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"Excluding the EMC business we're moving away from, that [storage] business grew 5 percent," said Steve Felice, Dell president and COO, in the same video. "There are several cases where we see good ramps, like Compellent and Force 10. Now we're taking on some new IP with SonicWall and AppAssure. We like what we're seeing out of the gate."
On a conference call with analysts, Felice noted that Dell expanded its channel partnerships to more than 103,000 companies in the first quarter. "These partners are becoming increasingly important as we provide a broader set of converged solutions on a global basis," he said.
Dell's Enterprise Solutions and Services business grew 2 percent to $4.5 billion and contributed half of Dell's gross margin, according to the company. Dell Services revenue increased 4 percent to $2.1 billion.
Overall, the large enterprise space was down about 3 percent, Felice said in the video, even though the pipeline was pretty strong. "Clearly, we saw customers putting some decisions off. The pipelines remain healthy so I think this is a case of getting these things converted into actual sales," Felice said.
The public sector space was down 4 percent and had "a variety of ups and downs," according to Felice. "One bright spot was federal spending is starting to come back, especially as we head into a seasonally strong quarter. We saw some weakness in health care and state and local business and elementary [education] business, so it was the smaller-type [segments] that saw budget constraints," Felice said.
The consumer space posed challenges because of budget constraints as well and because consumers are moving to lower-priced products, he said.
"[That's] an area where we've chosen not to have a lot of participation. We don't see a lot of profit there. We had to make sure we stuck with our strategy. The XPS line grew above 33 percent but it's not big enough yet to [overcome] the shift we're making away from the lower-end products to the higher end," Felice said.
Dell provided scant details regarding the current quarter, saying it expected revenue to be "in line with historical seasonal trends" and be up 2 percent to 4 percent from the first quarter. Analysts are projecting earnings of 50 cents per share on sales of $15.42 billion for the July-end quarter.
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