) recently announced that Grow Financial, one of the leading credit
unions, has deployed a host of its data center appliances. Detailed
financial terms of the deal were not mentioned.
Florida-based Grow Financial's Federal credit union is run by
500 employees across 18 locations. It manages an asset base of
roughly $1.6 billion. A long-time Dell customer, Grow Financial has
been deploying various consumer class and enterprise class products
in order to efficiently manage its data center and overall IT
Grow Financial's data center is now leveraging Dell's current
storage portfolio, which includes Compellent storage arrays,
PowerEdge servers and KACE Appliances. The company replaced its
existing storage management system, which was run by
Dell's storage systems led the Fed credit union to achieve an
operational efficiency (storage optimization) of 30% and storage
management cost reduction of 50.0%, leading to higher return on
investment. Apart from storage appliances, Grow Financial has also
opted for Dell's desktop and notebook line-up.
The names Compellent and KACE are quite familiar to us since
these were the most important acquisitions of Dell in recent times.
The company took over Compellent Technologies in December 2010 at a
very pricy consideration and made itself a key player in the
cloud-based enterprise data storage systems market.
KACE Networks, a server appliance specialist, was acquired in
February 2010. With the acquisition, Dell was able to offer server
support for inventory management and asset management specifically
to the SMBs (small and medium businesses).
Dell has been working hard to expand its storage portfolio for
the past few years. It entered the storage market in 2008 with its
purchase of EqualLogic. However, the company had no luck with its
much-hyped bid for 3PAR Inc., losing out to archrival
) in August 2010. 3PAR provides highly virtualized storage
solutions with advanced data management features, such as dynamic
tiering and thin provisioning for cloud computing environments.
But the tech giant made up for the loss through consecutive
acquisitions on the storage front. We believe that its increased
focus on the storage vertical will be extremely beneficial for
Dell, since this is expected to be one of the fastest-growing
segments within technology for the next five years. Dell currently
generates roughly 3.0% of total revenue from its storage
The company reported disappointing first quarter results, with
both revenue and earnings per share (EPS) declining on a
year-over-year basis. Moreover, EPS was also below the Zacks
Consensus Estimate. Based on current PC demand trends, level of
consumer spending and macro uncertainties, we think that the second
quarter guidance is a bit aggressive. However, the growth in
Servers and Services segments are encouraging.
Currently, Dell has a Zacks #3 Rank, which implies a short-term
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