Dell will focus on its strategy to strengthen presence in enterprise solutions business in order to better long-term growth.
“Through strategic acquisitions and organic growth, we are creating innovative solutions that provide more value and competitive edge for our customers. By doing so, we are also creating long-term value and growth for our company and for our stockholders,” Michael Dell, chairman and CEO, told stockholders.
Dell and Brian Gladden, Dell CFO, outlined the steps taken by the company to establish Dell as a full-service solutions company, and how the company’s business has shifted, with enterprise solutions and services accounting for 50 percent of its gross margin in the first quarter of fiscal year 2013.
Among those actions was the formation earlier this year of a Software Group to add to Dell’s enterprise solutions capability, accelerate strategic growth and further differentiate the company from competitors with standards-based, scalable and flexible Dell-owned intellectual property.
Dell is building its software portfolio in part through strategic acquisitions. Recently, Dell announced its plans to buy Quest Software, a IT management software provider. The Quest acquisition is expected to be completed in Dell’s fiscal third quarter. Dell has made eight acquisitions in the last 12 months and 16 in the past two years.
“We continue to be keenly focused on driving shareholder return. The key to our success is growing enterprise solutions, services and software (ESS&S) at a rate faster than the market. Our steady growth in the percentage of revenue from ESS&S over the past three years has improved gross margins and driven strong cash flow,” Gladden said.
“We remain committed to increasing the return of capital to shareholders. We are reinvesting in the company in research and development, capital expenditures and acquisitions while maintaining an ongoing share repurchase program and, now, providing for the payment of a quarterly cash dividend to Dell’s shareholders,” Gladden said.