Feeds

Dell is beat by The Street

Awaits Win7 bonanza

Beginner's guide to SSL certificates

Dell released its financial results for Q3 ended 30 October on Thursday, and for its troubles, it took a beating in after hours trading.

The good news is that the company remains profitable. The bad news is that those profits have sunk 54 per cent since last year - and were 5 cents a share worse than analyst estimates.

And revenues were little to write home about, falling 15 per cent from last year to $12.8bn. Wall Street had forecast revenues of $13.2bn.

The contrast with arch-rival HP is striking. Last week, HP rushed out prelimary results for its fiscal Q4 to accompany news of its impending takeover of 3Com. Earnings per share is up on revenues down 8 per cent.

Net income is where Dell really took it in the chin. In 2008's third quarter - hardly a bountiful period itself - net income was $727m, but in the same quarter this year, it had shrunk by 54 per cent to $337m.

But Chairman and CEO Michael Dell told analysts and reporters on a conference call when discussing his company's third-quarter fiscal 2010 performance that he sees a Windows 7–infused glow on the horizon.

And he's not talking about Windows 7 Home Premium. Dell is talking enterprise. After all, as he said when discussing the disaster that was Vista, "I can't remember a time when a very high percentage of [IT managers] skipped an entire operating system."

Leapfrogging that unfortunate OS led to a lot of old hardware running old software. "What we remind them - and they know this - is that Windows XP is eight years old," Dell said. "These IT managers really know that they cannot extend the life of these client assets forever."

"Forever" should end next year, according to Dell. "The momentum we're seeing in the enterprise customers around client has nothing to do with Windows 7 at this point. We are seeing a pipeline of Windows 7 that's starting to build for enterprise customers really next year."

Next year can't come soon enough.

The company also found hope in the fact that enterprise sales are beginning to show signs of life - though, again, only slightly. Enterprise revenue was up four per cent quarter-on-quarter to $3.4bn on a one per cent improvement in shipments - although that revenue was down 23 percent from a year ago.

SMB revenue showed a marginally better improvement, with $3bn in revenue that was up five per cent quarter-on-quarter on a nine per cent improvement in shipments, and down a comparatively painless 19 per cent year-on-year. Compared, that is, with the moribund enterprise market.

But when a 19 per cent drop can accurately be described as "comparatively painless," it's time for some enterprise and SMB market stimulus. "Remember," as Dell's CFO Brian Gladden told the conference-call listeners, "our business is 80 per cent commercial."

Server sales are beginning to pick up for Dell, with revenue up 10 per cent and unit sales up one per cent quarter-on-quarter. But Dell and the rest of the hardware industry is waiting for Windows 7 to stimulate sales of a new generation of client desktops into the enterprise and SMB. ®

The next step in data security

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
JINGS! Microsoft Bing called Scots indyref RIGHT!
Redmond sporran metrics get one in the ten ring
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Murdoch to Europe: Inflict MORE PAIN on Google, please
'Platform for piracy' must be punished, or it'll kill us in FIVE YEARS
Bono: Apple will sort out monetising music where the labels failed
Remastered so hard it would be difficult or impossible to master it again
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Sony says year's losses will be FOUR TIMES DEEPER than thought
Losses of more than $2 BILLION loom over troubled Japanese corp
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.