EMC to focus on channels and prices

BOSTON: Storage major EMC Corp., based in Hopkington, Massachussetts has gone through an almost complete transformation over these two years. Once predominantly a storage hardware vendor, it is approaching the half-way mark on software revenues, helped by acquisitions (Legato, Documentum and vmWare). With Legato, EMC now tops the storage software revenues list, ahead of Veritas. And the once 'high-end-equipment-only' vendor that admits to earlier arrogance and premium pricing says it's "market friendly" today, and has new entry-level products aimed at the SMB (small and medium business) market.

While the global or US definitions of SMB do not quite match those in India, its newer entry-level SMB products should help EMC expand its reach to mid-size enterprises in India, down from the very small number of large enterprises that are its customers today in the country.

The once-predominantly direct-sales company has been focusing on channel growth. Globally, it has a major OEM arrangement with Dell, which sells the Clariion line of ATA storage products, and now accounts for over 5% of EMC revenues. The same line is sold by Samsung in Korea. New 'channel-only' products includes the recent entry-level NetWin 110. The $7k (around Rs 4 lakh) Windows-based NAS box is the lowest-priced product in EMC's lineup, and is expected to ship into India by August.

Speaking to CyberMedia in an exclusive interview at EMC headquarters at Hopkington, CEO Joe Tucci said EMC was taking a number of steps to ramp up in the Indian market, "where we know we are weak". The steps included the conversion in 2003 of the Indian office to a subsidiary, headed by Manoj Chugh (the former head of Cisco India); and channel development, including new partnerships with SIs/VARs. EMC India has 25 people, apart from a 125-person development center that's rapidly growing in Bangalore.

In January, EMC signed on Redington as national distributor, with 10 resellers downstream; it also signed on Tata Infotech. Other partners who have been around for two years include HCL, Wipro, and Tata Elxsi.

To grab the small the midrange opportunities, a lot of EMC's global focus will be at the lower end of the market, the ATA-based devices such as the NetWin and Clariion, and the AX-100 EMC's low-cost "SAN in a box". In Q4/03, EMC shipped an impressive 14 petabytes of ATA storage (1 petabyte is 1,000 terabytes).

EMC, a leader in storage hardware, has also taken up the top slot in storage software, helped by its acquisition of Legato. In a global market valued by IDC at $1.8 billion in Jan-Mar 2004, EMC's share was 30%, ahead of storage software vendor Veritas (23%), and CA (9.5%), which has the integrated network/enterprise asset management suite, Unicenter. IBM and HP follow, at 7 to 8% each.

EMC has been growing at nearly 20% globally, excluding the impact of the recent acquisitions. EMC has 17% of its "addressable universe" of $41 billion, out of a global storage market of $50 billion (2003). It expects $8.1 billion in revenues in 2004.

Overall, storage is one of the highest growth areas in all of IT. Despite the rapidly falling cost of storage-as much as 35% a year, in cost per megabyte--storage capacity continues to outpace revenue growth. Capacity growth was nearly 40% in the Jan-Mar 2004 quarter, growing to 247 petabytes of external disk storage (1 petabyte = 1,000 terabytes). EMC topped the list at 20% share, taking the leadership position from HP (18%). IBM followed at 12%, Hitachi at 10% and Sun and Dell at 6% to 7% of the $3.5 billion global market in the first quarter of 2004. (Figures: IDC, Gartner, EMC)

Prasanto K Roy was in Hopkington, Mass., USA, as a guest of EMC