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E M C CP (EMC)

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NYSE \ Technology \ Data Storage Devices

EMC Corporation (NYSE: EMC) is a leading American manufacturer of software and systems for information management and storage. EMC produces a range of enterprise storage products, including hardware disk arrays and storage management software. Its flagship product, the Symmetrix, is the foundation of storage networks in many large data centers. The CLARiiON line of storage arrays was acquired in 1999.^[1]

1 Company Analysis
- 1.1 Products and Offerings
- 1.2 VMware Criticism of MSFT
2 News Feed
3 Risks
4 Leadership
- 4.1 Executive Team
- 4.2 Compensation and Ownership
5 History
6 Research Links
7 Options
8 Notes

Today

Max

Funds w/ EMC:	295
Rank:	108 / 351

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Company Analysis

EMC is the global leader in the US$ 50 billion worldwide storage marketplace.^[2] The company has been rapidly growing in storage software and other software domains including security and document management, which in turn drive demand for the company's storage products. It has been an aggressive buyer of complimentary firms in an effort to broaden its product line and continue growth. Despite its successes in software, EMC relies on its core hardware business for a substantial portion of revenue and profit. Complimentary software sales and professional services contracts often stem from the company's flagship storage hardware products.^[2]

EMC competes with the likes of Network Appliance, Hitachi Data Systems, Hewlett Packard, IBM and numerous other smaller firms.^[2]

According to the company, EMC and its subsidiaries develop and deliver open, flexible information infrastructures, offering a wide range of systems, software, services and solutions that help organizations extract greater value from their information and get the most out of their information technology (IT) assets. EMC develops solutions for customers to manage information intelligently based on its changing value to an organization over time. With a strategy known as information lifecycle management (ILM), EMC believes it helps individuals and organizations store, manage, protect, secure, move and share information to collaborate, solve problems, save money, exploit new opportunities, comply with regulations and policies and improve operational results. ILM is expected to also simultaneously lower the cost and reduces the risk of managing information, no matter what format it is in � documents, images or e-mail � as well as the data that resides in databases. EMC also provide specialized virtual infrastructure and resource management software. Virtual infrastructure helps organizations respond to changing IT requirements by dynamically altering their computing and storage environments with flexible virtualization technologies. Resource management allows organizations to better understand, manage and automate the operation of their information infrastructure. The customers for its products are located worldwide and represent a cross-section of industries and government agencies. Their customers use their products and services in conjunction with a variety of computing platforms, storage systems and software applications that support key business processes, including transaction processing, enterprise resource planning, customer relationship management, data warehousing, electronic commerce, content management, regulatory compliance, business intelligence, e-mail and web hosting. It was incorporated in Massachusetts in 1979 and is headquartered at 176 South Street, Hopkinton, Massachusetts.^[3]

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Products and Offerings

The principal segments comprise EMC information storage products, EMC multi-platform software, EMC services and VMware. The EMC Information Storage Products Segment is composed of information storage systems and platform-based software. Information Storage Systems offers a wide range of networked information storage systems to meet the specific needs of its customers in terms of performance, functionality, scalability, data availability and cost. Its information storage systems can be deployed in a storage area network (SAN), networked attached storage (NAS), content addressed storage (CAS) or direct attached storage environment. Our portfolio of systems ranges from the EMC CLARiiON AX100 system on the low end to the EMC Symmetrix DMX-3 3000 system on the high end. At their respective price points, EMC believes that its networked information storage systems offer the highest levels of functionality, performance and availability in the information storage market.^[3]

