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NEW YORK—Storage specialist EMC Corp. will lower its prices, enter new markets and continue its efforts in software interoperability, officials said at the annual Analysts Day here.
The plans are fueled by the recent and pending $1.3 billion acquisition of backup and monitoring vendor Legato Systems Inc. and by the mildly improving economy, CEO and President Joe Tucci said.
“The next generation of products will come out of the gate at a lower cost than the products theyre replacing,” said Dave Donatelli, executive vice president of storage platforms operations.
EMC will achieve that goal through manufacturing and testing efficiencies and by having dual sources for its supply chain, he said. “Were going to dramatically lower our costs and costs to market. Were going to bring out new products faster … than youve ever seen us do before,” he said. Such products will cross all of EMCs hardware realms, including lower-end products such as the Clariion CX200 manufactured and sold by partner Dell Inc., Donatelli said.
Tape products are also on the Hopkinton, Mass., companys road map, he said. “What were working on now is deciding whether to partner here or to resell,” he said.
There will not be an acquisition for that, Tucci added, in a separate interview.
For storage management, “by the end of the year our Clariion and Symmetrix lines will have full SMI compliance,” Donatelli said. EMC officials have previously said that, although the Storage Networking Industry Associations Storage Management Initiative itself is still under development.
Mark Lewis, executive vice president of open software and chief technology officer, also reiterated prior company promises: that EMC will use volume management and multipathing technology to enable future advanced functions, such as storage fabric virtualization.
Next page: Legato plugs holes.
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Also in software, “the addition of Legato has really filled every single hole” in EMCs feature matrix, he said.
Overall, EMC currently gets 54 percent of its revenue from hardware, 22 percent from software and 24 percent from services. The previously stated goal of a 50-30-20 ratio is still intact, likely by the end of 2004, Tucci and CFO Bill Teuber said.
Regarding Legato specifically, “if we execute properly here we can be a disrupter to the way the whole backup market is today,” Tucci said. But as for EMCs future acquisitions, expected by the industry to be related to systems management to keep pace with Mountain View, Calif., rival Veritas Software Corp., “Really Im going to take the fifth here. … Theres no win to tell you where our thought process goes,” he said.
EMC is spending its large cash reserve on buying back stock and is pondering paying dividends, he said. “The spring in the EMC step is back,” he declared.
Despite the rosy picture painted today, EMC still has a long way to go, especially in software, said financial analyst Shebly Seyrafi, of St. Louis-based A.G. Edwards & Sons Inc. “Theres a difference between having a presence in those businesses and filling those businesses,” he noted.