But its loss from continuing operations widened to $1.6 billion from $264 million.

The consolidated results of Dell Technologies include 52 days of results from EMC and VMware (which had been owned by EMC prior to the merger), from Sept. 7, the close of the merger, through Oct. 28, the end of the quarter.

Performance in the company’s Infrastructure Solutions Group was mixed in the quarter, with revenue of about $6 billion and operating income of $897 million. Dell saw strong growth in its all-flash portfolio and Enterprise Hybrid Cloud solutions, as well as strong performance in its hyper-converged infrastructure portfolio, including triple-digit year-over-year revenue growth for XC hyper-converged infrastructure products, it said. But Dell experienced softness in standalone hybrid storage arrays and servers.

The company’s Client Solutions Group outgrew the industry in both the consumer and commercial sectors, with business revenue for the quarter growing 3% from a year ago to $9.2 billion. Operating income in that division, for the quarter, was $634 million. Dell saw the fastest growth among the top three vendors, with the company experiencing its 15th-straight quarter of year-over-year PC unit growth and 160 basis points of unit share gained, it said, citing IDC data.

Dell was tied at No. 1 in workstations unit share globally, the manufacturer said, but didn’t specify what company it was tied with. Dell also had a No. 1 share position worldwide in displays, gaining unit share year-over-year for the 14th consecutive quarter, it said.

VMware revenue during the 52-day operations period from the close of the EMC merger through Oct. 28 was $1.3 billion, and that division had an operating income of $548 million.

Dell launched 14 new products in the quarter, including Dell EMC’s VxRail and VxRack hyper-converged infrastructure solutions using PowerEdge servers. The company also shipped its first integrated solution – the ScaleIO Ready Node – less than 30 days after the close of the EMC transaction, it said. The company’s shares were up 0.76% at $54.31 in morning trading after the earnings call.