Continuing on its path to transform itself into a company with a focus on end-to-end IT solutions for enterprises, Dell reported revenue growth across all of its products and services selling into the enterprise space for the third quarter of its fiscal 2013.
Brian Gladden, Dell CFO, said the company was shifting the mix of its business to higher-margin enterprise solutions, which was led by its server, networking, services and storage businesses. “Our performance in the second quarter provided another proof-point that our long-term strategy is right.”
Dell’s total revenue for the quarter was US$14.5bn, with net income of $732m, or $0.42 in earnings per share (EPS). Its quarterly revenue grew 8%, while EPS grew 13% year over year.
Revenue from enterprise solutions and services reached $4.9bn – up 6% year over year. Close to a $20bn yearly run rate, this business now represents more than half of the company’s margin and more than one-third of its total revenue.
Along with announcing its results for the quarter, Dell announced the appointment of a new executive to lead its enterprise solutions business. Marius Haas, a former networking exec at HP, took the role over from Brad Anderson, who Dell said was leaving the company by choice.
Dell’s server and networking revenue grew 14%, revenue from its storage products increased 6%, and Dell Services revenue was up 3% year over year.
The company derives the biggest chunk of its revenue from the large-enterprise market. In the third fiscal quarter, $4.5bn in sales came from this segment – 3% less than it generated in the previous year’s third quarter.
Next in size for Dell is the public sector, followed by small and medium businesses and, finally, by consumers. Revenue from the last segment on the list ($2.6bn) declined 22% year over year during the quarter.