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Dell’s 5 Big Earnings Takeaways: Supply Chain Woes, Price Changes And Record Sales

Mark Haranas

From supply chain woes and potential pricing increases ahead to its record-breaking $101 billion fiscal year 2022, CRN breaks down the five biggest takeaways from Dell Technologies’ recent fourth-quarter financial earnings report.

‘Work To Do’ On VMware Pricing Following Spin-Off  

Dell spun off its 81 percent majority stake in VMware to Dell Technologies shareholders in late 2021, making VMware an independent company for the first time since 2004.

However, the two companies have signed a five-year commercial agreement aimed at keeping their strong joint technology engineering road map and go-to-market sales synergies intact. Although VMware wasn’t top of mind during Dell’s financial earning report last week, Dell’s CFO said there’s more work to be done in terms of VMware pricing.

“We’ve taken the VMware revenue, the Dell contribution of VMware revenue, up to somewhere roughly in the 30 percent [to] mid-30 percent range in terms of VMware total contribution,” said Sweet. “As we now have separated … we do have work to do on pricing and on working our way through the five years of those VMware relationships and contracts with our customers, and we are focused on resetting pricing and process over time.”

Sweet said it will be a “24-month journey” to get the pricing, operational costs and processes settled.

“I view it as an opportunity. We’ve got opportunity to improve that and drive better profitability there over time, but it will—it’s going to take some work there,” said Sweet.

Dell also said it repaid $10.6 billion of debt funded primarily with $9.3 billion in VMware dividend proceeds stemming from Dell’s spin-off of VMware.

 
Mark Haranas

Mark Haranas is an assistant news editor and longtime journalist now covering cloud, multicloud, software, SaaS and channel partners at CRN. He speaks with world-renown CEOs and IT experts as well as covering breaking news and live events while also managing several CRN reporters. He can be reached at mharanas@thechannelcompany.com.

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