“We were over-aggressive”, admits EMC

5 February 2003 Storage giant EMC has admitted that it has lost customers over the past two years, as a result of charging too great a premium on some products and by focusing too much on its high-end storage disk system Symmetrix.

“During the [Internet] bubble we were very aggressive in extracting maximum revenues and margin and not building long-term customer relationships. We are humble and we promise it will never happen again,” said Chuck Hollis, European vice president of platform marketing.

Speaking at the European launch of its new line of Symmetrix Direct Matrix Architecture (DMX) products, EMC chief technology officer Mark Lewis added: “Two years ago EMC was a one product [Symmetrix] company”. But he said that EMC now has a broad portfolio of storage hardware and software products that have all been enhanced or revamped in the last nine months.

Analysts say that EMC needs to start selling large numbers of the new Symmetrix products quickly if it is to arrest its recent decline. In 2002, EMC reported revenues of $5.4 billion (€4.96bn), down nearly 40% on its peak in 2000. Its current share price is down by about 90% from early 2001, when investors were convinced that storage would be the one IT commodity that would not suffer in an IT spending downturn.

Analyst group IDC said that EMC lost its leading position in the storage disk systems market for the three months ending September 2002. IDC said EMC’s hardware revenues fell sequentially, by 21% to $505 million (€466m), in the third quarter of 2002.

This decline can partly be attributed to customers deferring purchases of Symmetrix until the new product is released. As a result, other analysts have forecast that EMC will bounce back in the high-end disk systems market in the current quarter.

The Symmetrix DMX products are based on EMC’s new “matrix” architecture, which the company claims delivers a “unique” mechanism for moving data between storage device controller cards, cache and hard disks. EMC claims Symmetrix DMX performs better than products from rivals IBM and Hitachi Data Systems (HDS).

“Assuming the data [of EMC] stands up to third-party validation, EMC clearly will have regained the performance lead for high-end storage arrays,” said Robert Passmore, an analyst at market research company Gartner Dataquest.

Meanwhile, in response to system giant IBM’s recent announcement, EMC has said that it will make its own software compatible with the Storage Management Initiative Specification (SMIS) before the end of 2003. The open-standards based SMIS (formerly known as Bluefin), is intended to enable storage management software to be used with all leading storage hardware platforms.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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