Dell Storage Soars

Dell Inc. (Nasdaq: DELL) once again benefited from its storage partnership with EMC Corp. (NYSE: EMC) last quarter, racking up 31 percent revenue growth from last year from the systems the companies co-brand.

Growth of Dell-EMC storage revenue outpaced the companys solid 18 percent overall growth, and storage disk capacity rose 112 percent from last year. Dell also expanded its market with its AX 100 SMB SAN. Dell CEO Kevin Rollins told analysts today that 41 percent of the AX 100 customers were new to Dell. He did not say how much revenue the AX 100 generated, though.

Except for a dip in the quarter Dell reported last May when storage revenues dropped 14 percent year over year, it has made steady gains in revenue as the result of its partnership with EMC. Dell storage rebounded from the loss to pick up 36 percent the following quarter and jumped again last quarter. (See Dell's Storage Numbers Dip, Dell Revenue Rises 20 Percent, and Dell's Storage Sales Jump.)

Financial analysts estimate that Dell gets about half of its storage revenue through its EMC partnership. The two companies sell competing NAS products.

Dell and EMC co-brand midrange Clariion SAN systems, and last May introduced the low-end AX 100. Dell also resells EMC’s high-end Symmetrix system, but both EMC and Dell have reported declines in Symmetrix sales while Clarrion sales have risen in recent quarters (see Tucci Touts ILM).Rollins was apparently correct last May when he called the slip in storage a “one-time aberration.” Rollins claimed the dip was due to a change in product mix, as Dell placed more emphasis on selling the Clariion than Symmetrix.

Rollins reiterated that today, saying Dell is "ramping down Symmetrix sales and ramping up Dell-EMC SANs."

— Dave Raffo, Senior Editor, Byte and Switch