Tin box shifter Michael Dell is having difficulty getting rid of servers at the moment.
Dell Technologies reported its third straight quarter of large server revenue declines and the problem appears to be other suppliers coming in with large bids.
Jeff Clarke, vice chairman of Dell Technologies, during Dell’s third fiscal quarter earnings call with media and analysts said: “It’s an aggressive marketplace from a pricing point of view. We’re competing, but those bids are clearly competitive. Probably the other thing that’s important to notice, [server deals] are taking longer to close. The caution that we’re seeing with our large customers is certainly being seen in our ability to close transactions or how long it’s taking to get the order closed.”
Dell’s server and networking business dropped 16 percent year over year to $4.2 billion in its third fiscal quarter,. The company previously reported a 12 percent drop in its server business year over year in its second fiscal quarter. During Dell’s first fiscal quarter, the company reported a nine percent drop in server and networking revenue year over year.
Clarke attributed the server slump to a large sales drop in China – such as with Chinese hyperscaler operators — while also pointing out that the worldwide server market hit a record high in 2018.
“Clearly we saw unprecedented growth in the industry last year – that growth is being digested by the largest companies in the world and we’re seeing that primarily in those large enterprises in the United States and EMEA, China has been a headwind for the last three quarters, and that continues to be a headwind for us in that marketplace”, he said.
