Dell’s hardware business benefited greatly from organizations, at this stage of their tech rebuild, needing to refresh a hardware base in data centres that was at least two years old, and generally older than that.
Dell Technologies has reported very strong Q4 numbers in business done through the channel, contributing to what was a record sales year for both the channel and the company as a whole.
“Both our Q4 performance and our entire fiscal year last year were record breaking, to the point of being historic and epic,” said Cheryl Cook, SVP, Global Partner, Embedded and Edge Solution Marketing, Dell Technologies. We exceeded 100 billion in revenue overall at $101.2 billion. The channel is over half the company’s business, and channel revenue was $59 billion overall.”
The channel business grew 19% in Q4 and 27% for the year. Dell’s channel business overall is slightly over the 50% line of total sales.
“It’s been in the same consistency for a while – hovering over half the company’s revenue for years,” Cook said.
“The distribution business continues to be a strong route for us,” Cook said, “It was up 20% in Q4, and up 33% for the year.
The channel numbers for the individual product segments were all good.
“The server business was up 38% for the year, and up 33% for Q4,” Cook indicated. “The client solution business was up 33% over year and up 20% for Q4. The OEM business was up 27% for Q4, and up 34% for the full year.”
The storage numbers were less 8% in Q4 and 7% for the full year, but that’s misleading, as those numbers are high given recent history, when storage growth was lower in the single digits and occasionally in the red.
“Storage globally was up 8% in Q4, and up 7% for the year,” Cook said. “We enjoy a leadership position there. The midrange price band is the fastest growing. We have leadership there as well as phenomenal capabilities around our PowerStore portfolio. Our Dell Tech Refresh [recycling] program added a further 2% to that.”
The strong uptick to Dell’s hardware-focused solutions, despite projections from some that hardware sales would continue the trend of decline from the early days of COVID as customers turned to the cloud, hybrid models and as-a-service, reflects the fact that most customers still need hardware, Cook pointed out.
“There’s no question there has been an acceleration from the early pandemic that propelled the ‘do anything from anywhere’ environment,” she said. “That trend is a factor. But another is the fact that organizations now need to modernize and update their infrastructure, which leads to increased data centre sales. Another factor is the increase in surface threats which need to be met with cybersecurity. All of these things impact data centres where much equipment is two years old or older. It requires that organizations get savvier to ensure that the right level of flexible environment is met.”
While Dell officially spun VMware off last November 1, Dell’s VMware-related sales in Q4 were up 4%, while yearly numbers were up 14%, both of which Cook said were very good.
“Our Go-to-Market with VMware is very, very strategic for both companies,” she stated. “We entered into a five-year commercial agreement between the two companies, indicating that Dell is committed to being first and best with VMware. We will continue to co-engineer to bring the best solutions to market. Partners will see a strong Go-to-Market, with business as usual, and the five-year agreement ensures that there will be no surprises.”
Cook said that many VMware partners who sell Dell will also benefit from the revamped organizational structure of the programs.
“Partners who were members of both programs could always participate in two separate programs,” she noted. “What we have now done expands on what we did before. We had a select number of Titanium partners who could purchase their licenses from Dell, and that has now been expanded to all the metallic tiers.”
Dell says that the amount of money paid in rebates was higher than ever – not really a surprise given that Cook described both the Q4 and full year partner numbers as record breaking.