Dell Sings EMC Song

Dell posts record storage results, boosted by sales of EMC's Clariion. Can they keep it up?

February 15, 2003

2 Min Read
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Dell Computer Corp. (Nasdaq: DELL) continues to defy the technology industry slowdown, posting its best-ever quarterly product shipments, revenue and operating profit, driven significantly higher by storage sales, the company says (see Dell Breaks Q4 Revenue Record).

Dell yesterday reported a profit of $603 million, or 23 cents a share, for the quarter ended Jan. 31, 2003. In the same quarter a year ago, it earned $456 million, or 17 cents a share. The company's overall revenues rose 21 percent to $9.74 billion, compared with $8.06 billion a year earlier.

For Byte and Switch readers interested in Dell's long-term storage goals, the company appears to be right on track: Its external storage sales for the quarter grew to $300 million, up 87 percent year-over-year (after a 73 percent year-over-year increase in Q3 2002) and 15 percent sequentially.

The PC giant claims to have won more than 1,000 new storage customers through its partnership with EMC Corp. (NYSE: EMC) during the quarter, for a total of 2,500 joint customers over the year (see EMC and Dell Double-Down).

New customers won in the fourth quarter include: the Tribune Co., Select Comfort, Alaska Communications, Benelogic, The Bombay Company, Computer Sciences CSC Ltd., Cox Communications, Mercedes Benz, Reckitt Benckiser, United States Military Academy, West Point, University at Buffalo/The State University of New York, and Warburg Dillon Read (see Rackspace Picks Dell/EMC, Dell/EMC Roll Up Chicago Trib, Dell, EMC Get Bed Rest, and Benelogic Selects Dell, EMC).Bear Stearns & Co. Inc. analyst Andy Neff says in an investor note today that the largest strategic issue for Dell in 2003 is its intensifying battle with Hewlett-Packard Co. (NYSE: HPQ). He says the resultant market share shifts, and impact on profitability, will depend on Dell's success at scaling into the enterprise through its sizeable growth opportunities in what Neff calls the four S's: servers, storage, services, and switches.

Digging into Dell's storage results for the quarter, a company spokeswoman says it shipped 97 percent more NAS capacity year-over-year, while sales of the midrange PowerVault 770 and 775 had the largest quarter ever. "We refreshed this product line in the second half of last year, which boosted sales," she says. Education and government agencies were the biggest purchasers of this technology for storage consolidation projects, she adds (see Dell Restocks NAS Line).

EMC also reported a record quarter for Clariion sales last month. For its fourth quarter, ended Dec. 31, 2002, EMC says it sold approximately $200 million worth of Clariion hardware and software. It's worth noting that about a third of that Clariion revenue came from Dell, the largest reseller of this product (see EMC's Q4 Stars Clariion

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