EMC 3rd Qtr Conference Call notes:
Background & results
 Global economy likes productivity it gets from IT spending, which constitutes > 50% of capital spending by companies in the USA.
 Spending on storage is becoming almost non-discretionary.
 EMC seeing accelerating revenue and profit growth; presently, EMC has < 20% of the $44 billion market this year.
 Storage growing at ~ 22%, whereas Server, PC and networking equipment is growing in the single digits; even handsets are growing at 16%. Bottom line, nothing in IT or high tech is growing faster than Storage.
 Driving this, in part, is the buildout of fiberoptic networks, which dramatically reduce bandwidth costs, increasing bandwidth, and increasing the storage requirements. The relationship between bandwidth and storage represents a “virtuous cycle”.
 EMC could have done better; because of parts shortages, they could have sold more systems.
 Exceeded all financial goals this qtr. Gained market share in ALL segments of Storage, and in ALL geographies around the world.
 Overall, 6 segments to the Storage market: High-end, Mid-range, Software, Services, Connectivity, & Network attached Storage. Altogether, these represent a $44 billion market. Only EMC presently provides a complete end-to-end solution for storage, from high end to low end.
 Storage revs increased the most in 5 years, 47% to $2.1 billion, despite a components shortage.
 Earnings increased 55% to a record $1.45 billion.
 Sustained a 34% Qtr sequential growth in NAS; the size of NAS will grow compounded annually at 75% between now and 2003.
 Yet, SAN growth annually will grow at ~ 90% between now and 2003.
 Customer satisfaction: EMC finished #1
 By 2003, EMC expects market to be $73 billion; EMC is growing faster than competitors, and expects market share overall to increase substantially during that time.
Q&A
 Components shortage: did not sell as many big systems as they could have; made up for this by increasing “upgrades” sales.
 Has the weak Euro affected EMC? Revenue growth in Europe increased 39% in this last Qtr, but could have been higher except for the weak Euro.
 IBM’s Shark systems have gained no ground on EMC.
 Comments on Competitive Threats: in all 6 Storage segments, EMC is either the leader, or the fastest growing company in each segment. EMC remains the only company that is found in ALL 6 segments.
 Little or no mention of Network Appliance.
Apollo |
