Dell EMC storage sales slump despite market assault

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Dell EMC storage sales slump despite market assault

Despite Dell EMC's massive storage push, Dell Technologies reported an 11 percent storage revenue decline for its fourth fiscal quarter, ended 28 February.

"We have work to do in storage," said Jeff Clarke, vice chairman, products and operations at Dell, during the company's earnings conference call on Thursday.

"We need to get it going and growing in the right direction… It is without question something [Dell CFO] Tom [Sweet] and I have tremendous focus on in the organisation to change the performance of our storage business."

The company reported storage revenues of US$4.2 billion for the quarter, down 11 percent year-on-year.

Dell's overall Infrastructure Solutions Group, which includes servers, networking and storage, grew 5 percent to US$8.8 billion.

Sweet said for the first time since the closure of its US$67 billion of EMC in 2016, Dell's storage demand grew year-over-year. "One of the drivers behind the variance between demand and reported results was due to differed revenue, primarily related to maintenance and our flexible consumption models," said Sweet. 

"We are encouraged that we exited the quarter with better storage velocity on a demand basis, and we expect a gradual recovery over the coming quarters as the actions and investments we put in place this year gain traction," he said.

Dell has been waging an all-out assault on the storage market over the past 14 months, investing more than US$2 billion, hiring 1200 new storage sales specialist and creating new channel storage sales quotas for the first time.

The company has also launched a Future-Proof Storage Loyalty Program for partners, which includes a customer three-year, satisfaction guarantee; trade-in credits toward new Dell EMC storage products; a storage efficiency guarantee; and one year of built-in Virtustream Storage Cloud for new buyers of Dell EMC Unity storage products. Most recently, Dell created a Centre of Competence around storage management aimed at getting more competitive and faster pricing out to partners.  

"We built our plan in fiscal year 2019 as a 'take share' plan. As a growth plan," said Clarke, during Thursday's earnings call. "We've set the tone in the organisation that we are expecting to grow in the external storage business and take share."

According to third-quarter storage data from research firm IDC, Dell EMC was the market leader for external storage systems sales with US$1.6 billion.

In regards to its US$2.2 billion in total enterprise storage systems sales, Dell EMC trailed only behind Hewlett Packard Enterprise, which generated US$2.4 billion in the quarter, according to IDC.

The news comes as Dell EMC leapfrogged Hewlett Packard Enterprise in worldwide server revenue in the fourth quarter of 2017, while also consolidating its lead over HPE in terms of server shipments.

For Dell's overall fourth fiscal quarter, the company reported revenue of US$21.9 billion, up 9 percent year-over-year. VMware revenue for the quarter hit US$2.3 billion, an annual increase of 20 percent. Dell's other businesses, including Pivotal, RSA, SecureWorks and Virtustream, captured a total of US$492 million in revenue, up 3 percent from the year-ago quarter.

This article originally appeared at crn.com

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