About six months after completing one of the biggest mergers ever in the technology industry, Dell Technologies is grappling with changing tastes in hardware and rising component costs, underlining the challenges of the EMC Corp. acquisition.
In its fiscal fourth quarter, Round Rock, Texas-based Dell reported sales of $20.1 billion and an operating loss of $1.7 billion. During a call with analysts Thursday, Chief Financial Officer Tom Sweet said the company is paying more for some memory and display parts that go into its big lineup of tech gear.
Chief Executive Officer Michael Dell is betting the $67 billion merger with EMC can help the company succeed in a market that’s under pressure from providers such as Amazon.com and Microsoft. Cloud system infrastructure services — which let customers access computer and storage capabilities without the hassle of buying their own gear — are expected to see revenue growth of 37 percent to $34.6 billion this year, according to research firm Gartner.
“So far so good,” Sweet said in an interview. But the numbers have to be put “against the backdrop of an ever-changing market,” he said. “We’re generally on track from where we thought we would be. It’s early on, but we are seeing the power of the portfolios and the relationships starting to evolve.”
