EMC Corp. celebrated its 25th birthday this summer, making it one of the oldest independent storage companies on the block.
For a while there, the Hopkinton, Mass., giant got a little too comfortable in its pipe-and-slippers role and was slapped hard for it when the economy tanked and budgets froze during 2001. EMC posted a startling $70 million loss that year. Since then, it has revamped its hardware line with mid-tier and low-end systems and an archiving appliance, and is attacking the software market like a bull in a china shop.
Since the beginning of 2000, EMC has acquired no less than 12 software companies -- the juicier ones include backup vendor Legato, document management company Documentum, and server virtualization software player VMware. The latest acquisition was small-business backup software provider Dantz Development Corp. for under $50 million.
EMC's big challenge now is to integrate all these pieces and hope that it comes out ahead of rivals IBM, Veritas Software Inc., Network Appliance Inc. and Hewlett-Packard Co. with products that users want to buy.
Here's a closer look at EMC's strategy with Tony Asaro, analyst, Enterprise Strategy Group and Randy Kerns, analyst, Evaluator Group.In which areas is EMC strongest?
Asaro: From a storage perspective, EMC has the most comprehensive set of storage system solutions, including SAN, NAS, object-based and VTL. It has a huge head start in reference and compliance data with its Centera product. VMware is changing the computing environment. Virtual machines will have far-reaching implications that are only now beginning to be realized. I recently spoke to a customer that consolidated 16 Windows servers to one server running VMware and 16 virtual machines -- and the processor was still only hitting 30% utilization. This is game-changing technology that EMC needs to leverage on both the server and storage side. Kerns: Strong hardware products are EMC's forte, such as Symmetrix, CLARiiON, Celerra and Centera, and has a very broad storage management portfolio due to many recent acquisitions. Probably, its focus on "only storage'" has contributed to that strength. In which areas is EMC weakest?
Asaro: EMC is a distant second in the NAS space in terms of marketshare. It has done a good job with expanding its NAS offerings, simplifying management and offering gateway options, but now it has to make sure, as an organization, it focuses on marketing and selling NAS. EMC needs to build its professional services business to be a contender. IBM Global Services is the clear leader, and on many levels, can influence the customer's buying decisions. If EMC wants to be a total solutions provider -- they have to expand professional services to be a major force in the industry. Kerns: The areas that need to be addressed (by EMC and most other vendors) are the technologies for transparent data movement, such as a global namespace, and the association of business processes and applications with the value of data for storing in a repository. What is EMC's strategic direction?
Asaro: EMC is expanding beyond storage to become a total solutions provider. This is a transition that is occurring step by step. The acquisitions of Documentum, Legato and VMware are a strong indication that EMC is circling the wagons by offering solutions up and down the stack, and integrating solutions as they go. Historically, other large vendors have not done a good enough job of putting all the pieces together -- having different business units remain islands, and not leveraging one another as well as they could. It remains to be seen if EMC will be more successful at creating synergy and cohesiveness among its different groups -- making the sum greater than the parts. Kerns: Strategically, EMC is equipping itself with the capability to manage all the storage systems and move the data according to a set of policies. It hopes to be the primary provider to enterprises by providing the devices to store the data, and the software to control placement and management of this information. Where does EMC have an edge over its competitors?
Asaro: EMC has a large, aggressive and successful sales force, brand awareness, a huge installed base, Dell as a partner, and cutting edge technologies -- including Documentum, a leader in content management software, and VMware, a leader in virtual machine technology on Intel platforms. Kerns: EMC's edge comes from its focus and its ability to make quick decisions and to react. In which markets is EMC most challenged in terms of growing or maintaining its market share?
Asaro: EMC is being attacked on all fronts, since it is the leader in storage systems. Every step is a battle for them because they have multiple competitors, large and small, that are focusing on how they can take business away from EMC. Additionally, the storage environment is changing -- customers are implementing storage virtualization platforms in front of heterogeneous storage systems, storage management solutions are supporting heterogeneous environments, lower-cost solutions with high-end functionality are being built on commodity hardware -- all of which threaten EMC's legacy. Kerns: EMC has a low share of the small and medium-sized business market -- this is a relatively new market opportunity for the company.
EMC in the news
EMC to acquire backup software player, Dantz
EMC backs DoD consortium to accelerate open standards
EMC taps IBM veteran for CTO job
EMC chases NetApp with cheaper NAS devices and iSCSI support
EMC prepares to enter another new market
EMC opens doors wide for Centera
EMC Storage Router: Is it a bird, is it a plane?
EMC signs tape deal, reorganizes software business
EMC dodges question on Centera performance
EMC draws battle line with iSCSI
Expert advice on EMC products
-Question about replacing bad disks in EMC Clariion
-Question about intelligent switches and traditional box storage
-Question about SRDF in relation to Vertitas Volume Manager
-Question about migrating to CX330
-Queston about converting EMC Symmetrix to HDS Lightning
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