EMC predicts return to double-digit sales growth

Storage giant's EMEA chief claims downbeat first quarter results are as bad as things will get for EMC, and that normal service will soon resume

EMC has hit back at reports, in the wake of its recent downbeat financial results, which suggest the firm needs to urgently restructure its business.

The storage giant’s first quarter results saw the firm post sales worth $5.61bn, despite analysts predicting slightly higher numbers of around $5.74bn.

The results have seen the firm come under greater pressure from analysts and investors to consider breaking up, and spin-off its virtualisation arm VMware, which EMC owns an 80% share in.

At this week’s EMC World customer and partner conference in Las Vegas, the vendor appeared to pre-empt any questions about a prospective split by repeatedly emphasising in keynotes, press Q&As and breakout sessions the collective value all brands under the EMC umbrella provide.

As such, the company continually impressed on delegates how the individual parts of its business – which include VMware, Pivotal, RSA and VCE – all have a part to play in helping enterprises move to the hybrid cloud.

During a press-only session at the show, Adrian McDonald, EMEA president for EMC, alluded to the firm’s lacklustre financial performance, and claimed the next few quarters should see a marked upturn in its fortunes, while some of its competitors may continue to struggle.

“I never thought I’d face a time when IBM sales went down 12% in one 12 month period,” he said.

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“Our sales that are traditionally north of 10% and traditionally double digit, but they are not double digit right now. They were down to two per cent growth in the first quarter and I think we’ve reached the bottom of our slowdown and will accelerate from here.”

He also laid into Big Blue elsewhere in his presentation, when describing how EMC’s cloud strategy sets it apart from its competitors’.

“Amazon and Google have strong public cloud and do well in public cloud in Europe as well. However, for most enterprises, with legacy systems, public is a difficult option.”

And, according to McDonald, that’s why so many are opting for the hybrid approach, because it allows them to draw on their legacy IT investments, but tap into the public cloud as and when they need to.

“If you’re going to build a private hybrid cloud, you’re going to look for people with mass scale. IBM has mass scale, HP has mass scale, but you’re really going to focus on who provides the innovation and drives the choice and EMC is being seen as the innovator and arbiter of choice,” he continued.

“Candidly IBM, by the way, is the best marketing organisation in cloud today. When you go to customers, there isn’t an aggressive jump to use IBM.”



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