Generally speaking, Dell Technologies is demonstrating major business momentum. But the PC, server and data center hardware giant isn't quite ready to discuss or disclose revenues from the company's as-a-service push, known as Dell APEX.
The big picture looks like this: Dell delivered record Q3 revenue of $28.4 billion, up 21 percent from Q3 last year. The results included "broad strength across commercial PCs, servers and storage," Dell said in a November 23, 2021, earnings statement.
Still, Dell's long-term fortunes will involve competition against public cloud providers (Amazon Web Services, Google Cloud and Microsoft Azure) and traditional rivals that are pivoting toward as-a-service options. Hewlett Packard Enterprise GreenLake and Cisco Plus certainly come to mind. HPE, has vowed to make all its products available as a service by 2022, and Cisco has aggressively adopted a recurring revenue mindset.
Amid that backdrop, Dell continues to add more as-a-service options to the APEX portfolio. For instance, Dell and VMware are building an infrastructure-as-a-service relationship -- known as Dell Technologies APEX Cloud Services with VMware Cloud -- to provide "secure and consistent operations across multi-cloud environments." Details about the Dell-VMware effort surfaced in October 2021.
Dell APEX Revenues: Mum's the Word
"While I won't quote specific numbers to your question on customer feedback, first and foremost, what I would say is interest in APEX continues to accelerate, and our pipeline continues to build across the family of offers. And the customer feedback has been good. They're drawn to the simplicity of engaging through our console, the flexibility to adjust based on their needs and the value, obviously, of only paying for what they use.
The second thing I would call out is we continue to make good progress in broadening the portfolio, as we called out in our remarks today. We were excited to announce the APEX Cloud Services with VMware Cloud, which is available next year. That's another great proof point of our joint engineering with VMware.
So we feel like we're making good progress on APEX. From a financial impact, look, as you said, we're still in very early innings, and we'll provide much more detailed commentary and guidance when it's appropriate. But in the meantime, we're focused on customers and delivering against the technical road maps, as I said.
HPE GreenLake Revenues: Some Selected Clues
Meanwhile, HPE provides some clues about its as-a-service revenues -- though exact GreenLake revenues are not disclosed.
The clues begin with HPE's annualized revenue run rate (ARR) -- which was $705 million in HPE's Q3 of 2021, up 33 percent from the corresponding quarter in 2020. So what exactly does ARR include? The answer, according to HPE, involves:
- The annualized value of all recurring net GreenLake services revenue;
- related financial services revenue (which includes rental income for operating leases and interest income for capital leases); and
- Software-as-a-Service ("SaaS"), subscription, and other as-a-Service offerings recognized during a quarter and multiplied by four.
Roll all that together, and HPE ARR spans products and services such as GreenLake as-a-Service, Aruba SaaS, CMS SaaS, and other software assets, HPE indicated.
Cisco Annualized Recurring Revenue: As for Cisco, that company is further along in its transition to recurring revenues. The evidence: Cisco's annualized recurring revenue was $21.6 billion for the first quarter of fiscal 2022, up 10% year over year, the company said on November 17.