He got this right....
Hardware will always be a growing
component of the storage industry,
but software will be substantially more
important as companies continue to
accumulate storage hardware.....
....According to Jon William Toigo's
The Holy Grail of Data Storage Management,
"For every dollar that a company spends
in storage hardware, it can expect to
spend ten times that sum in management
costs." Data must be continuously and
efficiently managed - which is where
software plays a crucial role...
...but his analysis fell apart
in 2 and 3. Here are the numbers:
EMC Software (17% of 1999 revenues)
1998 1999
1Q $ 66.0 $155.4
2Q 97.9 178.6
3Q 117.5 206.9
4Q 164.3 281.0
Total $445.7 $821.9
Note: EMC Software should be assessed
as part of EMC's Infostructure architecture
which includes products like the Celerra
file-server (40% sequential growth, $300
million) and the Connectrix (44% sequential
growth) SAN product line.
Veritas (100% of 1999 revenues)
1998 1999
1Q $ 39.1 $ 71.9
2Q 48.1 114.6
3Q 56.5 183.4
4Q 67.1 226.2
Total $210.9 $596.1
Note that VRTS closed the Seagate's NSMG
and Telebackup acquisitions at the end of
March 1999.
I have shares in both EMC and VRTS so aside from
being a shameless plug for both stocks, I just
want to make sure that in these mo-mo times,
nobody tags EMC with the erroneous mainframe-
storage-is-dead or software-over-hardware
misconceptions. Also, up and until the Data
General acquisition, EMC has targeted the
high-end (mainframe, Unix, NT, Novell)
while Veritas has targeted small to middle
markets (Unix, NT, Novell). Data General's
SAN/NAS products may represent the first area
of direct competition for EMC and VRTS outside
of the dotcoms (13% of EMC's 4Q revenues), but
the storage market is expected to boom for a
long time. There is plenty of room for these
two quality companies in a corporate market where a
storage-centric view of technology as a way of future-proofing is fast becoming the conventional wisdom. |
