Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Yamakita who wrote (13729)	1/11/2002 7:52:43 AM
From: Gus	Respond to of 17183

Good article. A well-known part of EMC lore is the way that Dick Egan and Michael Ruettgers burned the boats behind their troops not just once, but twice to stay ahead of the curve: in the late 80s (mainframe storage) and in the mid-90s (open systems storage). Their choice of Joe Tucci to take over the company and continue hardwiring that tradition of reinvention makes a lot of sense given what he accomplished at Wang. Rare is the company that succeeds in a restructuring. Rarer still is the CEO who actually succeeds in reviving and engineering growth in a bankrupt company. .....The president and CEO of storage leader EMC came on board at Wang Global in 1991 at its nadir—when the midrange computer manufacturer was in the throes of Chapter 11 bankruptcy. “You saw a great company that owned office automation, word processing and e-mail, and obviously lost its way,” he recalls. “By that time, Wang had lost so much lead, it would have been impossible to catch up.” Wang’s dilemma gave Tucci a valuable lesson in keeping a company on the edge. “One of the things you learn is that what got you there won’t keep you there,” he says. “You’ve got to keep pushing the envelope every day.” To revive Wang, the company was totally reinvented into a network-and- desktop service provider. With this strategy, Tucci guided Wang out of bankruptcy. The company went on to acquire 10 companies from 1995 to 1999, and to reach 20,000 employees and $3.5 billion in revenue by June 1999, when it was acquired by a Netherlands-based IT services company. On a separate note, the EMC website has an excellent tour of their ControlCenter Open Edition framework which currently consists of the WIDESKY middleware, 9 Open Integration Components, Workload Analyzer and StorageScope. Of note is the Replication Manager module in light of this excerpt from the most recent SSB report. emc.com Highlighting the numbers: - Replication accounted for 42% of EMC Software's 2000 revenue, or $600M out of $1.435B. - SRDF accounted for 30% of EMC Software's 2000 revenue, or around $430M out of $1.435B. SRDF is EMC's first software product. It was developed after the 1993 WTC bombing and was introduced in late 1994. When SRDF came out, traditional Backup & Restore products accounted for more than 80% of the Storage Software market. While still a healthy market, Backup & Restore accounted for only 44% of the 2000 market primarily because of the rapid growth of market segments developed by EMC and other companies. Backup & Restore is expected to account for only 34% of the 2005 market again due to faster growth of other market segments. - Replication is 20% of the overall Storage Software market. It is expected to grow from $967M in 2000 to $3.3B in 2005. The overall Storage Software market is expected to grow from $5.3B in 2000 to $16.7B in 2005. - EMC's Replication market share is 58%. The next 3 vendors combined only have 19%. SSB report (1/4/2002) excerpt: 4) EMC Dominates Disaster Recovery. Expect to see Disaster Recovery (DR) demand significantly increase post the September 11 attacks. EMC is the clear leader in DR. Replication has been one of EMC's most valuable assets generating about 42% of its software revenue in 2000, according to Dataquest. SRDF (EMC's core DR technology) accounted for about 30% of its software revenue in 2000. Note: Disaster Recovery (DR) is a subset of replication; in other words, DR numbers roll up into replication numbers; said another way, replication numbers include DR. According to Dataquest, EMC's replication software has dominated its segment with a 58% market share in 2000, while its three closest competitors combined represented only 19%. EMC has an even greater share of the DR market. According to Dataquest, EMC grew its replication revenue 38% in 2000. EMC's tight hardware/software integration and its long experience in this market will enable it to continue to lead this segment for many years. Expect replication to be one of the fastest growing storage software segments. Dataquest projects replication software will grow from $966.9 million in 2000 to $3,323.2 million in 2005, representing a 28.0% CAGR (note: these projections do not include the storage subsystems and networking equipment needed to build replication). Replication software represents about 20% of the total storage software market. Further, as bandwidth and disk prices decline, the investment needed to run a secondary site for disaster recovery decreases.