Dell Technologies’ brass today shared cautious optimism about a global IT rebound in 2021, but the resurgence of COVID-19 infections in the U.S. and globally could delay that revival. 

“We have now been through three quarters of navigating an uncertain and at times difficult year. We have been tested across our global society, across industries and companies, and as teams, and as individuals like never before,” COO Jeff Clarke said during the company’s third-quarter fiscal 2021 earnings call.

“Through it all, one thing is clear: the mega technology trends that we have long called out are accelerating and these trends are highly favorable to Dell Technologies,” he said. 

Clarke pointed to the vendor’s ongoing tracking of digital transformation patterns among more than 4,000 Dell Technologies’ customers, noting that it’s latest survey “revealed that 80% of organizations globally have fast tracked digital transformation programs.”

Dell Technologies’ investments in edge computing, distributed work, security, 5G infrastructure, and data management are foundational and bolstered by trends that will foster a more distributed IT environment, according to Clarke. 

“Customers are looking for a choice in the way they consume and pay for IT,” he said, pointing to Dell Technologies pledge to shift to cloud-delivered IT services and the company’s rebranding of that effort last month as Project Apex. However, the company hasn’t said when that shift will be complete. 

CFO Tom Sweet largely framed that transition around the company’s strategy to bolster a hybrid cloud offering. 

“Though some companies have moved to the public cloud for certain workloads or immediate business continuity needs, hybrid cloud momentum is building as the longer term answer — a new operating model where workloads will be distributed between public and private clouds, traditional data centers, and increasingly out to the edge,” he said. 

“With 5G data driven insights, automation, and embedded intelligence, we will see an explosion of edge computing in smart cities and transportation factories, hospitals, and schools around the world,” Sweet said.

Dell Technologies banked $881 million in net income on $23.48 billion in revenue during the quarter, marking a 3% year-over-year increase in revenue and a 60% jump in profit during the same period. 

The company expects its Q4 revenue to be up 3% to 4%, however, considering the ongoing uncertainty and risks associated with the COVID-19 crisis, “we believe it’s still too early to talk about next year,” Sweet said, adding that its “cautiously optimistic about the potential for recovery post-pandemic related pressures.”

Dell’s Client Solutions Group reported revenue of $12.3 billion, and its Infrastructure Solutions Group reported $8 billion in revenue during the quarter. Within the latter business unit, storage revenue hit $3.9 billion and servers and networking revenue neared $4.2 billion, according to the company. 

Data center sales remain soft amid the ongoing global pandemic, but “over the quarter, month over month, we saw improvement in the absolute demand profile quite honestly in both server and storage,” Clarke said.

“That’s the trend, but again we see budgets have tightened, they’ve been really redirected over the year to ensure the workforce is enabled to work from home, and that certainly delayed or pushed bigger spend projects over the course of the year and there’s no reason to believe that doesn’t continue into Q4,” he added.

Dell Technologies was also unwilling to share anything new about its exploration of a potential spin-off of its 81% ownership stake in VMware that the company formally acknowledged in July. VMware also reported its Q3 fiscal 2021 earnings today, marking the first time the company’s subscription and software-as-a-service (SaaS) surpassed its on-premises license revenue. 

“We believe the tax-free spin could drive significant shareholder value by simplifying our capital structures and enabling greater strategic flexibility while maintaining a strong commercial partnership between Dell and VMware,” Sweet said at the outset of today’s earnings call. “Both Dell and VMware have publicly highlighted mutual interest and potential benefits of such a transaction, and have engaged on key work streams, including mutually beneficial commercial arrangements.”

He also reiterated that the earliest closing of such a transaction, assuming an agreement is reached, would be September 2021. “There is also the possibility that we will not do anything and we would maintain our current ownership structure,” Sweet said.