....We hear a lot from our competitors and their audacious claims that we are losing ground and that's why we are cutting our margins, but in June Gartner came out with data showing that we gained 4%, HDS lost ground and IBM managed to claim a percent of a percent....
No wonder Hitachi and IBM have been quiet lately.
IBM comes closest to EMC in terms of having the full package of systems, software and services; but, the last time I checked, IBM and Tivoli were still fighting over control of the storage management software space. Not surprisingly, Tivoli has lost market share each of the last two years.
HDS does not even register in the top 10 of storage management vendors. Putting Sun and HDS together maybe get them to the same league as HDS in 10th place.
EMC: Fighting hard and making gains
Wednesday 1st August 2001 Jack Of Hearts
Having made cut backs and become the centre of some slanging matches between vendors, EMC's VP of Global Alliances, Don Swatik, decided to explain to IT-Analysis exactly what's going at the storage giant. It seems that all is well although pressure is undoubtedly mounting.
I get the impression that EMC is a company under pressure. It seems to be cutting staff, cutting prices and fighting very hard to stave off the increasing onslaught of competition. Is that something that you can identify with?
If you look at EMC I think you'll find that we are actually doing pretty well compared with this tech sector as a whole. Our customers are facing the same problems - the economy is slowing down - and we are all working together to make sure that we come through this the best we can.
Overall we have reduced our sales margins because of the economy. We hear a lot from our competitors and their audacious claims that we are losing ground and that's why we are cutting our margins, but in June Gartner came out with data showing that we gained 4%, HDS lost ground and IBM managed to claim a percent of a percent. We are still leading and we will continue to do that.
HDS seems to making a good job of getting positive exposure recently. HDS made an IPO announcement that got it plenty of face time with the analysts but then that attention dropped off. The fact is that despite what you might have heard, we have replaced three times as many HDS and IBM accounts with EMC kit as we did at this time last year.
I've heard people say that EMC is the Microsoft of storage - 'everybody hates you but you don't care.' What do you think of such allegations?
I think I take that very seriously indeed. But I don't really think it has any grounds. Seriously, if you talk to our customers you will find that really is not the case. This is just something perpetrated by our competitors because we are a very competitive, leading edge company. But our customer service is something that we invest huge amounts of money in. We always have, and we always take it extremely seriously. I would like to point out that we are the leaders in the technology industry - quite possibly every industry to be honest - when it comes to customer service.
I notice you published your Customer Service Matrix recently. Why did EMC do that? They used to be considered the EMC crown jewels.
This was just another dimension to our strategy of promoting the extent of the service that we offer. We always used to be very protective of our customer service matrix because it was a competitive advantage. But that was while we developed it. Nowadays, nobody could possibly match our customer service matrix so we were quite happy to get vocal about the wide ranging coverage that we have. We just decided to put it under our customers, and our competitors, noses.
What about the claims that EMC isn't anywhere near as open as it would like us to believe?
The majority of that comes from the competition, EMC supports far more than anyone else in the industry. And if you can get us all round a table to discuss proof points I will do that but you'll find that the competition won't. Why? Because they don't have the proof of support that we have. We are the most open storage vendor across the board and we will support lots of vendors. You have to realise that we have some 88 companies writing to our API's they are the de facto standard and nobody in the industry today can touch something like that. Nobody.
Is there more that we can do? Yes of course there is and we are working on that everyday. You will see an ongoing development from us - this is a continuous voyage. When competitors say we aren't open I challenge you to ask them for proof points because I'll stand up against any of them and argue this point because they are not as open as EMC. We aren't perfect in this respect but we are leading the way - in both hardware, software and the way that it all integrates.
But the competition is hotting up. What about the recent HP acquisition of StorageApps?
As you well know, this is an industry that survives on buzz words and visualisation is just another one of them. But that's been around for a decade. The first Symmetrix we shipped did it, and we have virtualised all sorts. But again this is a journey and we continue to work on these technologies. Something we learned very early is that you can't stand still in this industry.
Tell me about your programme of openness?
We are a very open company as whole and spend an awful lot of time embracing and leading industry programmes. We have been driving The Fibre Alliance and all sorts of industry initiatives. We spend a lot time and effort trying to pull vendors together so that we can establish standards for the industry. The ISCSI programme is driven by David Black, an EMC guy.
