Dell Technologies portrayed confidence and broader opportunities as it released results for its second fiscal quarter of 2021, pointing to widespread digital transformation efforts spurred by the COVID-19 crisis.
“While the pandemic didn't start the remote learn and work trend, it is certainly accelerating it,” Dell COO Jeff Clarke said during the company’s second-quarter fiscal 2021 earnings call, according to a Seeking Alpha transcript.
This transition applies to Dell internally and its customers, he said, noting that the company’s workforce has been working remotely for 171 days thus far, adding that “the novelty of the new normal has worn off.”
Dell has “moved beyond work as a location. COVID-19 has made one thing clear to us: work is something you do, an outcome, not a place or a time. And it takes teamwork and a culture that prioritizes outcomes and results over effort,” Clarke said.
Employee Productivity at ‘All-Time High’Although Dell’s employees are beset with many challenges, including parenting, caregiving, and surges in COVID-19 infections around the world, “employee engagement and productivity is at an all-time high,” he said. “We are seeing a human transformation right before our eyes, emphasizing trust, empathy, patience, and flexibility that will serve society and business long after these tough times are over.”
Dell has intention to return to the previous status quo. It now expects about 60% of its workforce to stay remote or only come into an office one or two days a week, according to Clarke.
One of Dell’s customers, a major bank it declined to name, recently moved 200,000 of its 280,000 employees to a work-from-home environment. That transition involved the deployment and integration of 2,000 servers, 200,000 virtual desktop infrastructure clients based on VMware Horizon, VMware Cloud Foundation, and Dell EMC VxRail.
“After all of this investment to enable remote everything, we will never go back to the way things were before,” Clarke said.
Dell’s hyperconverged infrastructure appliance, VxRail, which it co-engineers with VMware and runs on VMware’s hybrid cloud software stack, gained a pair of new systems in June.
Dell Keeps VMware Plans Under WrapsThe company declined to reveal new details about its plans to explore a potential spin-off of its 81% stake in VMware, which it copped to during the quarter. It reiterated that a spin-off could benefit stockholders of both companies, simplify capital and corporate structure, and increase flexibility. VMware, like Dell, beat Wall Street’s expectations during its latest quarter, which ended in parallel with Dell’s.
Clarke did, however, say the company is on track to close its $2.075 billion sale of its RSA security business, which it announced in February, to private equity firm Symphony Technology Group (STG) next month.
Dell Technologies banked nearly $1.1 billion in net income on $22.7 billion in revenue during the quarter. On a year-over-year basis, profits were down 69% and revenue dipped 3%.
Revenue from its Infrastructure Services Group was down 5% year over year at $8.2 billion, and Client Solutions Group revenue hit $11.2 billion, representing another 5% year-over-year decline.
The company is experiencing a rising “demand for simpler, more agile IT across multiple clouds,” Clarke said. “Companies’ rush towards the flexibility and ease of public cloud but are now looking to hybrid cloud for a longer-term answer. Essentially, customers want a new operating model, one that consistently delivers the best of all clouds: private, public and edge.”
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