Dell sees 'softening' in IT demand

Dell warned investors Tuesday that it expects to see "further softening in global end-user demand in the current quarter," a month after it reported a decrease in second-quarter profits.

Dell didn't give specific financial details, but said it expects to incur costs as it realigns its business. The company said it is "committed to working aggressively on cost initiatives" designed to generate improved growth, profitability, and cash flow.

Last month, Dell reported that second-quarter profits were down 17 percent year over year to $616 million. The company posted earnings of 31 cents per share, missing analysts' expectations of 36 cents per share. At the time, the company said conservative IT spending in the U.S. had spread to Western Europe and several countries in Asia.

Dell executives will address investors at a Bank of America conference Tuesday in San Francisco.

The announcement comes a day after Hewlett-Packard announced it will eliminate tens of thousands of jobs over the next three years, and as the stock market reeled from news of major troubles at U.S. financial institutions.

[canberra_photographer]

Of course Dell sees a softening, they're going backwards and struggling.

[Penguinisto]

Well gee... most folks I know of (myself included) spent most of this year dumping the relatively ancient PowerEdge 2500 and 2600-series machines in our stables (getting an extended contract on one is getting pretty expensive), in favor of consolidating services onto newer and bigger machinery. I remember personally turning six PE 2650's into one HP DL-380, with the disk space parked onto a SAN shelf. (and to be fair, I'm doing the same at my new position now with Dell R900's)

In spite of that, I don't see the 'softening' that Dell describes. I instead see folks making wiser decisions with what they have.

Unlike the consumer side with their bloat and programmatic hairballs (*cough*Vista*cough*), the server side can make some hella nice and efficient use of the newer and beefier tech. You do it by using efficient OSes and hypervisors (Linux, VMWare, Xen) to get more done on less iron, and consolidating the disk space to save both kV and money at the same time (and you get a lot of extra data redundancy out of the deal to boot).

/P

[ppgreat]

Dell = house of cards. Razor thin margins. Trying to sell off its manufacturing plants. Year-over-year layoffs. Less than exciting product line. One of the most confusing websites around, despite their attempt to change their site to look like Apple's. Despite their revenue claims, they have no money. And now, they talk about 'softening' that drops their stock over 11% today.

I'm not saying they're going away tomorrow. But in a few years.....

[Jim Hubbard]

People aren't buying Dell because these _ssh_les took almost $4,000,000,000 (that's $4 BILLION dollars) of taxpayer monies in the form of government contracts and are now hauling the few US jobs that they have overseas.

Companies with fewer than 51% of their employees based in the United States should be ineligible for government contracts. And, companies with company contracts that take their jobs overseas should see those contracts canceled and given to companies that care more about the United States than Dell obviously does.