EMC's revenue of $4.02 billion for last quarter was ahead of the $3.98 billion estimate of Wall Street analysts; during the Wednesday earnings call conference, EMC execs said they expect to exceed their previous 2010 guidance of $16.5 billion for the year.
"As we have said before, we at EMC expected and planned for our recovery in 2010, but we always believed it would be choppy," said EMC CEO Joe Tucci. However, he added, "the U.S. market continues to be good with good prospects."
Revenues from EMC's high-end Symmetrix rose 32% from last year, which chief financial officer (CFO) David Goulden attributed partly to the V-Max product "addressing customers' needs as they build out their private cloud infrastructures." He also said that FAST tiering software -- introduced first for Symmetrix -- is driving a higher rate of adoption for solid-state drives (SSDs). Goulden did not provide specifics of SSD revenue, but said EMC shipped more SSD capacity per system and a higher percentage of systems shipped with solid-state drives in the quarter.
"We plan to extend our success in the midtier to the faster growing lower end of the market with a new product family featuring EMC's market-leading technologies, and a price that will be very competitive in this space," he said. "We expect to formally introduce it very early next year."
Greg Richardson, an analyst at Technology Business Research (TBR), wrote in a research note that he expects the new systems to fall between EMC's Iomega consumer platform and the larger Clariions.
"TBR expects the new product offerings to act as a bridge between EMC's Iomega offerings, which are targeted at consumers and very small businesses, and its midrange Clariion solutions," Richardson wrote. "TBR expects EMC to use the new lineup as a lower-priced entry point into new accounts, particularly in high-growth, yet price-sensitive, emerging markets."
In the past, EMC's products in the lower end of the midtier and SMB market were usually in partnership with Dell Inc. But Dell now has its own platform in that space -- its EqualLogic iSCSI SAN -- and is expanding its own storage platform with technology acquired from Ocarina Networks and Exanet.
"We continue to believe that Dell continues to look to expand its internal presence in the storage market, especially with EqualLogic, which our checks suggest could increasingly flow through Dell's direct channel," wrote analyst Aaron Rakers of Stifel Nicolaus Equity Research in a note to clients.
Still, EMC's Tucci said his firm's partnership with Dell is "back on track" and he expects year-on-year growth in products sold through Dell in the second half of this year.
EMC execs did not give a timeframe for a higher-end midtier Clariion refresh, which many in the data storage industry expected earlier this year -- perhaps with some integration with the Celerra NS multiprotocol platform.
"You want to know when we are going to introduce the high end of midtier?" Tucci said in response to a question. "I have to have some surprises in life. So, I'm not going to give you that one."
He did say any midtier hardware refresh would be proceeded by a software rollout, consisting of features EMC promised at EMC World: a Unisphere upgrade with the ability to manage Clariion and Celerra, a new FAST version with sub-LUN-level tiering, FAST Cache to speed solid-state drive performance and block compression for primary storage. EMC's Goulden said these features are coming this quarter.
Kaushik Roy, a financial analyst at Wedbush Securities, said he expects EMC to maintain its sales momentum, especially with its enterprise platform.
"We believe EMC's V-Max remains, by far, the best product line in the high-end storage systems market," he wrote in a note to clients. "Hitachi [Data Systems] will refresh its high-end storage product this year, but we don't expect this to put much of a dent on EMC's V-Max."