Has the bubble burst for enterprise storage products? Is there a way to grow in the increasingly competitive storage technology market? EMC managing director Steve Redman gives us his views.
You've said that information has become an "entity on its own". What does this mean?
Knowledge management is the goal. The "Progression to Knowledge Management" is therefore key. Data, in its rawest form, is nearly worthless. Information, which when correctly shared, protected, and managed can then become knowledge, a company's most critical asset.
As we see organisations starting to realise the true value of their information, they will start to define, design, and build their IT infrastructures considering their information first, as a separate entity to their servers.
There is now recognition that there is value in information. For example, with NAS [network attached storage], information is stored on the network and can be accessed from anywhere, with CAS [content addressed storage], it is networked archived information.
Your Web site says "EMC is the world's automated storage leader" despite the fact that, according to IDC figures, you're behind Network Appliance in the NAS market, and behind HP in the SAN [storage area network] market. How can this be?
The IDC report looks at the storage hardware market, storage software market, and storage services market separately. Each category is evaluated, measured, and reported on individually. When EMC--and our customers--consider the market, we look at one entire automated networked storage market, including Software, Services, SAN, NAS, CAS, and switches. When you look at the whole picture of the Automated Networked Storage market (which IDC doesn't do), EMC has a global market share of over 40 percent. Clearly, this puts us in a leadership position.
What is EMC's market share in Australia?
If we look at reports from IDC and Meta Group on the Australian market, EMC has 25 percent of the entire storage market (including software and switches). However, if we look at the automated networked storage market (excluding Direct Attached Storage), which is where we focus, EMC has 45 percent market share. Again, this clearly puts us in a leadership position.
How are you planning to take market share away from HP, IBM, and Network Appliance?
We're not just planning on it. We're doing it. Right now. Last quarter our new business placements doubled, which was double the quarter before. These wins are coming from somewhere, and they're certainly hurting someone. In 2003, we're going in with the best channel partners, the best-in-class products in every single segment, and the best people. Simple.
A year ago, our product portfolio consisted of a few best-in-class high-end products. We have taken this commitment to excellence and applied it across all of the segments we now play in. As of 2003, we have best in class at both the low and high end, in SAN, in NAS, in CAS, and the only open, heterogeneous management software tools available on the market today.
What is the biggest advantage EMC has to offer customers? Is it price? Or technology?
There is not one single instance where EMC has gone into a true "bake-off" against the competition where EMC does not have a better TCO. I have asked the question "Why EMC?" to our top 10 customers, and nine out of 10 say it is our ability to implement what is actually sold. It is therefore no surprise that our C-SAT (Customer Satisfaction) results are consistently in the mid-'90s.
I don't believe it's a question of price vs technology. Customers want both the best price and technology, and then the technology to be fully utilised.
EMC has talked about extending AutoIS capabilities to other EMC products, along with those of other vendors, in a phased rollout--where does that process stand currently?
Today, our AutoIS ECC Open Edition manages more of competitors' storage than their own software does. So once again it is not just talk--we are delivering.
How does EMC's AutoIS differ from Hitachi Data System's TrueNorth?
AutoIS is a great strategy, just like True North is a great strategy. The difference is we are currently delivering real products and solutions under the AutoIS strategy, just like ECC Open Edition, which arguably manages HDS products better than anything they have developed to date.
HP's Carly Fiorina has accused EMC of not having the capital to invest in the R&D necessary to be competitive in key markets. What is your response?
EMC has US$5 billion in the bank. We have one of the healthiest balance sheets in the entire industry. Annually, we spend more than 14 percent of our global revenue on R&D--more than the rest of the entire storage industry combined spends on storage R&D. Once again, more hot air from one of our competitors.
What kind of R&D does EMC do in Australia? How much is spent?
We don't give out a local break down of R&D spends. But in 2002, EMC launched a $20 million Customer Support Centre that was opened as a fully functioning service centre and a healthy component of this is focused on software development. This ensures that our customers get higher returns on their investments while reducing the technology risk.
How much of a threat do you see Hitachi Data Systems' and Network Appliance's coming high-end network-attached storage products?
We are now a company that operates at the enterprise level, at the low end, and more than ever in the mid-tier, each with NAS and SAN. We have formidable competitors in every segment that we operate in. HDS and NetApp compete against us, with some good products, in one or two of those segments.
EMC is now a year into its partnership with Dell. With each partner expanding its own line of products, and lowering prices, won't increased competition complicate the relationship?
Globally, and in Australia, the EMC/Dell partnership is one of the great marriages this industry has seen in recent times. Locally, David [Miller, Dell MD] and I don't see anything but it going from strength to strength. There is no competition between EMC and Dell.
EMC recently spun off the company Diligent Technologies to handle its CopyCross product because the product no longer was "directly aligned" with EMC's automated network storage goals. Are other current technologies likely to be shed?
For SEC reasons, even if I knew I couldn't tell you. If I did, I'd have to kill you!
You've no doubt been asked this a million times . . . so we're sure you have a great answer: when do you expect storage sales to begin to pick up again?
As you are no doubt aware, year-on-year, everyone in the industry's been down, but throughout the past year, EMC in Australia and Asia Pacific have been solid. Even though the high end has slowed, the mid-tier business is really strong. From all indications, 2003 looks like the year we'll pick up again, but more at the back end.
What percentage of EMC's revenue is derived from software-related products? How do you see that changing in the future?
We were 20 percent--we plan taking it to 30 percent.
We've heard rumours of a major announcement to be made by EMC this month. Any chance you can tell us what that is about?
Throughout the 1990s, EMC had the benchmark product with our legendary Symmetrix. We were first in mainframe. First in UNIX. First in NT. But, we were monolithic. Now, we are revolutionising the storage industry yet again. DMX (Direct Matrix) architecture will, once more, set the benchmark for this decade.
About EMC
EMC arrived in Australia in 1986 and has grown to include offices in Sydney, Melbourne, Brisbane, Canberra, Perth, Adelaide, Auckland, and Wellington. EMC works with all corporate partners including NCR, Sequent, SGI, ICL (Fujitsu), SNI, and Unisys, and alliance partners including Oracle, Informix, Sybase, Baan, SAP, and PeopleSoft.
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