EMC rides storage sales wave as cash keeps pouring in

Tucci's tower looking impregnable after strong Q1

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It was another stonking quarter for EMC. The storage giant reported an impressive $5.09bn in sales for the first quarter of its fiscal 2012 year, with profits of $587m, up 23 per cent on a year ago – ker-ching!

EMC execs were, well, very pleased indeed, with CFO David Goulden saying in canned remarks: "We are well on our way to achieving the financial potential of 2014 consolidated revenue of over $28bn, which represents compound annual revenue growth of at least 13 per cent from 2010."

This quarter is, EMC trumpets, its ninth consecutive quarter of growth at greater than 10 per cent for revenues and net income, quarterly revenue having grown 11 per cent year-on-year.

EMC's big bets on big data and cloud computing are paying off. Chairman Joe Tucci, in his twilight CEO year, said: "We are in a time of unprecedented IT and business transformation, propelled by the benefits of cloud computing, big data and trust. EMC is off to a strong start to 2012 and is exceptionally well-positioned to help customers take advantage of these major transformational shifts."

Take-away points include:

  • EMC’s mid-tier storage products increased revenue 26 per cent year over year.
  • Isilon scale-out NAS business nearly doubled its revenue annually.
  • There was strong growth in VNX, Backup Recovery Systems, and the Greenplum portfolio.
  • The RSA Information Security business increased revenue 19 per cent annually.
  • VMware revenue grew 25 per cent annually (EMC owns an 80 per cent stake).
  • Vblock customer adoption of increased significantly year-on-year.

EMC said it experienced strong customer demand for its services, not saying whether that demand grew or diminished compared to previous quarters. The Documentum content management products were not singled out in its results release, suggesting that the extension of these products into cloud services has not yet borne fruit.

Geographically Europe was a relatively weak spot.

  • EMC’s revenue from the United States increased 11 per cent annually to $2.6bn, representing 52 per cent of consolidated first-quarter revenue.
  • Non-US revenues increased 10 per cent annually to $2.5bn.
  • Asia Pacific and Japan region revenues reached an all-time record level, growing 20 per cent year on year.
  • Europe, Middle East and Africa revenues were up 6 per cent year-on-year.
  • Latin America revenues were up 2 per cent annually.

Eurozone financial worries and recessionary fears seemed to have slowed EMC sales growth in that geography.

The company thinks that consolidated revenues are expected to meet and potentially exceed $22bn for 2012. We might expect that VSPEX will help drive this and an expected VMAX refresh could help revenues at the high end of the product range, as will EMC's server flash initiatives – VFCache and the Thunder project.

EMC is sitting pretty at the top of the stand-alone storage product and information management software heap with no other company providing anything other than scattered competition at various points along its product range. Tucci's tower is looking solid as a rock and unassailable. ®


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