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Dell may wind down network OEM relationships

Alex Scroxton

In the wake of its July acquisition of Force10 Networks, Dell will look to purge lower-margin networking sales from its business, the company has said, replacing lines it currently resells or OEMs with higher margin Dell technology.

Speaking on a conference call with analysts to mark Dell's second quarter results, Dell director of investor relations Robert Williams said that the firm was "clearly" going to drive Dell branded IP.

"We are really excited about the Force10 product; it's leading technology.... Where we now have a leading industry IP we're going to sell the Dell branded," he said.

However, Williams said that comparisons to the winding up of Dell's relationship with EMC following its storage spending spree were inaccurate, saying it would still sell a complementary mix of networking kit.

"The main difference here is that we didn't resell any particular network vendor anywhere near the scale of EMC, and so there's less of a trough that gets emptied," he said.

Dell is hoping to wrap up the purchase of Force10 within the next two to three weeks, according to senior vice president of Enterprise Product Group, Brad Anderson.

Second quarter revenues at Dell rose just 1% year-on-year to $15.65bn (£9.48bn), but GAAP operating income was up 54% and GAAP net income 63% to $890m.

The firm said it saw solid demand for its server, storage and services portfolio as growth in the enterprise business highlighted the quarter, and added that further acquisitions were on the cards.

Conference call courtesy: SeekingAlpha.com

Related Topics: Desktop PCs, VIEW ALL TOPICS

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