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EMC: Reading the ROI tea leaves

Analysts theorize about ROI and vendors make promises about ROI. But customers may have other ideas. IDC analyst Robert Gray sees the current malaise afflicting storage giant EMC -- first quarter revenues were $1.3 billion compared to $2.3 billion for Q1 a year ago -- as partly the result of stiff competition from companies like IBM and Hitachi but also as a symptom of an industry that may have gotten out of touch with customers.

"For several years, vendors like EMC have been very successfully selling storage -- now all of a sudden they have hit the wall," observes Gray.

"If, in fact, the most sophisticated end-users can understand TCO then there is a disconnect," between what EMC is selling and what people are prepared to pay for, he notes.

Gray suspects that customers were "overstuffed" with storage and now are deciding to take a closer look. "In some cases people are deliberately husbanding their storage resources now," he says.

In its defense, EMC has lots of research, including an ROI white paper. But Gray is not alone in suspecting a sea change in storage consumption.

As Marc Farley, author of Building Storage Networks, 2nd edition, and a frequent commentator on SearchStorage.com, noted in a January article, the real lesson of the storage slowdown may be that IT adminstrators do have some degree of control over the growth of stored data. And that discovery may continue to ripple through the industry.

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MORE INFORMATION:

Read the EMC white paper on ROI here

For more ROI white papers take a look at SearchStorage's white paper section on TCO/ROI

Tip: A look beyond ROI and TCO

Ask Expert Marc Farley your own storage networking questions


  • Alan Earls often writes about things NAS and SAN in his weekly "SAN/NAS Update: Trends" column. View the latest
  • About the author: Alan Earls is a freelance writer in Franklin, MA.


    This was first published in May 2002

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