EMC Corp. CEO Joe Tucci gave his version of the state-of-the-storage union address Tuesday morning, forecasting that data storage spending will outgrow overall IT spending this year despite choppy economic waters and the impact of a hard drive shortage. He also highlighted the data storage trends he expects will generate the most interest this year.
Speaking on EMC’s year-end earnings call, Tucci also said 2012 would not be his last year as the vendor’s CEO. At the urging of EMC’s board, he has changed his mind about giving up that post at the end of 2012.
Tucci said he expects IT spending to grow at approximately 3% to 4% this year, compared to EMC’s estimate of 7% growth in IT spending in 2011. However, he said analysts forecast a higher rate of spending for storage, data protection and other related technologies.
“We have no doubt that the global economy will remain choppy as it has for the vast majority of 2011,” Tucci said, before listing what he believes will be the popular storage technologies of 2012.
“IT spending in storage and data protection will grow faster than the IT industry average, and IT spending for security, ‘big data’ storage, big data analytics, virtualization, data center OSes and cloud device virtualization automation will grow significantly faster than the IT average,” he said.
Tucci lays out EMC’s 2012 storage initiatives
Tucci said EMC will be busy with “robust product launches” this year, beginning with its PCI Express (PCIe) server-based flash cache product in two weeks. He said the vendor will also increase the speed and scale of its Data Domain and Avamar backup products, and tighten integration between the two. On the storage system side, EMC will launch a new VMAX enterprise system, refresh its Isilon clustered network-attached storage (NAS) and VNXe small- and medium-sized business (SMB) unified storage arrays, and upgrade the software and functionality for the VNX midrange array this year. EMC reported revenue of $5.6 billion last quarter, up 14% from the previous year. Its 2011 revenue of $20 billion increased 18% over 2010. EMC said it added 2,000 VNX customers last quarter, and Isilon clustered NAS sales more than doubled from the previous year.
For customers concerned about hard drive shortages, Tucci said he expected constraints on drives throughout the year, especially high-capacity nearline drives. EMC and other storage vendors notified customers last month that prices of hard drives will increase 5% to 15% temporarily due to flooding in Thailand, and Tucci said customers will face longer lead times than usual.
“There’s potential for availability constraints to improve in the second half of 2012, and given our strong relationship with our main [hard drive] vendors, we at EMC expect to be relatively better positioned,” he said.
Although they didn’t tie the rise of flash to the hard drive shortage, EMC executives said the amount of solid-state drive (SSD) capacity sold on its high-end VMAX system last quarter doubled over the previous year.
Tucci said EMC will continue to build its sales channel after making great strides there last year following the end of its sales partnership with Dell.
“Having Dell as a key partner made it difficult to attract the variety and kind of channel partners we need to go the other way,” Tucci said. “So what we’re focused on is saying, ‘OK, the Dell divorce is finalized, so to speak, and we need you, we want you. There’s a lot of things we can still do better and we’re dedicated on this path.”
Tucci didn’t say how long he will remain CEO, only that he will serve into 2013. He had planned to relinquish the CEO job at the end of 2012 and remain chairman for two years.
“From a personal perspective, I have never been more energized and excited by what this great company can accomplish,” he said.