And what else do you do?
Our overall programmes are expanding. A month ago we had seventy five partners - now we've got 88. We've got a strong heritage in these kind of relationships and they continue to expand every day. It you look at our API programme, every back-up vendor around uses these to make use of our TimeFinder product.
Is that where CA fit in?
CA is in the back up space and that's what this deal was all about. We've had a long relationship with CA and we were very pleased that they decided to work with us on this solution. They will use our API's and our TimeFinder product. This is just a further example of the work that we put into this industry.
Has the integration of DataGeneral gone well? I understand there were a few staff gripes?
The DG acquisition and integration has gone very well indeed. Within six months we had new products out of the door and a year later the 4700, which has been extremely successful.
Naturally mergers and acquisitions throw challenges at you, particularly management challenges. But you expect this from any acquisition. Now that we are a year or so down the line however everything is working very well indeed, we are thrilled and so are our customers.
Presumably they aren't too thrilled that put up the prices on many of the DG products though?
That isn't true at all. We had to put up our prices as the proposition changed, Our customers were saying to us, 'Great, now you can provide us with mid-range products with high-end support.' And that's exactly what we've done. Clariion is now fully supported across our entire support network, it's also become a very active part of API programme - and all of this costs us money and adds value to the products. Further to that, we are investing millions in the R&D efforts of the DG products.
How come you never put SRDF onto the Clariion - is it because you'd never sell another Symmetrix?
Not at all. The Clariion boxes have their own products and solutions that are optimised of the mid-range. They have SnapView and MirrorView which are very strong products in this area. You have to realise that Symmetrix is the core, high-end product with a lot of its own solutions that are optimised for this kind of activity, Clariion is for mid-range operations and, again, it's got a very strong set of products that are optimised for this kind of work.
How much are you investing in R&D this year?
We are pouring $1 billion into R&D this year - $750,000 million of which will be going into software developments.
How are your relationships with the resellers?
I think our relationships are good right now and they are getting better. Since acquiring DG we have brought more relationships on board and we've been working on developing these. So far they are working extremely well.
Do you think that your partners appreciate the aggressive EMC attitude. I've heard that EMC likes to claim the big deals for itself?
That isn't something that we do, but we are certainly a very aggressive company. We don't sit around waiting for things to happen and our partners know that as well as we do. Our partners tend to be very aggressive companies too and, naturally when you put two aggressive companies together, you get friction. But we tend to work together very well indeed - that's why we have these relationships and that's why companies want to resell our solutions.
Don't your services and consulting, which I understand you are developing further, tread on their toes somewhat?
If you look at our business model we are software, hardware and services - the services grew by 70% last year. And we continue to develop these offerings. Our customers have been asking for this stuff since 1999 when Storage Area Networks hit centre stage. They saw how this could help them and needed the knowledge and experience to help hem understand and implement these solutions. However, that doesn't mean that we don't involve our partners in this activity because we do - and there is plenty of this work around too.
We spoke to Gary Bloom recently. The CEO of Veritas, and he seemed to think that your kit was under utilised because you stuff your accounts so hard.
That's simply not true at all. That's just a marketing rouse by our competitors. Our utilisation rates are 70-80%. Home Depot came out recently and said that it had 90% utilisation on our machines. This is actually over and above the industry norm.
What about the software side?
If you ask who is number one in storage management software it is us. We keep making gains and this year is no exception, we are already making considerable gains over the number two vendor, Veritas, and that will continue.
I've also heard about EMC undercutting the competition very severely. How can you do this? Are your solutions over priced?
We have had IBM and Sun trying to compete with us with products that are a third of our price but the customers keep voting with their dollars - they like our proposition. They know that by buying EMC they are buying into big benefits over and above the competition. It may well be cheaper for customers to buy somebody else's kit in the first instance, but by the end of that year buying an EMC solution would work out far more cost effective. By buying into EMC they get the single most comprehensive customer support available anywhere in the world, they get the further support of our rapidly expanding API programme and they get world leading solutions. It may appear expensive on the face of it but, as any company that uses our solutions will tell you, EMC products are undoubtedly the low cost option for companies. Our storage management software alone can save the cost of employing people to deal with this. And we keep investing in this stuff to make sure that it gets better.
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