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Technology Stocks : EMC How high can it go? -- Ignore unavailable to you. Want to Upgrade?

To: Bill Fischofer who wrote (10222)	5/16/2000 7:54:00 AM
From: John Carragher	Respond to of 17183

Dow Jones Newswires -- May 15, 2000 Brazil Telcos Still Are Driver For EMC Data Storage -CEO Dow Jones Newswires SAO PAULO -- Technology companies chalking up their fast growth in Brazil to the privatization of the telecommunications sector have become a cliche, but for data storage market leader EMC Corp. (EMC), the telco sector is still the main business driver, Chief Executive Officer Mike Ruettgers said Monday during a press conference. Ruettgers, who acknowledged that Latin America only accounts for 3% of EMC's revenues, said he is still interested in meeting with Brazilian businesses, and in particular wants to hear what mobile phone operators have to say. He said EMC is trying to catch up with demand in Brazil, which accounts for two-thirds of EMC's Latin American revenues - and where in the past five months the company has more than doubled its staff to 130. "The reason we haven't been getting more business is that we haven't had a presence for a long time," he said. In contrast with Latin America, where the company has been active since 1997, EMC started operations in Asia in the early '90s, now deriving 10% of revenues from that region. EMC in 1999 had revenues of $135 million from Brazil, up 167% from 1998, which in turn had seen growth of 170% over 1997, the company's first year in Brazil. Between 40% and 60% of revenues come from telecommunications companies, said Brazil chief technology officer Hermann Pais. EMC's CEO, as its country managers, aren't shy about bashing competitors, mainly International Business Machines Corp. (IBM), noting that EMC has more personnel devoted to data storage in Brazil than all other rivals put together. "IBM said that they had revenues of $150 million from data storage in the last quarter," Ruettgers said. "That's how much we spent in R&D in the same period," he said, adding that EMC plans to spend $2.5 billion in research and development between 2000 and 2001. The CEO declined to quantify the revenue increases to be reaped from its recently announced partnership with Oracle Corp. (ORCL) and Cisco Systems Inc. (CSCO) - the other shining stars of Internet technology and infrastructure - other than to say that "It will make it easier to get to the $12 billion target" for 2001 revenues. EMC had 1999 revenues of $6.7 billion. The boom in dot-com upstarts that is fueling growth for EMC in more developed markets hasn't yet translated into a significant portion of EMC's business in Brazil, where clients are still mostly blue-chips. However, this year EMC should see an increase in sales to manufacturing, Internet and retail firms, said Brazil marketing director Celso de Oliveira. The company, with a 44% market share in Brazil, sells about 20% of mainframe products and services and 80% for machines running Unix and Intel servers, said Brazil country manager Armando Carvalho de Andrade. The main competitor - asides from IBM, which has roughly a 28% market share - is the corporate culture among Brazilian firms, who haven't yet understood the integration services provided by EMC, de Andrade said. "They still think we sell magnetic disks," the executive noted. Ruettgers downplayed the correction of valuations for dot-com companies and technology firms in general experienced lately. "It's probably healthy," he said, citing overvalued dot-coms. And although the stock prices of companies such as EMC and Oracle have suffered, "The strong technology companies will simply get stronger," predicted an optimistic Ruettgers. -By Margarita Palatnik; Dow Jones Newswires; (5511)813-1988; mpalatnik@aol.com