Feeds

Have Dell's EMC storage revenues been falling?

Weaker CLARiiON calls

Combat fraud and increase customer satisfaction

Comment Dell seems to have recorded an annual decline in sales of its EMC CLARiiON-sourced storage, according to its latest quarterly results.

The company has just announced its first fiscal 2011 quarter results, and overall storage revenues were $554m, up 3.7 per cent year-on-year, and down 7.5 per cent compared to the previous quarter. EqualLogic-based revenues are going up like a rocket, growing 78 per cent year-on-year. PowerVault product revenues also grew 20 per cent year-on-year. So what dragged overall storage revenue growth down to a measly four per cent?

It's EMC CLARiiON products OEMed through Dell.

Stifel analyst Aaron Rakers reckons EqualLogic revenues were $167.4m in the latest quarter, and writes: "This would imply core Dell storage revenue (ex-EqualLogic; primarily Dell/EMC and PowerVault solutions) declining approximately 12.1 per cent year-on-year and 17.5 per cent sequentially."

Since he says PowerVault revenues rose 20 per cent year-on-year, yet PowerVault plus EMC revenues fell 12 per cent over that period, the EMC revenue decline must have been large. Various spreadsheet models with different proportions of PowerVault to EMC product sales suggest the EMC revenue decline could have been between 10 and 40 per cent year-on-year.

Dell storage revenue growth history

Indirect support for this comes from EMC chairman and CEO Joe Tucci. He told investors at a conference that he believes the Dell-EMC relationship will grow stronger over time. EqualLogic sales had affected CLARiiON sales through Dell and Dell's signing up to ship Celerra and Data Domain products from EMC should put the relationship into a growth mode again. In other words it has not been in a growth mode.

Another source of CLARiiON woe is JP Morgan. It has published a North America Equity Research note on EMC written by Mark Moskowitz, dated 25 May 2010, which says:

Our conversations with industry contacts suggest that EMC's solutions are not offering quite the seamless and cost-effective approach to implementing server virtualization as NetApp’s solutions. This shift away from EMC ... is mainly due to NetApp's solutions having better compatibility with VMware virtualisation software. NetApp’s IP-based heritage and its lower total solutions cost provide high value, i.e., more storage per dollar."

And this, which pertains more to Dell:

EMC has made suitable improvements in its CLARiiON product line, though we believe NetApp's heritage as more of a low to midrange solutions provider puts the company in the driver's seat. EMC does not trail far behind, though. Another swing factor, however, is Dell's EqualLogic business. Our conversations with industry participants indicate that Dell's IP-SAN solutions also are grabbing increasing attention in the marketplace.

Moskowitz is saying here that Dell EqualLogic competes with CLARiiON for sales.

Rakers has charted Dell storage revenues over the past five years and there is a clear long-term decline in storage revenue growth over the period. He is modelling that the decline will reassert itself after the current recovery tapers out next year.

Dell was asked to comment on this story but declined, saying it cannot disclose actual numbers around EMC. ®

3 Big data security analytics techniques

More from The Register

next story
This time it's 'Personal': new Office 365 sub covers just two devices
Redmond also brings Office into Google's back yard
Kingston DataTraveler MicroDuo: Turn your phone into a 72GB beast
USB-usiness in the front, micro-USB party in the back
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
BOFH: Oh DO tell us what you think. *CLICK*
$%%&amp Oh dear, we've been cut *CLICK* Well hello *CLICK* You're breaking up...
AMD's 'Seattle' 64-bit ARM server chips now sampling, set to launch in late 2014
But they won't appear in SeaMicro Fabric Compute Systems anytime soon
Amazon reveals its Google-killing 'R3' server instances
A mega-memory instance that never forgets
Cisco reps flog Whiptail's Invicta arrays against EMC and Pure
Storage reseller report reveals who's selling what
prev story

Whitepapers

SANS - Survey on application security programs
In this whitepaper learn about the state of application security programs and practices of 488 surveyed respondents, and discover how mature and effective these programs are.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Top three mobile application threats
Learn about three of the top mobile application security threats facing businesses today and recommendations on how to mitigate the risk.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.