Cloud helps drive Dell’s growth

Cloud computing has been credited with boosting Dell’s second quarter results to $15.7 billion.

Although the figures released today only showed a one per cent rise in revenues since last year, operating income rose 54 per cent to $1.1 billion and net income shot up 63 per cent to $890 million…


According to Dell, the key to the improvements fell within the enterprise solutions and services division, which includes its cloud computing and virtualisation plays.

Revenues for this area grew by four per cent to $4.6 billion over the three months and this accounted for a massive 35 per cent of the firm’s commercial revenues.

The biggest growth for enterprise solutions and services revenues was in the small and medium business sector, with a 16 per cent increase. However, the most impressive figure fell to large enterprise, which brought in revenues of $1.9 billion for Dell in this area alone.

“We continue to see great momentum in the high-growth areas of our business, which is a direct reflection of the discipline and strong execution our global Dell team is applying to help solve real-world challenges for our customers,” said Michael Dell, chairman and chief executive (CEO) of the company.

“We’re creating efficiency across every step of the IT value chain and ultimately enabling all customers—from home users to large businesses and government organisations—to achieve the outcomes that matter most to them.” 

However, despite all the positive figures, Dell has revised its forecasts for the rest of the year, blaming “a more uncertain demand environment.”

Instead of the predicted full year revenue growth of between five and nine per cent, the new outlook has cut this down to one to five per cent.

As well as the environment, Dell claimed the lowering of expectations was also down to “strategic decisions to redirect resources from lower- to higher-value solutions.”

Brian Gladden, Dell’s chief financial officer, said: “Our results for the first half of the fiscal year reflect our commitments and are enabling us to accelerate the reshaping of our portfolio while delivering substantially higher operating income.”

“We’re maintaining our focus on developing higher-value solutions and services to drive stronger profitability and smartly manage a balance of growth, increased operating income and cash flow.”