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Virtualised storage bucks 'worst quarter in years'

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Dell's financial first quarter 2010 results saw revenues and profits down, but within the falling revenues there was a storage bright spot.

Dell's total storage revenues in the quarter were $534m, 24 per cent down from the previous quarter's $703m and 17 per cent less than the $644m reported in the first quarter of fiscal 2009. Stifel Nicolaus analyst Aaron Rakers believes that this "represents the worst performing quarter the company has seen in its storage business over the past several years."

However, CEO Michael Dell said there was significant growth in sales of Dell's EqualLogic iSCSI virtualised storage products. In fact revenue from EqualLogic systems, including the PS6000 series of storage arrays, was up a gratifying 71 per cent compared to the same quarter the previous year.

With overall storage revenues down 17 per cent year on year, but EqualLogic ones up 71 percent, it looks as if there has been a not insignificant decline in Dell's EMC storage revenues in the quarter. Rakers thinks Dell's Clariion (AX and CX) revenues were around $135m in the quarter according to a chart in his notes.

The Dell EMC partnership is set to run to 2013 and it has contributed more than $10bn of revenue for Dell since 2002, with more than 55,000 systems installed. The relationship is being extended with a new line of deduplication products, using Quantum DXi technology.

Dell said that the EqualLogic storage business is now four times larger than when it was acquired in November 2007 for $1.4bn. At that time, EqualLogic was looking like a $100m/year revenue company, implying a $400m/year revenue run rate now. We could speculate that it has just had a roughly $100m quarter, indicating Dell's other storage revenues were $434m in the quarter.

It looks like the small and medium enterprises targeted for the EqualLogic kit are loving it. No surprise that such a healthy SMB market has prompted Dell rival HP to announce new products for it yesterday, including X1000 iSCSI SAN products and Virtualisation Bundles using LeftHand Networks SAN technology. ®

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