Datalink: FlexPod, Converged Infrastructure, Services Create Great 2013 Financials

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Datalink's 2013 NetApp revenue rose 22 percent over the prior year to reach $180 million, of which 25 percent came from FlexPod sales, Lidskey said. During that time, Cisco revenue increased 75 percent to $105 million, nearly all of which came from converged infrastructure sales, he said.

"This shows why we have put so much effort into our Cisco business despite the margin pressures it presents," he said. "With its combination of compute, network, storage and virtualization components, Cisco’s UCS and Nexus switch offerings are at the heart of the converged data center environment."

On the service side, Datalink in 2013 made several significant investments that it expects to lead to increasing growth in the future, Lidskey said.

These included the hiring of Steve Zipperman, the former Global Services Director in EMC's consulting division, to fill the new position of general manager of advanced services; the expansion of the advanced services team from 30 people to 48 people; the establishment of three new practice areas, including data center transformation, cloud service management and IT resiliency; and the hiring of a new national director of sales for advanced services, he said.

During the question-and-answer part of the call, when asked about who Datalink's primary competitors are, Lidskey said it was typically the manufacturers.

"We have done a very good job of competing against them in our data center wins because we have a wider range of services offerings," he said.

Datalink also competes to a lesser extent with smaller solution providers, who focus more on niche offerings and cannot match Datalink's data center experience, Lidskey said.

"And we can do more for our customers [than the smaller providers]. ... We are able to have a complete conversation around data centers," he said.

Looking forward, Datalink expects first-quarter 2014 revenue of $152.0 million to $162.0 million, compared with $133.6 million for the first quarter of 2013, or an increase of between 14 percent and 21 percent.

Earnings for the quarter on a per-share basis are expected to be between 8 cents and 13 cents on a GAAP basis compared with 6 cents in the first quarter of 2013. On a non-GAAP basis, earnings of 14 cents to 19 cents are expected, which could be down from last year's 18 cents per share, thanks to expenses related to the StraTech acquisition.


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