Executives say they understand Canadian caution on cloud computing. At the same time, the company is increasing partnerships with cloud service providers

EMC’s cloud strategy

Traditionally, Canadian organizations are slow to adopt technology and cloud computing is no different.

But the country manager for EMC Corp., which sells storage and virtualization solutions, isn’t frustrated by our conservatism.

“It doesn’t because the whole ‘big bang’ approach to go [entirely] to the public cloud is a difficult approach to make,” Michael Sharun, said in an interview Wednesday at the EMC Forum, a day-long seminar in Toronto to showcase its solutions.

 “And it’s not in our nature to do that. We as Canadians, we try things, we explore, we dip our feet in the water. We don’t ‘big bang’ anything.”

And, he added, its EMC’s job is to provide organizations with core competencies before they move into the cloud.

“You need to clean up your own house and have it operating efficiently before divesting yourself of your applications.”

When he talks to companies and governments about cloud computing their main concerns are trust and security, he said, which echoes surveys done by research firms such as IDC Canada.

But, he said, “the reality is the cyber threat is very sophisticated and it comes at organizations whether the data is in-house or outside of the four walls.” Organizations that have good data protection solutions should be prepared, he said. 

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EMC’s cloud strategy also embraces service providers who supply the data storage and virtualization organizations use to take advantage of software- and –infrastructure as a service.

It’s part of a strategy to protect the company if corporate buyers cut back spending in favour of SaaS and IaaS offerings.

Dennis Hoffman, senior vice-president of EMC’s global service providers program, said in an interview that so far the company’s enterprise revenues aren’t taking a hit – for more on that see a report below on EMC’s latest quarterly results – but it is preparing.

Two years ago EMC created the service provider program to encourage carriers, outsourcers and hosting providers to buy its solutions. That program has been relatively narrow – only about five SPs are in the program in Canada, including Bell Canada, Telus Corp. CGI, OnX and Ceryx.

But, Hoffman said, EMC’s system integrator partners are increasingly thinking of becoming service providers in the face of possible declining hardware sales as customers turn to the cloud.

So EMC is about to expand the service provider program to include value-added resellers – but with restrictions. To get in a VAR will have to meet strict qualifications on EMC products.

“Unfortunately there are a lot of people who wish to become service provides because they have to,” Hoffman said, “but the likelihood of their success is very low just because it’s a whole different ball game – it’s capital intensive, its service-centric, the margins are very thin – it’s a tough model. And we don’t want to flood the program.”

Ultimately, cloud computing can make IT more efficient and organizations more agile, Hoffman said.

So far, however – at least in Canada, — for enterprises it’s what he calls a workload phenomenon: Deciding which workloads (such as application development or backup) goes in the cloud, and which are core applications that can’t.

That means that CIOs and IT departments are becoming “portfolio managers” choosing which functions are able to go on public clouds, private clouds or stay in-house.

“There’s going to be plenty of apps for all of that,” Hoffman said.” I haven’t talked to a CIO yet [of a large organization] that says 100 per cent of my workload is going to be in the public cloud.”

Earlier in the day EMC reported record consolidated revenue of $5.28 billion (all figures U.S. dollars) from its storage, RSA information security and VCE integrated infrastructure divisions, as well as from its non-controlling interest in VMware.

(VCE, which makes the Vblock server/storage/networking solutions, is a joint effort of EMC, VMware, Intel and Cisco Systems Inc.)

Revenue from the high-end Symmetrix storage line increased 5 per cent over the same period last year, networked storage products grew two per cent while revenue from mid-tier storage products was flat.

Revenue from VMware was up 20 per cent over the same period a year ago (although EMC is entitled to only a portion of VMware’s total revenue and profit).

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