Dell Moves Further From Faltering PC Business
As Dell targets deals outside of its PC's business, the company's now bolstered IT services businesses are showing promising signs, with management signaling a further commitment to its presence in the increasingly competitive market.
Sales at its data storage and networking unit rose 5% in the fourth quarter. Meanwhile, February data distributed by Gartner showed Dell gaining a 14.8% server market share from 13.1%, cutting at the over 30% market shares of larger competitors IBM and HP.
In February, Dell unveiled a new line of business servers called PowerEdge that will integrate with its storage gear products and speed up computing tasks for customers. Those servers, networking and data storage products accounted for 31% of Dell's $16 billion in fourth quarter sales.
Dell missed fourth quarter estimates on falling demand for P.C.'s, a unit that comprises over 50% of overall sales, but is falling as a percentage of revenue.Sales at its data storage and networking gear unit rose 5% in the fourth quarter, a services unit for small and midsize businesses got a 6% boost. With Tuesday's acquisition and similar deals AppAssure in February and a $856 million deal for Compellant Technologies in August, Meanwhile, in late February data distributed by Gartner, Dell boosted its server market share to 14.8% from 13.1%, cutting at the over 30% market shares that competitors IBM and HP held in the market. It was also the only vendor among the top 5 server suppliers to show revenue growth. Overall, analysts give Dell shares a price target of $19.17, according to Bloomberg data. -- Written by Antoine Gara in New York
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV