What should we take away from EMC’s third-quarter financial results?
I am pleased that EMC showed growth in this challenging environment. Our strategy, balanced portfolio, operational model and ability to execute are paying off near-term and position us well for the long-term. While we need to navigate the shorter-term economic challenges, the longer-term secular changes offer us an opportunity to be really successful. The shifts to cloud computing, Big Data and trusted IT bode well for us, as we have been at the forefront of these for some time.
Cloud computing and Big Data are transforming IT and business. What’s driving customers’ interest in these major IT trends?
These trends are in full force because they enable companies to capture a better return on dollars invested in IT than ever before. Cloud architectures make the infrastructure more agile and efficient, while Big Data enables new insights that can help grow the top line – and all of this must be done in a trusted way. At EMC, we understand that the company that can best deliver this ROI wins, and we continually invest to make this happen. The result is innovative, practical, customer-focused additions to our product portfolio.
How is EMC helping customers address their IT priorities during times when spending is tight?
During times when spending is tight, our focus on high-priority areas of the data centre, like virtualisation, security and storage, serves us well. Customers needing to be extra cautious about where they spend their budgets first direct their dollars to high-impact areas and to the most cost-efficient technology within those areas – in other words, to best-of-breed offerings like our own.
The drive for greater efficiency and business value from IT extends beyond economic cycles and is gaining momentum as more customers shift more of their spending toward cloud architectures – private clouds, public clouds and hybrid clouds. Running a cloud infrastructure means leveraging pools of network, storage and server resources that are dynamically allocated to new and existing applications based on demand. This is not easy. As a result, most companies building clouds, either private or public, have neither the full set of resources nor the IP to build these architectures themselves. A few do, but the rest seek an infrastructure that can get them there without having to compromise on important enterprise-class features. These include capabilities like replication, to ensure data availability and business continuity; efficiency features, like tiering, deduplication and compression; backup with best-in-class recovery point and recovery time objectives; security that is agile and risk-based; and virtualisation, a key component for achieving the control, efficiency and choice clouds can deliver.
EMC’s approach, using our own internally developed software integrated with industry-standard hardware that has been tested and tuned, enables us to deliver value to the customer that we believe is unparalleled among our peers. This formula is in lock step with the transition to hybrid cloud and should keep us at the forefront of data centre infrastructure.
Does the channel remain a bright spot for EMC?
We have made enormous progress in truly teaming with our channel partners, and as a result, our channel program continues to earn accolades. In the third quarter, EMC was named a “Rising Star” by the Global Tech Distribution Council, and we won four “Company of the Year” Awards by CRN. With continued partner-centred innovation, like the third-quarter enablement of Velocity Distribution Partners to assemble VSPEX solutions for resellers, we expect to remain a favorite among our partners.
How is VCE doing?
VCE continues to do very well, as demand for Vblock systems showed strong growth in the third quarter. This was obviously helpful to our year-over-year growth in the third quarter, as the revenue from our components of every Vblock sold increases our storage and virtualisation revenue. Vblocks continue to gain traction both in enterprise data centres as well as in service providers, and we saw this in the third quarter. For example, a US-based chemical company purchased four Vblock systems as part of a solution that also included EMC Data Domain, EMC Avamar and EMC Atmos. A European insurance company purchased a Vblock system alongside several EMC VNX systems. And, a large construction equipment maker purchased Vblock with EMC Data Domain and EMC Avamar for data protection. Among service providers, CSC continues to expand their build out of Vblocks to power their public and private cloud businesses. Additionally, the second-largest telco in Japan, Softbank, will standardise on Vblock for their cloud-based offerings. Softbank is already using Vblock systems for their internal IT operations. In fact, 10 of the top 15 global telcos are now Vblock customers.
Any insight into the remainder of 2012?
Looking forward, we do not expect the economy to get better this year, but we do like how we have positioned EMC near-term and long-term. We have a strategy that is built to leverage the three major waves of change in IT – cloud, Big Data and trust. And, we have what it takes to execute on this strategy with leadership positions in storage, virtualisation and security, a best-of-breed product portfolio with breadth and depth that is unique in the industry, a global EMC team that is second to none, and a solid operational and financial model that has demonstrated success across cycles.
