EMC's new president pushes growth agenda Source: SearchStorage.com Date: 18 January 2000
As its market capitalization soared over the $100 billion mark at the end of 1999, EMC Corp. deepened its management bench by naming computer industry veteran Joseph Tucci president and COO. Tucci, 52, is recently arrived from Wang Global, which he joined as CEO when the company was in chapter 11 bankruptcy and which he sold to and Netherlands-based Getronics NV for $2 billion last May. In the process, Tucci engineered 10 acquisitions and repositioned Wang away from computer sales and into services. SearchStorage.com editor Paul Gillin visited Tucci at EMC headquarters in Hopkinton, Mass.
SearchStorage.com: Why EMC?
Tucci: When we sold Wang Global to Getronics in May, I gave my word to the management that I would help assist in the integration. That went exceedingly well. Getronics' stock has gone from 33 euros to 77 euros since the sale and ex-Wang people now occupy over 40 of the top 50 positions there. Customer acceptance was fantastic and I thought my job was done.
I didn't want to do a turnaround again. I wanted to go to a company in a growth phase. I wanted to go to a company that's in and around the Internet. And I wanted to go someplace where I could apply what I've learned quickly and have fun. EMC met those metrics.
SearchStorage.com: You did a lot of acquisitions at Wang. Is that part of your charter here?
Tucci: EMC has been very aggressive [in that area]. In the last six months you've seen us acquire Softworks and Data General and I'd expect that to continue. In the last reported quarter, we had about $2.4 billion in cash and we have a market cap in excess of $110 billion. So we certainly have the currency to do acquisitions. I expect that's one of the things I can lend expertise with.
SearchStorage.com: What are you good at?
Tucci: I think I understand the industry. I came from a service company so I understand service. I understand P&L and profits. But I think what I'm best at is the people side of the equation. I would say that at Wang I was good at assembling groups of talented people and getting those people to work together.
SearchStorage.com: EMC has incredible profit margins. As you get into lower end markets, which are more price competitive, how will you maintain them?
Tucci: You have to differentiate in value. We invested close to $700 million in R&D this year; that's more than any other company in the storage business spends. Customers wouldn't buy these products unless they thought they were getting good value. We're about to be one of the top 10 software companies in the world. This not strictly a box company.
SearchStorage.com: How do you like to interact with customers?
Tucci: If you look at my last year at Wang, I was probably in the office less than 40% of the time. The rest of the time I was out with customers. And even the 40% of the time that I'm here, I'm often with customers in our briefing center or with our people who are seeing our customers in the field. It's easy for me because I like being with customers.
SearchStorage.com: There's no doubt that EMC owns the high end of the business. But at the low end of the business you have Dell, Sun, Compaq and others going after the same customers. How can you be successful there?
Tucci: One of the reasons EMC purchased Data General is the Clariion storage product line and some of the products that will come out behind Clariion. We're making a tremendous investment in Clariion. One of the advantages we have that Data General didn't have is that we have a lot of cash.
There's a tremendous amount of work we're doing in the networked attached storage market. Between those two initiatives, I think you'll see us much more aggressive in the middle market. We're very serious about becoming the leader in the network attached market. You can count on that in 2000.
SearchStorage.com: Do you think the SAN market is being held back by technical issues or do customers not understand it well enough yet?
Tucci: I think the storage-area network is becoming mainstream. Customers know they're never going to standardize on one environment and having information available to Windows NT, Unix and host environments in a manner that?s fast and manageable is recognized now.
In the network-attached market, a dedicated server devoted to storage management is a better topology than having each of your servers doing a little bit of storage management. We're in the Internet phase where more and more the applications are going to rely on the servers. That's coming into its own and the Internet is driving that.
SearchStorage.com: How fast is your market going to grow?
Tucci: I don't believe one forecast or another. History has shown that the most bullish forecasts of the last few years have been exceeded consistently. It's going to grow a ton.
We consistently see dot-com companies adding 60 terabytes a year. It used to take five years for a bank to amass that much. When you add to that the multimedia demand, the real growth hasn't kicked in yet.
SearchStorage.com: Typically, when you get to those sizes, the backup and maintenance issues become enormous. Tucci: And that's why we're commanding such high margins, because we're selling software that helps do things like backup automatically. We can take that off the IT manager's plate.
SearchStorage.com: What do you think of the emerging storage outsourcing market?
Tucci: I really don't want to comment on that yet, but it's one of the areas we'll be doing a lot of thinking about.
SearchStorage.com: If you look out a year from now, what would you hope people would say Joe Tucci did for EMC?
Tucci: I'd rather answer it another way and say a year from now, where will EMC be? Have we continued to be the clear leader in SANs and NAS? Are we seeing growth rates commensurate with what they have been, a place where employees want to work and one of the best performing stocks on the S&P 500? That's much more important than what people think I did.
SearchStorage.com: How do you like to hear from customers best?
Tucci: I'm an e-mail fanatic, but I like to see as many customers as I can in person. It doesn't matter, though. Any forum is fine.
SearchStorage.com: Would you publish your e-mail address?
Tucci: I don't want to get a zillion junk mails. Let's put it another way: there won't be a customer that we have that won't have my e-mail address. |
