Embattled EMC Reorganizes into Three Divisions

EMC, the largest enterprise-class data storage provider, on Thursday announced its reorganization into three divisions to help combat weakening market demand.

EMC Corp., the largest company that only makes enterprise-class data storage technology, on Thursday announced its reorganization into three divisions as part of its recent shifting against heightened competition.

The new operating units are Storage Platforms Operations, Open Software Operations and Customer Operations, according to a statement released late Thursday by the Hopkinton, Mass., company.

This is the second move EMCs made to counter their decreasing market dominance. According to a report released earlier this month by International Data Corp., EMCs leading market share in the external storage market dropped to 21.2 percent this year. Rival Compaq Computer Corp. saw its share jump from 14.7 percent in 2000 to 15.4 this year, and IBMs share increased from 7.8 percent in 2000 to 12.2 percent in 2001.

The company also has been rocked by the struggling economy. EMC posted a net loss of $945 million in the third quarter, the first loss in 12 years, and during a meeting with analysts last month, CEO and President Joe Tucci said the company was going to change the way it approached both the market and its customers. It also announced plans to reduce expenses, including cutting 4,000 jobs.

"Were mad at ourselves that we slipped in execution," Tucci said at the time.

The Storage Platforms Operations group, run by Dave Donatelli, will combine the engineering and manufacturing divisions. Donatelli is now executive vice president; before the moves, he was senior vice president of corporate marketing and new business development.

Open Software Operations is responsible chiefly for AutoIS, the companys new storage management product, which officials say can manage competing vendors hardware—but only if those others, like IBM, Hitachi Ltd., Compaq and Network Appliance Inc. willingly participate. So far only Compaq, of Houston, has joined in, making the software very limited for the other companies. The group will be run by Erez Ofer, also now an executive vice president, who was formerly senior vice president and chief software architect.

Customer Operations is responsible for distribution and support. It will be led by Frank Hauck, who also runs direct and indirect sales, customer service and professional services, also as executive vice president.

The company also announced that longtime engineer and lead developer of EMCs high-end Symmetrix product, Moshe Yanai, has been made a fellow and will become Tuccis technology adviser, and that Chief Financial Officer Bill Teuber will also now be an executive vice president.