Dell predicts corporate refresh will continue well into 2011


Dell predicts corporate refresh will continue well into 2011

Simon Quicke
Corporate spending on the desktop refresh is set to continue for the next few quarters despite the ongoing fears of a double-dip recession according to Dell.

The vendor talked about the state of demand as it revealed its second quarter numbers last night with a 22% increase in revenue to $15.5bn and a 9% rise in net income to $629m for the three months ended 30 July.

Where the ears pricked up though was when the vendor came to forecasting the current and future state of demand from both large and small companies with it predicting that the current corporate refresh cycle will continue and the traditional seasonal highs of Q3 will contribute to the next set of results.

Brian Gladden, senior vice president and CFO at Dell, said that it had seen growth in the emerging markets in BRIC countries and EMEA delivered 24% growth, although the UK only delivered 6% compared to 31% in Germany and 22% in France.

The SME side of the business was strong with a 25% increase in revenue but the consumer side remained flat producing a $21m operating income loss. Although public sector was relatively flat it had made inroads into the health market with is archiving solution for that vertical.

"We are seeing a broad corporate client refresh, and we believe this solid demand will extend through the next several quarters," he added. "For our third quarter we expect the typical seasonal improvements from our federal government and commercial businesses."

He added that component pricing was improving and that would lead to some slight price reductions in the next couple of quarters.
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