EMC news......increasing revenues from Storage Software
cbs.marketwatch.com
EMC states case for being tech elite
By Mike Tarsala, CBS MarketWatch
Last Update: 7:27 PM ET Oct 26, 1999 NewsWatch
SAN FRANCISCO, Calif. (CBS.MW) -- Mike Ruettgers, chief executive of EMC Corp. took the stage in San Francisco Tuesday to tout new software, as well as beefed-up strategic relationship he hopes will help his storage systems company to put its stamp on more corporate networks.
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According to Ruettgers, Hopkinton, Mass.-based EMC is among the few innovative companies that provide essential building blocks for electronic commerce. To be sure, EMC is one of the most successful stocks in the 1990s, sharing company with Cisco Systems Inc. as one of the greatest gainers on the Standard & Poor's 500 Index. (CSCO: news, msgs). Analysts cite EMC as a soon-to-be "blue chip" technology company.
"They have a $67 billion market cap; I'd say they already are blue chip," said Paul G. Fox, an analyst with Banc of America Securities in San Francisco. "Take a look at Compaq's $33 billion market cap, and we think of them as a blue chip."
For whatever reason, EMC (EMC: news, msgs) isn't always mentioned in the same sentence as the undisputed West Coast technology heavyweights, such as networking giant Cisco (CSCO: news, msgs), computer maker Sun Microsystems (SUNW: news, msgs) and database software maker Oracle Corp. (ORCL: news, msgs)
Ruettgers is out to make sure EMC always is included in the best of company. He says new software called ControlCenter the company started selling Tuesday, as well as a new alliance with Oracle will help EMC to be known a top-tier Internet infrastructure company. It also may help make EMC an unquestioned peer to the likes of Cisco, Sun and Oracle.
Not counting revenue from EMC's $1.1 billion acquisition of computer maker Data General Corp., completed earlier this month, Ruettgers' hopes EMC -- with less than $4 billion in revenue in 1998 -- will be a $10 billion company by 2001.
Expected to cost between $100,000 and $200,000 per installation, ControlCenter helps monitor, manage and tweak the network storage systems used by large corporations and Internet service companies. The software runs on Microsoft NT servers that can control a network of storage computers. Technical employees can control the system using an Internet browser.
"You won't see this coming from any other storage provider for a long, long time," said Jim Rothnie, EMC.'s chief marketing technology officer.
The software is similar in theory to applications by Computer Associates, IBM and Hewlett-Packard that control computer networks. But the EMC software controls only the storage parts of networks -- an area analysts say is of growing importance.
"There are three elements to online success -- storage, computing and communications, said Roger Cox, an analyst with Framingham, Mass.-based International Data Corp. And storage has been the focal point for success."
Software increasingly is becoming a larger part of EMC's total revenue. Ruettgers says the company has sold almost $700 million of storage software this year.
Ruettgers says the new software helps EMC -- a top storage hardware company -- become a more important electronic commerce infrastructure company by making its products central to the overall network. EMC is hoping that ControlCenter, along with its other key storage software, will be products companies can't live without.
"Once people put them in, there are no reasonable substitutes for them," Ruettgers said. "And they perform such a critical function."
How critical? Ruettgers sees his software as a key piece of the overall Internet building blocks. And he predicts that at least one major Internet ".com" service will fail in the next 12 months will fail because of poorly planned infrastructure.
"I don't think there's any question that this is going to happen," Ruettgers said.
In separate news that could bolster EMC, Oracle announced Tuesday it will form an EMC Strategic Business Unit, as well as a joint development operation with the storage company. It marks the first time Oracle said it will form a business unit catering to any company other than the computer makers it already serves, including Sun and Hewlett-Packard Co.
Mike Rocha, an Oracle senior vice president, said he didn't know the exact amount of the investment in EMC. But as many as 24 engineers will be working on EMC-related projects from Oracle's Redwood Shores, Calif. headquarters, he said.
More announcements are planned between EMC and Oracle, Rocha says. The companies will announce in the next few months that they have jointly developed what Rocha says will be the "largest data warehouse in the world." He wouldn't provide further details.
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