Second-quarter sales came in strong, rising 22% year over year to $15.5 billion. But most of that revenue climb happened in the enterprise segment, leading the charge with 35% stronger sales. Data center products like blade servers are a particular feather in Dell's hat, which makes sense because that class of hardware is ideally suited for running virtual server farms and cloud-computing services. Need I remind you that these twin revolutions are reshaping the corporate IT world as we know it? Dell's best friend right now is virtualization leader VMware
While the enterprise division waxes, Dell's consumer operations are waning. Once the pride and joy of the world's largest computer systems builder, consumer products now make up just 18% of Dell's total sales. That's probably a good thing in the long run, because this segment is notoriously margin-poor when compared to the less price-sensitive corporate computing market. I can't blame IBM
If Michael Dell is on his way out anyway, this could be the perfect time to refocus and make Dell a single-minded mastodon of the data center. Dell's infamously slim margins will thank the board later, once they fatten up on corporate cash.
Fool contributor Anders Bylund holds no position in any of the companies discussed here. Microsoft is a Motley Fool Inside Value choice. VMware is a Motley Fool Rule Breakers selection. Apple is a Motley Fool Stock Advisor recommendation. Motley Fool Options has recommended a diagonal call position on Microsoft. Try any of our Foolish newsletter services free for 30 days.You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.