EMC Rides Refreshed Storage Line to Record Q1 Revenue

By Chris Preimesberger  |  Posted 2011-04-20 Print this article Print

VNX and VNXe storage leads way to Q1 2011 consolidated revenue of $4.6 billion, a Q1 record increase of 18 percent compared with 2010.

Earnings reports from storage and data protection giant EMC may be getting somewhat repetitive each quarter, but they are certainly not ho-hum for EMC management, employees and shareholders.

The Hopkinton, Mass.-based corporation on April 20 again reported revenue that exceeded Wall Street projections to go with healthy profit margins, as it has for a string of quarters.

First-quarter 2011 consolidated revenue was $4.6 billion, an increase of 18 percent compared with the year-ago quarter, a Q1 record for EMC. First-quarter GAAP (generally accepted accounting principles) net income climbed 28 percent year over year to $477.1 million.

During the first quarter, EMC expanded its gross and operating margins substantially compared to 2010.  The company recorded operating cash flow of $1.1 billion and ended the first quarter with $9.5 billion in cash and investments.

Income from sales of EMC's enerprise-level Symmetrix storage arrays increased by 25 percent over Q1 2010, and the company's mid-tier storage line grew revenue by 20 percent.  Revenue from VMware, majority-owned by EMC, was up 33 percent, and revenue from EMC's RSA information security business grew 8 percent. 

EMC is among a growing number if IT companies cashing in on a clear trend: Corporations large, small and midrange-sized are ramping up their tech investments following two to three years of little or no movement in IT refreshes.

EMC, which is phasing out its Clariion and Celerra storage arrays and replacing them with its new-generation VNX and VNXe products, said it is getting good responses from many of its current and potential customers, despite what could in reality be a forklift-lift changeover from the old systems to the new ones.

"One of the real successes we had in the quarter is the FAST (fully automated storage tiering) VP, which is on both (VNX and VNXe) systems," President and CEO Joe Tucci said on the conference call. "Of course, when you start tiering like that, you remove the need for the customer to buy separate high-end, midtier, and low-end system because you can get all those benefits in one architecture.

"If you have a farm of big Symmetrixes or VNXes, probably the least expensive alternative for you at this point (to upgrade) would be to add more SATA drives and use the FAST technology to move data very quickly, very efficiently to that lower tier. We're seeing in real customer instances three times the performance using FAST."

"But this (FAST software) does blur the lines a bit (between the product lines). Do the lines overlap a bit? Yes they do, and that's intentional, because if you leave a gap, that's where competitors drive," Tucci said.

EMC also reported better-than-anticipated revenue growth for inline deduplication maker Data Domain, its new Isilon Storage Division, and Greenplum data warehousing/analytics.

Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on Salesforce.com and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and DevX.com and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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