* Catching up with EMC's storage strategy
My meeting last week with several managers at EMC resulted in some interesting information. In the next three newsletters, I’ll share some of what I heard and suggest where all of this is likely to go.
First came the obligatory chest pounding: Revenue is up in every geographical segment, and overall corporate growth in the second quarter was 19%. In 2006 the company – now almost 25,000 employees strong – intends to grow at twice the market rate, which if most estimates are correct would give EMC a year-over-year growth rate of 14%.
EMC is on track to spend $1 billion in R&D this year, which of course puts it in a rather exclusive club – companies that spend more on R&D than their competitors take in annual revenue. Last year, EMC spent about 10% of its revenue on R&D.
By way of comparison, other storage members of this club include HP, IBM and Sun. According to those companies’ latest published annual reports, HP spent $3.7 billion (roughly 5% of its revenue), IBM spent $5.7 billion (roughly 5.9%) and Sun spent about $1.8 billion (roughly 16%) on R&D.
As for the future, EMC looks to be following a two-track strategy. First, expect information lifecycle management (ILM) to play a continuing role in most aspects of EMC’s storage planning. Secondly, as we have been predicting for a year now, EMC clearly is beginning to realize that there just may be life beyond storage. The overall goal, according to one of EMC’s spokesmen, is to move the company “from being a storage company to being an information management company.”
Let’s look first at ILM. ILM of course is all about efficiently moving data between the various tiers of storage in order to achieve cost efficiencies, while at the same time ensuring that data is retrievable according to established service levels. Also, however, ILM is all about cliches.
For instance, a standard set of cliches apply to ILM products and services from all the leading vendors, including EMC. All vendors admit, for example, that ILM is not a product, but rather is an assemblage of hardware, software and services. Alas, you and I can’t go out and “buy an ILM.”
That circumstance notwithstanding, however, EMC – again like its chief competitors – is prepared to make it easy for you to buy all your ILM-related hardware, software and services from a single source (guess who) should you want to do so.
EMC will make storage tiering easier through several new technology initiatives.
First, during the coming months look for EMC to roll out arrays that use low-cost Fibre Channel drives, which can be put in the same arrays as the higher performance Fibre Channel devices. This will be a cross-industry trend, similar in most ways to what is happening to serial-attached SCSI (SAS) and serial-ATA (SATA). Look for lots of silicon providers (Agilent, for one) to offer several low-cost Fibre Channel options, including 4 gigabit.
Next, expect EMC to make two key moves in network-attached storage (NAS): EMC will move the file virtualization technology it got through the Rainfinity acquisition to the front and center of its NAS marketing effort;, and the company will withdraw its largely unsuccessful NetWin line of NAS products.
Expect EMC to continue turning to many partners, particularly Outer Bay, for much of the “software glue” that ILM requires. And expect it to roll out a broader mix of consulting services aligned around ILM.
