Dell just shared some reality checks regarding the industry’s push toward Windows 11. In its latest financial report, the company revealed that the shift to Microsoft’s newest operating system is lagging significantly. The current transition rate sits about 10 to 12 points lower than the pace the market saw during the last major OS cycle.
Because of this slow uptake, Dell expects PC sales to remain flat throughout next year. The problem isn’t just interest; it’s hardware. Roughly 500 million existing PCs cannot run Windows 11 due to strict hardware requirements. However, these machines still work perfectly fine for daily tasks. As a result, companies are delaying replacements, affecting sales across the board—from standard desktops to smaller mini PCs.
While laptop sales stall, Dell’s infrastructure business is booming. Revenue from servers and networking increased 37% year over year. A massive appetite for Artificial Intelligence drives this growth, with orders for AI-focused systems hitting over $12 billion in the last quarter alone. Buyers are eager to replace aging server fleets with denser, more powerful hardware to handle heavy AI workloads.
This demand creates new challenges, though. Memory and storage requirements are driving up system costs, and component prices are high as manufacturers prioritize AI components. Dell plans to lean on supply chain strategies it developed during the pandemic to navigate these shortages. The company told investors it has the flexibility to adjust pricing, change configurations, or steer buyers toward alternative products when supply tightens.
Financially, the strategy is working. Dell recorded $27 billion in quarterly revenue, an 11% annual increase, and forecasts over $111 billion for the 2026 fiscal year. Even partners like Nutanix reported growth as customers move away from VMware, though they also warned that memory shortages could limit expansion. For now, the trend is clear: businesses are spending their budget on backend infrastructure rather than employee laptop upgrades.
