Super Micro reported 11% gross margins. They are driving prices down and Dell can't compete on cost structure it appears, hence the layoffs and new GTM strategy.
How bad is the EMC storage biz after losing VMWare distribution business? Imagine EMC is seeing market share losses.
No one is smaking money on AI. The bubble popped. DELL stock is facing new reality. Earnings call will be fun. Can't wfr your way out of this one.
Ultimately, although we can say Dell or Supermicro or whomever is selling the most accelerated servers, the point is that Nvidia calls the shots. To them, OEMs are just a distribution channel for it's GPUs. They can directly control both the volume and margin of the servers they sell, by simply controlling the price and supply of GPUs available to them. What is in Nvidias interest is to not allow any one distributor to become too powerful. So, Nvidia will manipulate its distributors to keep them competitive. This guarantees low margins (but high margins for Nvidia!). It's less of a margin on the product, and almost a sales commission from Nvidia to the OEM.
did anyone from telco business side get laid off or all of the geniuses were moved to AI teams ?
I'm doing competitive analysis for Dell (ISG-team). Supermicro is outmaneuvering us BIG time. Just look at the latest IDC numbers (Q1 CY24). Dell Global Server revenue share 11.6%, making us the #1 (but declining over the quarters), Supermicro 9.2%, and currently #2 (steady increasing over the quarters).
So Supermicro is just 2.3 points aways from thaing the #1 spot. If you do the extrapolation it would take Supermicro 2 to 3 quarters to become the largest server provider on the globe, taking the #1 spot away from Dell.
If you looks at units the trend is the same, but the gap is bigger. This shows that Supermicro sells servers at higher Average Sales Price (ASP). This primarily drives by the high-end GPU mix, which is fueled by the AI-demand.
Where Dell is losing money in the Server/AI space, Supermicro has a very profitable business.
IDC is mentioning that many Enterprises (Dells' sweet spot) are moving to CSP's for AI due to the high upfront investments and ROI-models. This is the domain of Supermicro,. so they are well positioned to capitalize on the AI & GPU demands at the moment.
Check the IDC data if you don't believe me .
Post from TheLayoff.com
And one of the highest margin products we sell in the PowerEdge line is XE because we are not allowed to discount below the smartprice floor. Know what you are talking about before you post as you clearly don't
AS far as EMC goes. The Core Teams SU-K at selling storage and have been seeing storage market share decline rapidly as drives capacities have increased and are brought back into the server. Core Reps are also lazy as--s that want to sell transformation BS over everything else.
SuperMicro competes against us in many areas effectively where no services are necessary (like HPC or render clusters). XE equivalent Products are not an area where they do well. We have multiple deals where DTS Customers aren't even looking at other products. SuperMicro's XE equivalent are dog sh!t and have had a number of performance and heat related issues.
Dell being out-Delled
EMC no longer exists.