Dell devices business shines though total revenue dips 2.7% to $22.7 bn

Dell Technologies said its revenue slid 2.7 percent in second quarter to $22.73 billion from a year earlier.
Dell Latitude 9510 business PC
Jeff Clarke, vice chairman and chief operating officer, Dell Technologies, said: “In Q2, we saw strength in the government sector and in education, with orders up 16 and 24 percent, respectively, as parents, teachers and school districts prepare for a new frontier in virtual learning.”

Revenue from the company’s biggest segment that includes desktop PCs, notebooks and tablets fell 4.6 percent to $11.20 billion. Within Client Solutions Group, consumer revenue was $3.2 billion (+18 percent), while commercial client revenue was $8 billion (–11 percent).

Dell Technologies said it outperformed in its consumer business fuelled by consumer direct business that was up 56 percent based on orders. Dell’s consumer direct online business grew 79 percent based on orders.

Dell achieved strong double-digit growth across all consumer notebooks and gaming systems driven by premium XPS and Alienware brands, which were up 25 percent on orders basis. Order for Dell notebook was up 8 percent driven by growth in consumer and commercial notebook needs at home and for remote work and learning.

Revenue from Dell’s data center sales dropped 4.8 percent to $8.21 billion as companies directed their spending towards remote work. Within Infrastructure Solutions Group, storage revenue was $4 billion, while servers and networking revenue was $4.2 billion.

Dell said it achieved double-digit orders growth for data protection and VxRail in the second fiscal quarter and mid-single-digit orders growth for high-end storage.

Its software unit VMware, which has directly benefited from the shift to cloud, posted a 9.7 percent rise in revenue to $2.91 billion. Dell said in July it was planning to spin off its 81 percent stake in the unit.

The success in VMware business was due to the depth and breadth of portfolio and direct and channel coverage model of the entire IT market.

Dell’s VMware business said demand from government was strong, while education demand ramped, with orders up double digits for both verticals. Small and medium business demand improved as businesses opened back up once government restrictions were lifted.

The COVID-19 pandemic has led to a rapid shift to cloud, spurring demand for products that allow organizations to carry on, even as millions of people around the globe work from home to stay safe, and schools to hold virtual classes.

Orders for Dell from the education sector jumped 24 percent in the second quarter ended July 31, and government orders rose 16 percent.

The company also saw an uptick in demand for its gaming systems, including Alienware as more people turned to gaming during stay-at-home orders.