Traditionally viewed as a storage colossus, EMC packed over 4,000 worldwide customers and partners into Boston Conference Center, in the US, last month, along with 200 journalists from around the globe and hundreds of its own technical engineers to hammer home one message: EMC is now an ‘information infrastructure’ company.
“Information is at the core of EMC, not storage,” said a relaxed Joe Tucci in his keynote speech at EMC World 2006, held this year just a stone’s throw away from its headquarters in Hopkinton, Massachusetts.
Changes are afoot at EMC, but as the dapper chairman and CEO explained, the company’s horizons have shifted through both evolution and revolution.
On one hand, EMC has pursued an aggressive acquisition policy in the past three years, soaking up 20 different technology companies and spending US$4.5 billion in the process.
Data content management firm Documentum, backup-recovery specialist dantz, and virtualisation outfit VMWare — which EMC described as ‘one of the most successful software companies ever’ — are among the most notable. And the company is set to continue in the same vein, with Tucci now promising further acquisitions he believes will complement the firm’s shifting technology roadmap, beyond just storage, and allow it to accelerate its rapid product creation strategy.
“For now, the acquisitions we are looking at are in software and services,” Tucci claims, refusing to rule out a future systems or hardware acquisition.
Along with buying more companies, there is also the small matter of ramping up revenues, which grew by an impressive 17% to US$9.6 billion for 2005.
For Q106, EMC was delighted to report its 11th quarter in a row of double-digit revenue growth, recording a 28% year-on-year net income growth of 28% or US$380 million.
A break down of figures that stretch back to the turn of the millennium can be seen to follow the company’s subtle transformation from storage specialist through to information management vendor up to its present guise as an ‘information infrastructure’ company.
In 2000, systems storage made up 74% of its total revenue mix: by 2005, this had decreased to 47% — the rest is now split between software storage (37%) and services (16%). And, according to recent IDC figures, EMC is now the revenue share leader in the external storage systems and storage management software markets. So it clearly stands in a position of strength.
EMC’s figurehead, Tucci, revealed that he credits the company’s present success with a forward-thinking outlook: continue to innovate and don’t be afraid to disrupt yourself, is his personal mantra for business.
So, unsurprisingly, the storage giant is not prepared to stand still in a market it says has lots of room to grow.
Now is an important time for the newly-realigned storage powerhouse as it bids to stand out from the crowd, in particular burly competitors HP and IBM.
“2006 will see us introduce more products and invest in more innovation than at any other time during our history,”
he declared at EMC’s annual conference, which was attended by record numbers last month.
A sizeable US$1.2 billion will be plunged into research and development (R&D) this year, which Tucci proudly claims represents a significantly higher percentage than that of IBM.
“They spend around 5% of revenues on R&D, we are spending 11% on R&D. Ours goes 100% to the area that EMC is focused in. IBM’s 5% has to go into everything: chips, servers, database, software, storage, the whole lot,” says Tucci.
Warming up to his theme, Tucci admits that IBM is the company EMC is most concerned with, but stressed that the storage giant does not compete with any one vendor across its entire rack.
“When I talk about competition I have to talk about more than one tier. For strategy, it’s IBM. They compete in pretty much every place that we will and then they also have IBM Global Services and if they win an outsourcing contract, what do you think they do?,” Tucci asks.
But, confidently pointing to the example of R&D investments, he adds: “On our side, why we win more than we lose from them is because we are focused.”
When questioned further abo- ut how EMC tries to stand apart from the competition, Tucci insists that there are more companies making storage today than can possibly survive, shedding some light on EMC’s frenetic acquisition policy.
“I firmly believe that in most technology sectors, with the long-term spend required, no more than three companies can make money,” Tucci claims.
“After that you just have niche players. Some relatively successful; a couple of million dollars operations who hope to get bought,” he notes.