Interesting article on EMC, even if CEO Ruettger's predictions are little self serving
(my bolding below)
Reprinted for private use only
EMC sees $10 bln in revs by 2001 as pace quickens
NEW YORK, Aug 7 (Reuters) - Corporate data storage leader EMC Corp. believes the company's long-term
growth rate will accelerate and it can produce revenues of $10 billion in 2001, well ahead of prior projections,
an EMC spokesman said Friday.
For EMC, with revenues of just under $3 billion in 1997, to reach the $10 billion mark, the company's
growth rate must quicken to around 37 percent a year from its current pace of 30 percent or slightly above,
spokesman Mark Fredrickson said.
The spokesman was detailing comments made by EMC Chief Executive Michael Ruettgers on Thursday at a
meeting with Wall Street analysts visiting EMC headquarters in Hopkington, Mass.
''Ruettgers made a statement of confidence about reaching $10 billion by 2001, which would require a growth
rate ahead of where we are now,'' Fredrickson told Reuters in a phone interview on Friday.
Fredrickson said the company expected the higher growth -- 37 percent by his calculations -- to come from
both organic growth of the company and possibly through acquisitions.
But he cautioned that the higher growth rate was a three-year prediction and that the company was not
boosting its near-term guidance to Wall Street, which remains around 30 percent or better, year-over-year.
''We are very optimistic about the business,'' Frederickson said. ''Business is better than it's ever been and
demand is extremely strong,'' the spokesman said as he noted that, ''We expect at least 30 growth to
continue'' in the near-term.
EMC has produced 30 percent growth in both revenues and profits for each of the last five quarters and has
gone on record saying it can continue to grow at that pace or better.
Growing at 30 percent or so, it would take until 2002 for the company to hit its goal of $10 billion in
revenues, the spokesman noted.
EMC attributes the expected acceleration in its growth to the rapid adoption of so-called enterprise storage
networks, or Storage Area Networks (SANs).
SANs are an emerging means of storing massive volumes of corporate computer data by linking local
computer networks directly to data storage systems, instead of managing data storage through centralized
computers known as servers.
SANs are an extension of Local Area Networks (LANs), which have typically been used to manage data
traffic over local networks instead of requiring data to be controlled in remote locations and transmitted
over long-distance networks.
EMC is only now beginning to introduce products to create SANs, including the necessary network
technology for intelligent managing and switching of data between computers on a network and EMC
storage systems.
By decentralizing data storage and localizing it nearer to the computer user, EMC estimates that SANs will
reduce customer data-processing requirements by 35 percent and cut the amount of traffic running over its
computer networks by 35 percent, resulting in greater overall computer system cost savings.
A little-appreciated fact is that corporate data storage systems account for 40 to 60 percent of spending on a
typical corporate computer system -- far more than the separate costs for computers, software, network
equipment and the services necessary to install and maintain such complex systems.
Ruettgers made several other predictions at the Thursday session with analysts, the spokesman said.
He said he expected a major corporation to fail as a result of an extended computer crash or a loss of critical
customer data not properly stored and copied as a safety precaution.
He also forecast that by 2001, each of the world's largest 100 companies will store a petabyte of data on its
computer systems.
A petabyte is one quadrillion bytes of data, the equivalent of 250 billion pages of text, according to EMC.
EMC shares, which hit a high of $53.125 on Friday morning, retreated in early afternoon trading to $51.875,
up 50 cents on the day. |
