To tame runaway inflation, the U.S. Federal Reserve System has resorted to interest rate hikes, which have triggered a bear market.
But these tightened macroeconomic factors have not deterred Dell Technologies Inc.’s long-term bullish outlook, as it seeks to weather the storm through total addressable market opportunities, according to Tom Sweet (pictured), executive vice president and chief financial officer of Dell, who said that IT spending is being necessitated by the urge for digital transformation.
“The total market, the core market that we think about is roughly $750 billion or so — if you think about our core IT services capability,” Sweet said. “If you couple that with some of the growth initiatives that we’re driving and the adjacent markets that that brings in, you’re roughly talking about a $1.4 to $1.5 trillion market opportunity total addressable market. So, from that perspective we’re extraordinarily bullish on where are we in the journey as we continue to grow and expand.”
Sweet spoke with theCUBE industry analyst Dave Vellante at the Dell Technologies Summit, during an exclusive broadcast on theCUBE, SiliconANGLE Media’s livestreaming studio. They discussed Dell’s performance and its long-term outlook. (* Disclosure below.)
Assessing the long-term picture
Even though the macro environment continues to be challenging, Dell has a long-term outlook of gaining a competitive advantage in adjacent markets, according to Sweet. In fact, Dell is extraordinarily well-positioned because it is the largest direct selling organization in the technology space.
“The opportunity to grow share, grow at a premium to the market, drive cash flow, drive share gain is clearly there,” he stated. “And couple that with what we think the opportunity is in these adjacent markets, whether it’s telecom, the edge, what we’re thinking around data services, data management. And you put that together with the long-term trends around data creation and digital transformation.”
Dell was able to record significant performance during the pandemic, which was enhanced by its quest to outperform the market, according to Sweet.
“It’s been really great performance through the pandemic,” he stated. “We actually had a really strong first half of the year of our fiscal year ’23, with revenue up 12%, operating income up 12% for the first half.”
Despite some short-term navigation, Dell is properly positioned based on its solutions portfolio, according to Sweet. So, taking advantage of the opportunities is critically important.
“If you look at inflation rates and the efforts by central banks across the globe — through interest rate rise — to press down and constrain growth and push down inflation, you couple that with supply chain challenges that continue particularly in the ISG space … it’s a dynamic environment,” he said. “But I’m confident in the long term. You look at what we’re doing around the growth opportunities that we see, not only in our core space where we continue to invest, but also in the what we call the strategic adjacencies, things like 5G and modern telecom infrastructure … we’re bullish about the opportunities in front of us.”
Stay tuned for the complete video interview, part of SiliconANGLE’s and theCUBE’s coverage of Dell Technologies Summit.
(* Disclosure: TheCUBE is a paid media partner for Dell Technologies Summit. Neither Dell Technologies Inc., the sponsor of theCUBE’s event coverage, nor other sponsors have editorial control over content on theCUBE or SiliconANGLE.)