Dell repots increase in revenue and operating income; VMware posts strong performance

On the heels of VMworld, parent company Dell Technologies this reported a strong Q2 2020, which ended on Aug. 2. Company Vice-chairman Jeff Clarke said enterprises are “in the early stages of a technology-led investment cycle.”

Highlights from the quarter included:

  • Launch of Dell Technologies Cloud, which integrates VMware products designed to simplify hybrid cloud deployments;
  • VMware Cloud on Dell EMC which enables a data center as a service solution;
  • A 77% spike in orders for VxRail, a fully-integrated HCI system;
  • And 30% growth in bookings for NSX, a network virtualization platform.

On the client side, Q2 revenue hit $11.7 billion led by 12% growth in commercial revenue, while consumer revenue declined 12% to $2.7 billion. The company reported double-digit revenue growth from commercial notebooks, desktops and workstations.

During VMworld, Michael and Dell and VMware Pat Gelsinger both commented on what the ongoing trade war between U.S. and China means for the company.

“The big context that I would suggest we think about,” Gelsinger said, is “we don’t think these disputes and issues will get resolved quickly. Against that long time period, we see the world as increasingly becoming two trading blocks,” in the East and the West.

He continued: “We believe every company needs to determine how it lives in a dual trading block, building up its supply chains, engagements, customers and the trading partners it works with assuming that’s a long-term trading block world. We’re committed to China and we’re adjusting how we work with that portion. We believe every company is in the process of figuring out how to live in this sort of dual supply chain, dual trading block world.”

Following Gelsinger’s on-stage comments, Michael Dell hopped up from a seat in the front row, grabbed a mic and shared his thoughts.

“We have had to make some adjustments to our business to deal with the tariffs and will continue to make those adjustments. Our first priority is to ensure continuity of supply for our customers. Fortunately we’ve been able to do that. We have a very substantial business in China and outside of China that certainly relies on our global supply chain. We’ll speak with the government officials to encourage them to continue to work together to find a successful resolution to the current tensions, which we certainly don’t find to be productive to our business.”

Click here to view Dell Technologies full Q2 financial reporting.  Dell stock prices went up 7% right after earnings were reported.

Clarke said in a call with analysts that digital transformation is driving IT spending. “That investment cycle is fueled by the exponential increase in a data and data-centric workloads that drive better business outcomes alongside an increasingly diverse and mobile workforce.” He said enterprises are “grappling” with how to manage data volume, multi-cloud environments, security complexity and the role of artificial intelligence and machine learning, “all the while defining their approach to cloud and increasingly the edge and IoT.”


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