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VMware Criticism of MSFT

On February 23, 2007, VMware published on its website a White Paper critical of Microsoft's licensing and distribution terms. In it, VMware states that Microsoft was trying to restrict customers' flexibility and freedom to choose virtualization software by limiting who can run their software and how they can run it. It also said that Microsoft is leveraging its ownership of the market leading operating system and numerous applications that are market leaders in their respective categories (Exchange, SQL Server, Active Directory) to drive customers to use its virtualization products, and that its tactics are focused on software licensing and distribution terms (for SQL Server, Exchange, Windows Server, Vista) and through the APIs and formats for virtualized Windows. It went on to say that, in particular, Microsoft did not have key virtual infrastructure capabilities (like VMotion), and that they were making those either illegal or expensive for customers; Microsoft doesn't have virtual desktop offerings, so they are denying it to customers; and that Microsoft was moving to control this new layer that sits on the hardware by forcing their specifications and APIs on the industry. It also included explanations with supporting details of some of these specific areas. ^[4]

The sessions of the White Paper were:

Support for Customers
Prohibitions on Running Microsoft Virtual Machines on Third-Party Virtualization Software
De-Activation of Microsoft Virtual Machines on Third-Party Virtualization Software
Prohibition of Translation or Manipulation of Microsoft VMs into Other Formats
Licensing Restrictions on Server Virtual Machine Mobility
Prohibitions on Desktop Virtualization
Closed Windows Virtualization APIs

VMware was featured in a lengthy article in The New York Times technology section on February 24, 2007. I focused on the VMware and its campaign against Microsoft, including mentioning the White Paper. It referred to VMware as "a young Silicon Valley company, the early leader in a fast-growing market for what is called virtual-machine software. And that puts it on a collision course with Microsoft, the industry's Goliath." It reported that Microsoft CEO Balmer, in meeting with corporate customers in New York last month, said,"Everybody in the operating system business wants to be the guy on the bottom," and that he vowed that Microsoft would "compete very aggressively with VMware." When quizzed on Microsoft's plans, Mr. Ballmer replied, "Our view is that virtualization is something that should be built into the operating system."^[5]

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News Feed

08/21/08 8:08 am	EMC Unveils Solution Designed to Help Financial Institutions and Creditors Comply With FACTA Red Flags Rules and Prevent Identity Theft (PR Newswire)
08/20/08 10:08 pm	Lightning Round: Home Depot, BP, VMware and More (at CNBC)
08/20/08 3:08 pm	VMware shares sink as investors lock in profits (AP)
08/19/08 10:08 am	Getting Ready for the Bull Rush (at Motley Fool)
08/19/08 9:08 am	Mad About Options: How Wal-Mart Wins (TheStreet.com TV)
08/19/08 8:08 am	Tech stocks look for direction in early trading (at MarketWatch)
08/18/08 5:08 pm	Options Know-How: Wal-Mart (at TheStreet.com)
08/18/08 4:08 pm	Be Better Than Buffett (at Motley Fool)
08/18/08 8:08 am	[video] Mad About Options: How Wal-Mart Wins (at TheStreet.com)
08/15/08 12:08 pm	Brocade Sends Strong Signals (at Motley Fool)

More News...

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Risks

Market risk

EMC's strategy is to grow through acquisition and a severe drop in the company's stock price, relative to other firms, might limit its ability to continue to acquire and consequently grow.^{[citation needed]}

Integration

EMC has made numerous acquisitions in the past several years including firms, now separate subsidiaries or units, such as RSA security, VMWare, Legato (a unit), Documentum (unit) among others. Integrating cultures, sales channels and disparate technologies remains a challenge and can effect quality and the perception of EMC in the marketplace as a trusted brand.^{[citation needed]}

Competition

The storage marketplace remains a well-funded and lucrative business attracting global conglomerates such as Hitachi, established leaders such as Network Appliance and HP and smaller VC funded startups that all want a piece of EMC's market share.^{[citation needed]} EMC has been a leader for well over a decade and staying on top is increasingly challenging.^{[citation needed]}

Competition with partners/Scope

EMC has been an aggressive player in software, consistently moving up the 'software stack' into the applications domain. The company's acquisition of Documentum in particular often puts EMC in a position of competing with firms that are excellent partner candidates. This bold strategy has raised the caution flag at some partners and also placed EMC out of its comfort zone of storage infrastructure in some customer situations. The company's strategy could backfire, opening the door for more focused competitors to attack EMC's core market.^{[citation needed]}