EMC Focuses On Software, Services, Dismisses Rivals

After two days of meetings with EMC execs, analysts left Boston feeling better about the data
storage giant’s longterm prospects but frustrated with the lack near-term guidance on growth, margins and pricing.

In a note to investors, Golman Sachs (GS) said it is “comfortable” with the company’s leadership position in the sector, “maybe even a bit more so than before.”
However, GS added that the “lack of complete clarification on immediate concerns is going to act as an an overhang on the stock.”

Like other hardware manufacturers, the Hopkinton, Mass., company, has seen revenue and earnings slide as customers cut capital budgets. EMC’s stock is hovering
around 20, well off a high of 104 in September.

Denied specifics, GS and other analysts speculated that demand in the current quarter would be similar to its June quarter, one of its worst.

GS did applaud several EMC initiatives intended to help spur growth and improve the bottom line. They include: a greater focus on software and services (which has
better profit margins) from 36 percent of revneues to 50 percent by 2003; the introduction of new 181GB hard drives; a new approach to sales, whereby staffers
are more responsive and has some pricing flexibility.

While the sales force may be kinder, and gentler, execs were downright nasty in speaking about their competitors.

Frank Hauck, the company’s sales chief, was quoted as saying “Look at NetApps. Now stick a fork in ’em. They’re done.” CEO Joe Tucci went
after other rival such as IBM , saying the company was giving away its Shark data storage products like the toys in McDonalds Happy Meals.

While brash, the company also regularly added the caveat that its optimism was based on the belief that the economy would pick up. Tucci said he has a “Plan B” to
further cut costs if it doesn’t, however he would not offer any specifics. In May, the company laid off 1,100.

Shares of EMC dropped 0.21, or 1 percent to 20.25 in midday trading.

Get the Free Newsletter!
Subscribe to Cloud Insider for top news, trends & analysis
This email address is invalid.
Get the Free Newsletter!
Subscribe to Cloud Insider for top news, trends & analysis
This email address is invalid.

Latest Articles

Vulnerability Scanning, Vulnerability Assessments, and Vulnerability Management: What You Need to Know

Vulnerability scanning, vulnerability assessment, and vulnerability management offer different approaches to security. Learn how they work together.

Cloud Storage Pricing in 2023: Everything You Need to Know

Cloud storage pricing is complex. Learn the basics of cloud storage pricing and how to find the best deal for your business.

Flash vs. SSD Storage: Is there a Difference?

Many people use the terms “flash” and “SSD” interchangeably when discussing solid state drives (SSDs)—even experts. While the two technologies are very closely related,...