Dell Technologies is rapidly converting enterprise AI interest into infrastructure sales, adding 1,000 new AI Factory customers in its latest quarter.
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Dell AI Factory adds 1,000 customers as enterprise demand surges
Dell Technologies Inc. added 1,000 new enterprise customers for its AI Factory solutions in the last quarter, bringing its total to 5,000 as it pushes deeper into the on-premise artificial intelligence market against rivals like Hewlett Packard Enterprise and public cloud providers.
"Organizations that are thinking, ‘Well, I’m going to let someone else figure it out,’ given the pace at which we’re evolving the technology, they’re going to be left behind in perpetuity,” Arthur Lewis, president of the Infrastructure Solutions Group at Dell, said in an interview with theCUBE.
The customer growth coincides with a surge in Dell's AI server business, which saw revenue jump 342% year-over-year to a record $9 billion in its fourth quarter. The company entered its current fiscal year with a $43 billion AI server backlog and projects it will generate roughly $50 billion in AI server revenue this fiscal year, a 103% year-over-year increase.
The rapid adoption reinforces Dell's strategy to be the primary infrastructure provider for enterprises building on-premise AI, a market that 84% of organizations prefer for generative AI according to Dell's own research. For investors, this growing customer base and backlog de-risks near-term execution for Dell (NYSE:DELL), which has seen its stock rally over 89% year-to-date on the AI infrastructure boom.
From Hardware to Full-Stack AI
The customer momentum reflects Dell's multi-year transformation from a hardware provider to a supplier of full-stack data intelligence and orchestration solutions. The company has structured a comprehensive portfolio to manage the data that fuels AI models, spanning high-performance storage, GPU-powered servers, and pipeline orchestration. "You’ve heard about 100x token growth and that sort of thing; all that means is that data is becoming more valuable because it’s the fuel for these AI factories," Chief Executive Michael Dell said in a conversation with theCUBE.
Recent enhancements to its portfolio include the Dell Automation Platform for simplified IT operations and an expansion of its AI Data Platform. The latter includes unstructured data assets like ObjectScale and PowerScale, alongside a new high-performance parallel file system known as Project Lightning. This strategy directly targets enterprises' preference for a hybrid path, where sensitive data is processed on-premise for security and low latency. "That continuum I think is very logical and that extends all the way to the edge," said Jeff Clarke, Dell's chief operating officer.
An Expanding Partner Network
A key part of Dell's strategy is its "big tent" of collaborators, creating a broad set of integrated solutions. The deepest of these is with Nvidia Corp., whose chips are central to the Dell AI Factory offerings that combine Dell's server and storage infrastructure with Nvidia's AI hardware.
However, the company has deliberately expanded its alliances to provide customers with choice. This includes:
- Advanced Micro Devices Inc.: Dell's PowerEdge servers will support AMD's Instinct MI350P PCIe GPUs, targeting enterprises that want predictable performance for continuous AI workloads.
- Nutanix Inc.: A partnership to deliver turnkey systems for virtualized workloads, allowing compute and storage to be scaled independently, a critical factor as AI applications command more resources.
- Microsoft Corp.: The integration of Dell PowerStore into Azure Local enables customers to adopt a hybrid cloud solution without purchasing new hardware, while PowerScale is now available directly from the Azure portal.
- Red Hat Inc.: The two companies have created the Dell APEX Cloud Platform for Red Hat OpenShift, a jointly engineered solution to simplify running containerized applications and virtual machines on-premises.
This network extends to third-party software vendors like Virtana, which recently launched an observability platform for Dell AI Factory environments. Such tools make the platform stickier for enterprises and can help drive repeat orders, supporting the narrative of durable demand for Dell’s AI-optimized infrastructure.
This article is for informational purposes only and does not constitute investment advice.
[1] Dell AI servers add 1,000 new customers as the company fully pushes into the enterprise user market[2] The big tent: Dell’s expanding partnerships demonstrate strategic shift in enterprise infrastructure[3] Virtana Deal Highlights Dell AI Factory Adoption And Investor AI Expectations[4] Data intelligence powers Dell’s AI factory evolution - SiliconANGLE[5] Dell Stock Just Had Its Best Week Since 2024. The Odds of Another Surge Are...
