EMC analysis
Quick summary: Buy and hold. EMC's best days are very much still ahead of it.
EMC is clearly positioning itself to be one of the count-them-on-one-hand megaplayers in the IT infrastructure business. They are in deep with CSCO, LU, and NT and are aiming at a future that consists of a global optical network coupled to a pervasive storage infrastructure. The server is headed for commoditization (sorry, SUNW) and will be little more than a peripheral in the 21st century IT universe.
Reuttgers clearly has both the processor vendors (SUNW, IBM, etc.) as well as the NAS upstarts (specifically, NTAP) in his crosshairs. EMC has always stated that they were two years ahead of the competition. They're now saying they've moved to being three years ahead. The CLARiiON announcement, in particular, puts the EMC midrange in the same systems management class as the Symmetrix high-end. This squarely addresses the achilles heel of all the NAS vendors. Raw capacity is largely irrelevant (even though EMC now by far offers the highest capacity levels). The real key going forward is manageability and scalability of storage productivity. Storage is not a technology problem, it is a systems management problem and EMC believes it basically owns this space with their integrated solutions. This will become increasingly apparent as storage demand continues to ramp in the years ahead. Just as a stand-alone computer is little more than an expensive paperweight today, stand-alone storage will be viewed similarly going forward.
The theme of the launch "Escape Velocity" was, I believe, quite deliberately chosen. Reuttgers mentioned that EMC had achieved "escape velocity" but didn't specify from what. It's clear (to me at least) that the reference is to storage finally "breaking free" from its historical ties to a central processor. We are definitely entering the post-server era. |
