EMC's Tucci vows to keep up with new features

News Analysis

EMC's Tucci vows to keep up with new features

Dave Raffo, News Director
EMC CEO Joe Tucci admitted today that smaller systems vendors had beaten EMC to the punch on a raft of new technologies, but he expects to get caught up by early 2008.

Tucci was asked during EMC's earnings call with analysts if he sees companies who have recently gone public or have filed for IPOs as additional competition.

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"Yeah, sure, of course we see them," he said. "I have to give them credit. Most of those startups have come up with fairly innovative and good technology in its particular area. One startup [3Par] hypes the heck out of thin provisioning, another [EqualLogic] says 'I invented it for iSCSi,' another says 'I built it for Web 2.0.,' another one [Copan] says 'I do spin-down,' etc., etc. But what I'm telling you is that every one of those technologies -- with the exception of a Web. 2.0 -- we will build into all of our products."

EMC already offers iSCSI connectivity for storage area network (SAN) systems. Tucci said it will incorporate thin provisioning -- EMC calls it virtual provisioning -- in all its systems early next year. He said disk spin-down -- Copan and others call it MAID -- is also on the roadmap, as well as new systems specifically designed for Web 2.0 data centers, and small and medium-sized businesses (SMB).

He identified Web 2.0 companies and SMBs as two hot spaces where EMC has "two bits of nothing" now. While Tucci did not offer details, he presumably is talking about clustered storage when he refers to Web 2.0 data centers. Vendors, such as Isilon Systems Inc., BlueArc Corp. and ONStor Inc., have had success selling clustered systems to large Internet companies.

On the SMB front, EMC is expected to add systems with its partner Dell Inc.

EMC had enough bits in enough markets last quarter to increase revenue to $3.3 billion and net income to $493 million. Revenue rose 17% and income 77% from last year.

Financial services results mixed

Tucci noted an "air of caution" in a vertical where EMC has a lot of customers -- financial services. However, he did not paint as dire a picture as IBM did during its earnings call last week when it attributed a 13% decline in hardware sales on a drop in spending by financial services. He said a year-over-year decline in Symmetrix sales is not an indication of a slowdown in financial services.

"There's a lot of the unknown, and we all have to stay tuned, but in the financial services area we had all right growth -- nothing to write home about, but slight growth," he said. "When I talk to CIOs across the country, none of them tell me, 'Oh, my boss cut my budget going into next year,' but everybody's worried. There's an air of caution."

EMC's largest software competitor, Symantec Corp., also noticed mixed results in the financial services market. "We actually have not seen anything from our largest financial services customers that would indicate they are going to curtail their spending," said CEO John Thompson, during Symantec's earnings call last night. "However, we did see some of the midmarket customers pause or slow their purchasing decisions."


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