Good morning,
“One of the things that’s fun about this company is technology is ever-changing,” Dell Technologies CFO and EVP Tom Sweet told me. “You have to continue to evolve your capabilities, solutions, and offerings to your customers, or else you become less relevant.”
The Fortune 50 multinational tech company based in Round Rock, Texas, garnered record financial results for its fiscal first quarter. Revenue was up 12% to $24.5 billion. The company generated an operating income of $1.4 billion, a 96% increase compared to the same period in the prior year. Dell reported annual revenue of $94.2 billion for its fiscal year 2021.
The onset of the COVID-19 pandemic essentially ushered in a pivot to conducting life online. “Technology’s never been more important,” Sweet says. “We had a very strong client business last year given the use and the fundamental importance of the PC,” he says. “We had an infrastructure business that improved as we went through the year [as it] was a little soft in the middle [of the year].” Sweet also credits the “great flexibility by our team members” for the revenue growth and profitability, he says.
But the pandemic also accelerated a global semiconductor chip shortage. “Demand outweighs supply in many industries, including our own,” Sweet says. “We see shortages in semiconductors, and it has, at times, caused us to have longer lead times for our customers as we’re working with our supply chain. We think that this shortage probably continues on into next year.” But Dell is continuing to navigate the shortage with a focus on maintaining its momentum, he says.
“If you look at the forecast for technology spending over the next two to three years, it’s quite strong in the sense of the market and the opportunity,” Sweet says. “We ultimately think that the world is multi-cloud,” he says. Dell’s APEX offers a custom cloud-based managed solution. The company has an end-to-end strategy—from the PC to the core data center to the cloud to the edge— to serve clients and customers, he says. Support for telecom providers in processing data is part of the strategy. “The advent of 5G is driving data creation out to the edge,” Sweet says. “How do we help our customers with real-time data capture processing at the edge of the network?” As part of the company’s evolution, Dell announced in April it would spin out VMware, an enterprise software firm, forming two standalone public companies.
Being customer-focused is also central to the company’s strategy, including “pay as you consume type models,” Sweet says. An example? If a customer wants to purchase data storage, “we’ll install the capability or the solution in your data center,” he says. Dell has monitoring software that tracts storage capacity and bills customers at a predetermined, negotiated rate, only based on usage, he explains. “Customers like that because they’re paying for the capacity that they’re actually using,” he says.
Sweet joined Dell in 1997, holding various financial leadership positions before becoming CFO in 2014. “The company continues to transform,” he says. “That’s one of the great things about technology—you’re always transforming; you’re always changing.”
See you tomorrow.
Sheryl Estrada
sheryl.estrada@fortune.com
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Fortune’s CFO Collaborative in partnership with Workday, “The Promise and Pressure of ESG Measures,” takes place on Wednesday, August 11. The event, created just for CFOs, will feature Brian T. Moynihan, chairman and CEO, Bank of America; Claus Aagaard, CFO, Mars Inc.; Ann Dennison, CFO, Nasdaq; Giulia Siccardo, associate partner, McKinsey & Company; and Emma Stewart, sustainability officer, Netflix. CFOs can join their peers in learning more about embracing ESG while attracting new investors and cutting borrowing costs and operating expenses. CFOs can apply here. For more information, email CFOCollaborative@Fortune.com.
Big deal
S&P Global Ratings' ESG In Credit Ratings Newsletter for July shows shifts in environmental, social, and governance factors through June 2021.
Courtesy of S&P Global Ratings
Going deeper
On July 21, Indeed.com, an employment website, released data on the impact of the pandemic on U.S. job postings. Through July 16, job postings on its website were 36.5% above February 1, 2020, which is the pre-pandemic baseline, according to the report. All sectors are posting job openings "above the pre-pandemic baseline," with industries like manufacturing, construction, and human resources leading, according to the report. But hospitality and tourism, and beauty and wellness, are the "big laggards."
Leaderboard
Joyce Bell was named CFO at TeamSnap, a sports management and communication software maker for amateur sports. Bell previously served as CFO at PrismHR and Brand Networks, private equity-backed software firms.
Michael Weiner was named SVP and CFO at Genpact, a global professional services firm, effective August 10, 2021. Weiner most recently served as EVP, CFO and treasurer of National General Holdings Corp.
Overheard
"I can't say for certain what [sponsors'] loss on return on investment will be... but some of them will see at least a 25-40% loss."
—Rick Burton, professor of sport management at Syracuse University, on how the pandemic is financially impacting sponsors of the Tokyo Olympics, as reported by Fortune.
