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The following content is from an older version of this website, and may not display correctly.Multifaceted technology vendor Dell is planning a major push further into the market for commercial enterprise solutions, a business segment already responsible for 30 percent of the company's revenue.
"We intend to double the size of that business from about $16bn or so today," Dell Chairman and CEO Michael Dell said during a meeting with analysts late last week. Dell also pointed out that while there is some demand for IT stacks among a few top-tier companies, the "profit pool" that represented the biggest opportunity was comprised of large, medium and small businesses.
Dell Chairman and CEO Michael Dell speaks at a meeting with analysts on June 24
Over the past two years, there has been an eight-point shift to the solutions business within the company's revenue mix and more than half of gross-margin dollars comes from this business.
Dell's profitability is increasingly being driven by the company's continued expansion in the solutions business, which provides for higher margins than Dell's other businesses, SVP and CFO Grian Gladden said. The segment includes services and enterprise hardware (servers and storage) and consumer services.
The vendor plans to continue investing in organic and inorganic growth of both services and enterprise hardware. The most recent expansion of the services business came last September, when Dell bought the services firm Perot Systems for about $3.9bn and formed Dell Services.
"We have a strong services business, which obviously ÔÇô with the Perot acquisition and the creation of Dell Services ÔÇô we feel very good about as a platform for continued growth," Gladden said.
More investment is to be expected in further expansion of the server-and-storage business. "We think this can be a double-digit sustainable operating income business and really a sweet spot for the company as we move forward."
Dell's bold growth plans for the enterprise business stem from the company's confidence in the current state of the market. "We are in a pretty good IT market," the CFO said. "We see good commercial demand returning to the business. We believe there's a solid corporate refresh that has started," whose momentum is expected to sustain over the next several quarters.
"We intend to double the size of that business from about $16bn or so today," Dell Chairman and CEO Michael Dell said during a meeting with analysts late last week. Dell also pointed out that while there is some demand for IT stacks among a few top-tier companies, the "profit pool" that represented the biggest opportunity was comprised of large, medium and small businesses.
Dell Chairman and CEO Michael Dell speaks at a meeting with analysts on June 24
Over the past two years, there has been an eight-point shift to the solutions business within the company's revenue mix and more than half of gross-margin dollars comes from this business.
Dell's profitability is increasingly being driven by the company's continued expansion in the solutions business, which provides for higher margins than Dell's other businesses, SVP and CFO Grian Gladden said. The segment includes services and enterprise hardware (servers and storage) and consumer services.
The vendor plans to continue investing in organic and inorganic growth of both services and enterprise hardware. The most recent expansion of the services business came last September, when Dell bought the services firm Perot Systems for about $3.9bn and formed Dell Services.
"We have a strong services business, which obviously ÔÇô with the Perot acquisition and the creation of Dell Services ÔÇô we feel very good about as a platform for continued growth," Gladden said.
More investment is to be expected in further expansion of the server-and-storage business. "We think this can be a double-digit sustainable operating income business and really a sweet spot for the company as we move forward."
Dell's bold growth plans for the enterprise business stem from the company's confidence in the current state of the market. "We are in a pretty good IT market," the CFO said. "We see good commercial demand returning to the business. We believe there's a solid corporate refresh that has started," whose momentum is expected to sustain over the next several quarters.