TO ALL, HOW TO REFUTE THIS? CAN WE?
To: jhg_in_kc (who wrote...)
From: rudedog Friday, Mar 5 1999 12:23PM ET
EMC has been doing a great PR job in changing the perception of their place in the market. If they can keep doing that, they will continue to do well for a while. But all the FUD will not change the underlying facts - they are targeted by the two biggest players in the market, they have been losing on a case by case basis to that competition, and that situation will get a lot worse for them over the next few years.
This press release actually lays out the case but you have to dig into it a little. In 1995, EMC had nearly half of the market for multi-vendor storage. Now they have about 20% of that market if we are generous. The 35% number which appears in the article is completely bogus - even if we assume that ALL of EMC's revenue falls into this category. The multi-vendor storage market has grown from about $4B in 1995 to over $15B in 1998 - IBM alone does over $7B. That market will continue to grow, and I agree with the article's $50B number in 2002.
So EMC will show good growth of maybe 35% per year if they meet their plan. But that will still leave them as #3, with a big gap between them and the #2 player, which will be either CPQ or IBM. But assuming that EMC can maintain their current share is unlikely, since they have been losing share to both IBM and CPQ over the last few years.
So reading between the lines, Ruettgers is saying "We have been losing share to CPQ and IBM over the last few years, but our new products will halt that trend, and the market is growing so strongly that we will show good growth even though we can not take much business from either of our main competitors."
The analysts as usual are clueless, since they can not tell the difference between EMC's mainframe replacement business ( a market which is not growing much) and their multivendor storage business. The storage business is complex. Should SUN count their storage sales on Solaris, since theoretically those systems could be used on other products even though almost none are? Should we count only SAN type systems? If so EMC has zero, since they just introduced their first SAN capable products.
Probably the most fair comparison would be either eliminate truly proprietary attached storage, and leave all the rest (which gives EMC less than a 20% share) or look at the SAN market only (which gives EMC zero at the moment but a reasonable story since they have similar products to IBM and CPQ who are the leaders).
And as I have said before, EMC is heavily disadvantaged since they do not have a linked systems play. IBM and CPQ, as well as SUN, will use that to cut EMC out of as much business as they can. |
